To be a former franchisor, and needing franchised my company to get over 10 years before We sold it, it seems in my opinion that I’d experienced concerning possible scenario. Most people reckon 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 run the business or store for a 10 year term by means of automatic renewals.
Yes, the fact that sounds like a decent business model, nonetheless nothing is ever as basic as it appears in the franchising industry. Let me explain. Progressively, I don’t think I ever endured a perfect franchise sale the place everything went exactly correctly; where the franchisee qualified for the loans very quickly, experienced a perfect resume, had an appropriate location, didn’t care to help you negotiate any terms in the franchise agreement, and everything went perfect during the 10 years they were in business prior to repair.
I explained to him that he had to run the business a particular way, and he stated that I was wrong, simply because he didn’t sign whatever agreement, and he was going to do it his way. Oh great I thought, nowadays I have a rogue franchisee on my hands, and they are not keeping with the uniformity of our brand name.
Worse, he wasn’t following the proper measures which were part of a large fleet account we had with a indigenous company. Again because the person didn’t have to follow are confidential operations manual, of which he never read considering as he said; “I never signed nothing. ” Nor did he ever go to our franchisor schooling, which is also required in new managers which are going our franchised business model, in the event the owner is not involved in the day-to-day operations.
Let me give you an illustration of this a crazy thing which usually happened to us. We’d a franchisee who enjoyed on the border of Georgia and Alabama. We allowed them to have a joint property in both states. As a result of type of industry we took part in in there were different foibles on each side in the border.
You see, in the franchise arrangement there are stipulations before you transfer the business to someone else, the fresh franchisee has to then signal the latest franchise agreement, and have to be approved by the franchisor. It turned out the brother-in-law was not running the business per our confidential operations manual, he had made quite a few shifts.
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 situations. Please consider all this and think on.
One day, I appeared to fill in for one of our area representatives in that location, and I went to visit the franchisee on the Georgia area. When I got there, I just was talking to his brother-in-law. Apparently he was today running the business, and our franchisee had transferred this company to him without endorsement.
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 organization really is.