To be a former franchisor, and developing franchised my company to get over 10 years before I 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 business agreement, people pay you a certain amount to purchase their franchised outlet, and then they get the job done the business or store to get a 10 year term with automatic renewals.
I explained to him that he had to run the business a certain way, and he proclaimed that I was wrong, because he didn’t sign whatever agreement, and he would do it his way. Wow great I thought, nowadays I have a rogue franchisee on my hands, and they are not keeping with the steadiness of our brand name.
Yes, that sounds like a decent business model, however nothing is ever as basic as it appears in the franchising industry. Let me explain. Over time, I don’t think I ever had a perfect franchise sale when everything went exactly correctly; where the franchisee qualified meant for the loans very quickly, experienced a perfect resume, had a wonderful location, didn’t care to negotiate any terms for the franchise agreement, and every thing went perfect during the 10 years they were in business prior to vitality.
Worse, the person wasn’t following the proper types of procedures which were part of a large navy account we had with a indigenous company. Again because the person didn’t have to follow are confidential operations manual, which inturn he never read considering as he said; «I never signed nothing. inches Nor did he truly go to our franchisor teaching, which is also required from new managers which are functioning our franchised business model, in the event the owner is not involved in the day-to-day operations.
You see, in the franchise arrangement there are stipulations before you switch the business to someone else, the brand new 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 manual, he had made quite a few improvements.
That really doesn’t happen for franchising, and although franchising is an extremely successful feature for distributing goods, services, and products; it isn’t Disneyland. I doubt any industry really is.
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 aspect. When I got there, I just was talking to his brother-in-law. Apparently he was nowadays running the business, and our franchisee had transferred this company to him without endorsement.
Let me give you an illustration of this a crazy thing the fact that happened to us. We a franchisee who lived on the border of Georgia and Alabama. We allowed them to have a joint location in both states. As a result of type of industry we took part in there were different regulations on each side with the border.
This is a serious issue, and it happens on a regular basis than people realize. Franchisors need to demand that the proper procedures are followed, otherwise you run into all sorts of circumstances. Please consider all this and think on.