As a former franchisor, and developing franchised my company designed for over 10 years before I actually sold it, it seems opinion that I’d experienced concerning possible scenario. Most people think that franchising is really cut and dry; you have a franchise agreement, people pay most people a certain amount to purchase their franchised outlet, and then they get the job done the business or store for the 10 year term with automatic renewals.
You see, in the franchise agreement there are stipulations before you copy the business to someone else, the fresh franchisee has to then sign the latest franchise agreement, and they have to be approved by the franchisor. It turned out the brother-in-law was not running the business down to our confidential operations information, he had made quite a few shifts.
One day, I happened to fill in for one your 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 market to him without agreement.
That really doesn’t happen with franchising, and although franchising is an extremely successful feature for distributing goods, assistance, and products; it isn’t Disneyland. I doubt any industry really is.
I explained to him the fact that he had to run the business a certain way, and he talked about that I was wrong, because he didn’t sign any sort of agreement, and he would do it his way. Oh great I thought, today I have a rogue franchisee on my hands, and they are not keeping with the consistency of our brand name.
Let me give you an example of a crazy thing which usually happened to us. We’d a franchisee who enjoyed on the border of Atlanta and Alabama. We allowed them to have a joint sales area in both states. Due to the type of industry we participated in there were different regulations on each side in the border.
Yes, the fact that sounds like a decent business model, then again nothing is ever as simple as it appears in the franchising industry. Let me explain. Over time, I don’t think I ever endured a perfect franchise sale where everything went exactly properly; where the franchisee qualified for the loans very quickly, possessed a perfect resume, had a perfect location, didn’t care to help you negotiate any terms of the franchise agreement, and everything went perfect during the decade they were in business prior to vitality.
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 scenarios. Please consider all this and think on.
Worse, the person wasn’t following the proper procedures which were part of a large fast account we had with a nationwide company. Again because he didn’t have to follow happen to be confidential operations manual, that he never read since as he said; “I never signed nothing. ” Nor did he at any time go to our franchisor teaching, which is also required from new managers which are running our franchised business model, in case the owner is not involved in the day-to-day operations.