Being a former franchisor, and having franchised my company meant for over 10 years before I sold it, it seems for me that I’d experienced in relation to possible scenario. Most people feel that franchising is really cut and dry; you have a team agreement, people pay you a certain amount to purchase their franchised outlet, and then they operate the business or store to get a 10 year term by means of automatic renewals.
Let me give you certainly a crazy thing that happened to us. There were a franchisee who resided on the border of Ga and Alabama. We allowed them to have a joint territory in both states. Due to the type of industry we took part in in there were different rules on each side for the border.
I explained to him which usually he had to run the business a clear way, and he said that I was wrong, simply because he didn’t sign any sort of agreement, and he would definitely 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 uniformity of our brand name.
That really doesn’t happen for franchising, and although franchising is an extremely successful business structure for distributing goods, offerings, and products; it isn’t Disneyland. I doubt any business really is.
You see, in the franchise deal there are stipulations before you switch 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 shifts.
This is a serious concern, and it happens usually 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, this individual wasn’t following the proper procedures which were part of a large fast account we had with a national company. Again because the person didn’t have to follow are confidential operations manual, which he never read since as he said; “I never signed nothing. inch Nor did he ever before go to our franchisor schooling, which is also required from new managers which are sprinting our franchised business model, in case the owner is not involved in the day-to-day operations.
One day, I happened to fill in for one of our area representatives in that region, and I went to visit the franchisee on the Georgia part. When I got there, We were talking to his brother-in-law. Apparently he was nowadays running the business, and your franchisee had transferred the business enterprise to him without authorization.
Yes, which usually sounds like a decent business model, however nothing is ever as simple as it appears in the franchising industry. Let me explain. Over time, I don’t think I ever had a perfect franchise sale the place everything went exactly properly; where the franchisee qualified to get the loans very quickly, possessed a perfect resume, had an appropriate location, didn’t care to make sure you negotiate any terms for the franchise agreement, and all sorts of things went perfect during the a decade’s they were in business prior to reconstruction.