As a former franchisor, and needing franchised my company designed for over 10 years before I actually sold it, it seems for me that I’d experienced concerning possible scenario. Most people reckon that franchising is really cut and dry; you have a operation 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 the 10 year term with automatic renewals.
You see, in the franchise binding agreement there are stipulations before you switch the business to someone else, the new franchisee has to then sign 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 as per our confidential operations instructions, he had made quite a few adjustments.
Let me give you a good example of a crazy thing the fact that happened to us. We had a franchisee who resided on the border of Atlanta and Alabama. We allowed them to have a joint territory in both states. Due to the type of industry we was in there were different regulations on each side in the border.
One day, I materialized to fill in for one our area representatives in that section, 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 nowadays running the business, and your franchisee had transferred this company to him without acceptance.
I explained to him that he had to run the business a certain way, and he said that I was wrong, because he didn’t sign any 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 regularity of our brand name.
This is a serious concern, and it happens on a regular basis than people realize. Franchisors need to demand that the the right procedures are followed, otherwise you run into all sorts of scenarios. Please consider all this and think on.
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 the person didn’t have to follow are confidential operations manual, which inturn he never read since as he said; “I never signed nothing. ” Nor did he at any time go to our franchisor teaching, which is also required in new managers which are going our franchised business model, if the owner is not involved in the day-to-day operations.
That really doesn’t happen for franchising, and although franchising is an extremely successful feature for distributing goods, offerings, and products; it isn’t Disneyland. I doubt any online business really is.
Yes, that sounds like a decent business model, then again nothing is ever as straightforward 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 perfectly; where the franchisee qualified to get the loans very quickly, had a perfect resume, had an appropriate location, didn’t care to make sure you negotiate any terms of the franchise agreement, and all sorts of things went perfect during the 10 years they were in business prior to vitality.
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