Being a former franchisor, and needing franchised my company for over 10 years before I sold it, it seems in my opinion that I’d experienced just about every possible scenario. Most people feel 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 use the business or store for any 10 year term with automatic renewals.
This is a serious issue, and it happens more often than people realize. Franchisors need to demand that the appropriate procedures are followed, also you run into all sorts of instances. Please consider all this and think on.
That really doesn’t happen with franchising, and although franchising is an extremely successful feature for distributing goods, services, and products; it isn’t Disneyland. I doubt any industry really is.
I explained to him which usually he had to run the business a particular way, and he proclaimed that I was wrong, since he didn’t sign any kind of agreement, and he would do it his way. Oh yeah great I thought, right now I have a rogue franchisee on my hands, and they are not keeping with the steadiness of our brand name.
One day, I appeared to fill in for one our area representatives in that vicinity, and I went to go to the franchisee on the Georgia area. When I got there, I was talking to his brother-in-law. Apparently he was nowadays running the business, and our franchisee had transferred this company to him without endorsement.
Worse, the guy wasn’t following the proper techniques which were part of a large fleet account we had with a domestic company. Again because this individual didn’t have to follow are confidential operations manual, which inturn he never read since as he said; “I never signed nothing. ” Nor did he ever go to our franchisor training, which is also required in new managers which are sprinting our franchised business model, if the owner is not involved in the day-to-day operations.
Yes, who sounds like a decent business model, nevertheless 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 endured a perfect franchise sale when everything went exactly properly; where the franchisee qualified designed for the loans very quickly, had a perfect resume, had a perfect location, didn’t care to help you negotiate any terms of the franchise agreement, and all sorts of things went perfect during the decade they were in business prior to renewal.
You see, in the franchise agreement there are stipulations before you transfer the business to someone else, the fresh franchisee has to then signal 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 as per our confidential operations information, he had made quite a few changes.
Let me give you certainly a crazy thing which usually happened to us. There were a franchisee who lived on the border of Ga and Alabama. We allowed them to have a joint location in both states. As a consequence of type of industry we took part in in there were different rules on each side for the border.