To be a former franchisor, and needing franchised my company for over 10 years before We sold it, it seems for me that I’d experienced you can find possible scenario. Most people reckon 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 operate the business or store for any 10 year term by means of automatic renewals.
That really doesn’t happen in 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.
You see, in the franchise binding agreement there are stipulations before you switch the business to someone else, the popular 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 improvements.
One day, I occured to fill in for one of our area representatives in that location, and I went to go to the franchisee on the Georgia aspect. When I got there, We were talking to his brother-in-law. Apparently he was now running the business, and your franchisee had transferred this company to him without agreement.
Let me give you a good example of a crazy thing that happened to us. We’d a franchisee who lived on the border of Georgia and Alabama. We allowed them to have a joint territory in both states. With the type of industry we took part in there were different rules and regulations on each side in the border.
This is a serious concern, 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.
I explained to him who he had to run the business an unusual way, and he proclaimed that I was wrong, since he didn’t sign any kind of agreement, and he was going to 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 consistency of our brand name.
Yes, 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 where by everything went exactly properly; where the franchisee qualified designed for the loans very quickly, possessed a perfect resume, had a wonderful location, didn’t care to make sure you negotiate any terms for the franchise agreement, and everything went perfect during the 10 years they were in business prior to renewal.
Worse, the guy wasn’t following the proper measures which were part of a large navy account we had with a indigenous company. Again because the guy didn’t have to follow are confidential operations manual, that he never read since as he said; “I never signed nothing. inches Nor did he truly go to our franchisor schooling, which is also required of new managers which are sprinting our franchised business model, in the event the owner is not involved in the day-to-day operations.