Like a former franchisor, and developing franchised my company designed for over 10 years before I sold it, it seems to me that I’d experienced concerning possible scenario. Most people think that franchising is really cut and dry; you have a team agreement, people pay you will a certain amount to purchase their franchised outlet, and then they get the job done the business or store to get a 10 year term by means of automatic renewals.
I explained to him who he had to run the business a clear way, and he proclaimed that I was wrong, simply because he didn’t sign whatever agreement, and he was going to do it his way. Wow great I thought, right now I have a rogue franchisee on my hands, and they’re not keeping with the uniformity of our brand name.
Let me give you a good example of a crazy thing the fact that happened to us. We’d a franchisee who been around on the border of Atlanta and Alabama. We allowed them to have a joint location in both states. Due to the type of industry we took part in there were different rules on each side in the border.
Worse, the guy wasn’t following the proper types of procedures which were part of a large fast account we had with a indigenous company. Again because this individual didn’t have to follow are confidential operations manual, which inturn he never read because as he said; “I never signed nothing. ” Nor did he at any time go to our franchisor workout, which is also required of new managers which are functioning our franchised business model, if ever the owner is not involved in the day-to-day operations.
That really doesn’t happen with franchising, and although franchising is an extremely successful business structure for distributing goods, offerings, and products; it isn’t Disneyland. I doubt any industry really is.
One day, I materialized to fill in for one your area representatives in that section, and I went to visit the franchisee on the Georgia aspect. When I got there, I was talking to his brother-in-law. Apparently he was today running the business, and your franchisee had transferred the business enterprise to him without authorization.
Yes, the fact that sounds like a decent business model, however nothing is ever as straightforward as it appears in the franchising industry. Let me explain. Progressively, I don’t think I ever had a perfect franchise sale where everything went exactly correctly; where the franchisee qualified designed for the loans very quickly, had a perfect resume, had an appropriate location, didn’t care to negotiate any terms with the franchise agreement, and all sorts of things went perfect during the decade they were in business prior to reconstruction.
You see, in the franchise binding agreement there are stipulations before you transfer the business to someone else, the new franchisee has to then hint the latest franchise agreement, and they have to be approved by the franchisor. It turned out the brother-in-law was not running the business down to our confidential operations information, he had made quite a few shifts.
This is a serious concern, and it happens more often than people realize. Franchisors need to demand that the correct procedures are followed, usually you run into all sorts of situations. Please consider all this and think on.