Being a former franchisor, and having franchised my company to get over 10 years before I actually sold it, it seems opinion that I’d experienced concerning possible scenario. Most people feel 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 any 10 year term by means of automatic renewals.
Let me give you an illustration of this a crazy thing the fact that happened to us. There were a franchisee who enjoyed on the border of Atlanta and Alabama. We allowed them to have a joint sales area in both states. With the type of industry we participated in there were different regulations on each side of the border.
Worse, the person wasn’t following the proper procedures which were part of a large fleet account we had with a domestic company. Again because he didn’t have to follow happen to be confidential operations manual, of which he never read since as he said; “I never signed nothing. inch Nor did he ever before go to our franchisor workout, which is also required in new managers which are going our franchised business model, in case the owner is not involved in the day-to-day operations.
One day, I materialized to fill in for one your area representatives in that section, and I went to go to the franchisee on the Georgia area. When I got there, We were talking to his brother-in-law. Apparently he was nowadays running the business, and this franchisee had transferred this company to him without agreement.
This is a serious issue, and it happens usually than people realize. Franchisors need to demand that the proper procedures are followed, in any other case you run into all sorts of instances. Please consider all this and think on.
You see, in the franchise agreement there are stipulations before you copy the business to someone else, the popular franchisee has to then hint 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 instructions, he had made quite a few adjustments.
I explained to him which usually he had to run the business an unusual way, and he said that I was wrong, simply because he didn’t sign any kind of agreement, and he was going to do it his way. Also great I thought, today I have a rogue franchisee on my hands, plus they are not keeping with the steadiness of our brand name.
That really doesn’t happen with franchising, and although franchising is an extremely successful business design for distributing goods, solutions, and products; it isn’t Disneyland. I doubt any organization really is.
Yes, which usually sounds like a decent business model, nonetheless nothing is ever as simple as it appears in the franchising industry. Let me explain. Over the years, I don’t think I ever endured a perfect franchise sale where everything went exactly perfectly; where the franchisee qualified to get the loans very quickly, previously had a perfect resume, had a superb location, didn’t care to help you negotiate any terms of the franchise agreement, and all sorts of things went perfect during the a decade’s they were in business prior to reconstruction.