Being a former franchisor, and having franchised my company designed for over 10 years before I actually sold it, it seems in my opinion that I’d experienced you can find possible scenario. Most people believe 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 run the business or store for a 10 year term with automatic renewals.
Let me give you an illustration of this a crazy thing the fact that happened to us. We’d a franchisee who resided on the border of Georgia and Alabama. We allowed them to have a joint sales area in both states. As a consequence of type of industry we participated in there were different rules on each side in the border.
You see, in the franchise agreement there are stipulations before you copy the business to someone else, the fresh franchisee has to then sign the latest franchise agreement, plus 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 guidebook, 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 appropriate procedures are followed, otherwise you run into all sorts of circumstances. Please consider all this and think on.
One day, I happened to fill in for one of the area representatives in that region, and I went to go to the franchisee on the Georgia side. When I got there, I just was talking to his brother-in-law. Apparently he was right now running the business, and your franchisee had transferred the business enterprise to him without authorization.
That really doesn’t happen for franchising, and although franchising is an extremely successful business structure for distributing goods, assistance, and products; it isn’t Disneyland. I doubt any online business really is.
I explained to him which usually he had to run the business a clear way, and he talked about that I was wrong, simply because he didn’t sign any sort of agreement, and he was going to do it his way. Oh great I thought, now I have a rogue franchisee on my hands, and maybe they are not keeping with the regularity of our brand name.
Worse, the person wasn’t following the proper measures which were part of a large fast account we had with a national company. Again because this individual didn’t have to follow are confidential operations manual, that he never read since as he said; “I never signed nothing. ” Nor did he ever before go to our franchisor training, which is also required of new managers which are functioning our franchised business model, in case the owner is not involved in the day-to-day operations.
Yes, which usually sounds like a decent business model, then again nothing is ever as simple as it appears in the franchising industry. Let me explain. Over time, I don’t think I ever endured a perfect franchise sale when everything went exactly correctly; where the franchisee qualified designed for the loans very quickly, experienced a perfect resume, had a superb location, didn’t care to help you negotiate any terms for the franchise agreement, and almost everything went perfect during the 10 years they were in business prior to reconstruction.