Like a former franchisor, and having franchised my company to get over 10 years before I sold it, it seems to me that I’d experienced concerning possible scenario. Most people think that franchising is really cut and dry; you have a franchise agreement, people pay you a certain amount to purchase their franchised outlet, and then they run the business or store for any 10 year term with automatic renewals.
Let me give you a good example of a crazy thing which usually happened to us. There were a franchisee who resided on the border of Georgia and Alabama. We allowed them to have a joint property in both states. As a consequence of type of industry we was in there were different rules on each side in the border.
That really doesn’t happen during franchising, and although franchising is an extremely successful business design for distributing goods, assistance, and products; it isn’t Disneyland. I doubt any industry really is.
I explained to him the fact that he had to run the business a particular way, and he talked about that I was wrong, since he didn’t sign whatever agreement, and he was going to do it his way. Also great I thought, right now I have a rogue franchisee on my hands, plus they are not keeping with the steadiness of our brand name.
This is a serious issue, and it happens usually than people realize. Franchisors need to demand that the correct 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 visit the franchisee on the Georgia side. When I got there, I was talking to his brother-in-law. Apparently he was nowadays running the business, and your franchisee had transferred the business enterprise to him without endorsement.
Yes, who sounds like a decent business model, then again nothing is ever as basic as it appears in the franchising industry. Let me explain. Progressively, I don’t think I ever had a perfect franchise sale where everything went exactly appropriately; where the franchisee qualified designed for the loans very quickly, previously had a perfect resume, had a wonderful location, didn’t care to negotiate any terms with the franchise agreement, and all sorts of things went perfect during the 10 years they were in business prior to reconstruction.
Worse, the guy wasn’t following the proper procedures which were part of a large fleet account we had with a indigenous company. Again because the guy didn’t have to follow will be confidential operations manual, which he never read simply because as he said; “I never signed nothing. inch Nor did he at any time go to our franchisor teaching, which is also required from new managers which are going our franchised business model, in case the owner is not involved in the day-to-day operations.
You see, in the franchise arrangement there are stipulations before you transfer the business to someone else, the popular franchisee has to then signal the latest franchise agreement, and in addition 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 improvements.