To be a former franchisor, and developing franchised my company for over 10 years before I just sold it, it seems to me that I’d experienced just about every possible scenario. Most people think that franchising is really cut and dry; you have a business agreement, people pay you will a certain amount to purchase their franchised outlet, and then they operate the business or store for the 10 year term with automatic renewals.
This is a serious issue, and it happens usually than people realize. Franchisors need to demand that the proper procedures are followed, in any other case you run into all sorts of instances. Please consider all this and think on.
Yes, who sounds like a decent business model, however nothing is ever as basic as it appears in the franchising industry. Let me explain. Over the years, I don’t think I ever had a perfect franchise sale where by everything went exactly appropriately; where the franchisee qualified to get the loans very quickly, experienced a perfect resume, had a superb location, didn’t care to make sure you negotiate any terms of the franchise agreement, and almost everything went perfect during the decade they were in business prior to repair.
Let me give you an example of a crazy thing who happened to us. We’d a franchisee who been around on the border of Georgia and Alabama. We allowed them to have a joint territory in both states. As a consequence of type of industry we was in there were different foibles on each side of the border.
I explained to him the fact that he had to run the business an unusual way, and he proclaimed that I was wrong, because he didn’t sign whatever agreement, and he would do it his way. Wow great I thought, right now I have a rogue franchisee on my hands, and they are not keeping with the consistency of our brand name.
One day, I materialized to fill in for one our area representatives in that region, and I went to go to the franchisee on the Georgia side. When I got there, I actually was talking to his brother-in-law. Apparently he was right now running the business, and our franchisee had transferred the business to him without acceptance.
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 in addition they have to be approved by the franchisor. It turned out the brother-in-law was not running the business per our confidential operations information, he had made quite a few adjustments.
That really doesn’t happen in franchising, and although franchising is an extremely successful business design for distributing goods, solutions, and products; it isn’t Disneyland. I doubt any organization really is.
Worse, the person wasn’t following the proper types of procedures which were part of a large navy account we had with a domestic company. Again because the person didn’t have to follow are confidential operations manual, which he never read considering as he said; “I never signed nothing. inch Nor did he ever before go to our franchisor training, which is also required from new managers which are sprinting our franchised business model, if the owner is not involved in the day-to-day operations.