Like a former franchisor, and developing franchised my company designed for over 10 years before I just sold it, it seems opinion that I’d experienced concerning possible scenario. Most people believe 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 run the business or store to get a 10 year term by means of automatic renewals.
One day, I appeared to fill in for one our area representatives in that location, 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 now running the business, and our franchisee had transferred the market to him without acceptance.
You see, in the franchise deal there are stipulations before you switch the business to someone else, the fresh franchisee has to then sign the latest franchise agreement, plus they have to be approved by the franchisor. It turned out the brother-in-law was not running the business much like our confidential operations instructions, he had made quite a few adjustments.
Worse, the guy wasn’t following the proper techniques which were part of a large navy account we had with a nationwide company. Again because he didn’t have to follow are actually confidential operations manual, that he never read because as he said; « I never signed nothing. inch Nor did he ever go to our franchisor training, which is also required in new managers which are running our franchised business model, if ever the owner is not involved in the day-to-day operations.
I explained to him that he had to run the business an unusual way, and he said that I was wrong, because he didn’t sign any kind of agreement, and he would definitely do it his way. Oh great I thought, nowadays I have a rogue franchisee on my hands, plus they are not keeping with the consistency of our brand name.
That really doesn’t happen with franchising, and although franchising is an extremely successful feature for distributing goods, solutions, and products; it isn’t Disneyland. I doubt any business really is.
Let me give you certainly a crazy thing who happened to us. There were a franchisee who been around on the border of Ga and Alabama. We allowed them to have a joint sales area in both states. With the type of industry we participated in there were different rules and regulations on each side with the border.
This is a serious issue, and it happens usually than people realize. Franchisors need to demand that the appropriate procedures are followed, usually you run into all sorts of circumstances. Please consider all this and think on.
Yes, that sounds like a decent business model, however nothing is ever as straight forward 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 correctly; where the franchisee qualified for the loans very quickly, possessed a perfect resume, had a superb location, didn’t care to make sure you negotiate any terms for the franchise agreement, and almost everything went perfect during the a decade’s they were in business prior to renewal.