As a former franchisor, and developing franchised my company meant for over 10 years before We 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 business agreement, people pay you will a certain amount to purchase their franchised outlet, and then they run the business or store for the 10 year term by means of automatic renewals.
Yes, that sounds like a decent business model, then again nothing is ever as basic as it appears in the franchising industry. Let me explain. Through the years, I don’t think I ever endured a perfect franchise sale where everything went exactly correctly; where the franchisee qualified designed for the loans very quickly, previously had a perfect resume, had a perfect location, didn’t care to help you negotiate any terms with the franchise agreement, and all sorts of things went perfect during the 10 years they were in business prior to vitality.
That really doesn’t happen during franchising, and although franchising is an extremely successful business model for distributing goods, offerings, and products; it isn’t Disneyland. I doubt any organization really is.
One day, I happened to fill in for one your area representatives in that section, and I went to go to the franchisee on the Georgia part. When I got there, I actually was talking to his brother-in-law. Apparently he was now running the business, and our franchisee had transferred this company to him without agreement.
Let me give you an example of a crazy thing that 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. Due to the type of industry we participated in there were different regulations on each side with the border.
I explained to him which usually he had to run the business a certain way, and he stated that I was wrong, simply because he didn’t sign any sort 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 maybe they are not keeping with the regularity of our brand name.
You see, in the franchise deal there are stipulations before you copy the business to someone else, the new franchisee has to then signal 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 much like our confidential operations information, he had made quite a few shifts.
This is a serious concern, and it happens more often than people realize. Franchisors need to demand that the proper procedures are followed, in any other case you run into all sorts of scenarios. Please consider all this and think on.
Worse, the person wasn’t following the proper techniques which were part of a large navy account we had with a nationwide company. Again because he didn’t have to follow are actually confidential operations manual, of which he never read simply because as he said; “I never signed nothing. ” Nor did he truly go to our franchisor teaching, 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.