As a former franchisor, and needing franchised my company meant for 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 franchise agreement, people pay most people a certain amount to purchase their franchised outlet, and then they use the business or store to get a 10 year term with automatic renewals.
One day, I appeared to fill in for one your area representatives in that region, and I went to go to the franchisee on the Georgia area. When I got there, I 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 agreement.
I explained to him which usually he had to run the business an unusual way, and he stated that I was wrong, because he didn’t sign any sort of agreement, and he was going to do it his way. Wow great I thought, now I have a rogue franchisee on my hands, and they’re not keeping with the consistency of our brand name.
Worse, he wasn’t following the proper procedures which were part of a large fleet account we had with a national company. Again because the person didn’t have to follow happen to be confidential operations manual, which he never read because as he said; “I never signed nothing. inch Nor did he ever before go to our franchisor workout, which is also required from new managers which are going our franchised business model, if ever the owner is not involved in the day-to-day operations.
Yes, the fact that sounds like a decent business model, nevertheless nothing is ever as straightforward 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 appropriately; where the franchisee qualified designed for the loans very quickly, possessed a perfect resume, had an appropriate location, didn’t care to help you negotiate any terms of the franchise agreement, and almost everything went perfect during the several years they were in business prior to reconstruction.
You see, in the franchise deal there are stipulations before you transfer the business to someone else, the fresh franchisee has to then indicator 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 per our confidential operations instructions, he had made quite a few changes.
This is a serious issue, and it happens again than people realize. Franchisors need to demand that the proper procedures are followed, also you run into all sorts of circumstances. Please consider all this and think on.
That really doesn’t happen with franchising, and although franchising is an extremely successful business structure for distributing goods, services, and products; it isn’t Disneyland. I doubt any business really is.
Let me give you an example of a crazy thing who happened to us. We had a franchisee who lived on the border of Atlanta and Alabama. We allowed them to have a joint sales area in both states. As a consequence of type of industry we took part in in there were different regulations on each side of the border.
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