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Like a former franchisor, and developing franchised my company 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 franchise agreement, people pay most people a certain amount to purchase their franchised outlet, and then they run the business or store to get a 10 year term with automatic renewals.
Let me give you an example of a crazy thing that happened to us. There were a franchisee who been around on the border of Georgia and Alabama. We allowed them to have a joint location in both states. Due to the type of industry we was in there were different foibles on each side for the border.
One day, I materialized to fill in for one of our area representatives in that location, 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 some of our franchisee had transferred the business enterprise to him without authorization.
You see, in the franchise binding agreement there are stipulations before you transfer the business to someone else, the brand new franchisee has to then indicator 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 adjustments.
This is a serious concern, and it happens again than people realize. Franchisors need to demand that the proper procedures are followed, also you run into all sorts of scenarios. Please consider all this and think on.
Worse, he wasn’t following the proper measures which were part of a large fleet account we had with a nationwide company. Again because he didn’t have to follow happen to be confidential operations manual, which he never read simply because as he said; “I never signed nothing. inch Nor did he truly go to our franchisor teaching, which is also required of new managers which are going our franchised business model, if ever the owner is not involved in the day-to-day operations.
Yes, the fact that sounds like a decent business model, then again nothing is ever as straightforward as it appears in the franchising industry. Let me explain. Through the years, I don’t think I ever had a perfect franchise sale where everything went exactly appropriately; where the franchisee qualified meant for the loans very quickly, experienced a perfect resume, had a perfect location, didn’t care to negotiate any terms with the franchise agreement, and every thing went perfect during the 10 years they were in business prior to renewal.
I explained to him who he had to run the business a clear way, and he said that I was wrong, considering he didn’t sign any agreement, and he would definitely do it his way. Oh great I thought, right now I have a rogue franchisee on my hands, and maybe they are not keeping with the steadiness of our brand name.
That really doesn’t happen for franchising, and although franchising is an extremely successful business model for distributing goods, solutions, and products; it isn’t Disneyland. I doubt any organization really is.
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