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Like a former franchisor, and having franchised my company to get over 10 years before I sold it, it seems to me that I’d experienced you can find possible scenario. Most people feel that franchising is really cut and dry; you have a team agreement, people pay you will a certain amount to purchase their franchised outlet, and then they use the business or store for a 10 year term by means of automatic renewals.
Worse, this individual wasn’t following the proper types of procedures which were part of a large fleet account we had with a nationwide company. Again because the guy didn’t have to follow happen to be confidential operations manual, which he never read considering as he said; “I never signed nothing. ” Nor did he ever before go to our franchisor teaching, which is also required of new managers which are going our franchised business model, if the owner is not involved in the day-to-day operations.
That really doesn’t happen for franchising, and although franchising is an extremely successful business model for distributing goods, services, and products; it isn’t Disneyland. I doubt any industry really is.
Let me give you certainly a crazy thing who happened to us. We had a franchisee who enjoyed on the border of Ga and Alabama. We allowed them to have a joint location in both states. With the type of industry we participated in there were different rules on each side in the border.
One day, I appeared to fill in for one our area representatives in that region, and I went to go to the franchisee on the Georgia part. When I got there, We were talking to his brother-in-law. Apparently he was now running the business, and this franchisee had transferred the market to him without authorization.
Yes, who sounds like a decent business model, nevertheless nothing is ever as simple as it appears in the franchising industry. Let me explain. Progressively, I don’t think I ever endured a perfect franchise sale where everything went exactly correctly; where the franchisee qualified meant for the loans very quickly, possessed a perfect resume, had a perfect location, didn’t care to negotiate any terms in the franchise agreement, and every thing went perfect during the 10 years they were in business prior to vitality.
You see, in the franchise agreement there are stipulations before you switch the business to someone else, the 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 much like our confidential operations manual, he had made quite a few adjustments.
I explained to him who he had to run the business a clear way, and he proclaimed that I was wrong, because he didn’t sign any kind of agreement, and he would do it his way. Wow great I thought, right now I have a rogue franchisee on my hands, and they’re not keeping with the uniformity of our brand name.
This is a serious issue, and it happens on a regular basis than people realize. Franchisors need to demand that the the right procedures are followed, also you run into all sorts of instances. Please consider all this and think on.