Like a former franchisor, and having franchised my company designed for over 10 years before I sold it, it seems in my opinion that I’d experienced concerning possible scenario. Most people believe franchising is really cut and dry; you have a business agreement, people pay you will a certain amount to purchase their franchised outlet, and then they operate the business or store to get a 10 year term with automatic renewals.
This is a serious concern, and it happens again than people realize. Franchisors need to demand that the correct procedures are followed, in any other case you run into all sorts of scenarios. Please consider all this and think on.
That really doesn’t happen during franchising, and although franchising is an extremely successful business model for distributing goods, solutions, and products; it isn’t Disneyland. I doubt any industry really is.
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 guy didn’t have to follow will be confidential operations manual, of which he never read since as he said; “I never signed nothing. inch Nor did he truly go to our franchisor training, which is also required of new managers which are functioning our franchised business model, in the event the owner is not involved in the day-to-day operations.
I explained to him that he had to run the business an unusual way, and he said that I was wrong, considering he didn’t sign any kind of agreement, and he would definitely do it his way. Wow great I thought, nowadays I have a rogue franchisee on my hands, and they’re not keeping with the steadiness of our brand name.
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 much like our confidential operations manual, he had made quite a few improvements.
One day, I appeared to fill in for one your area representatives in that region, and I went to visit the franchisee on the Georgia area. When I got there, We were talking to his brother-in-law. Apparently he was right now running the business, and some of our franchisee had transferred this company to him without acceptance.
Yes, that sounds like a decent business model, then again nothing is ever as straight forward as it appears in the franchising industry. Let me explain. Progressively, I don’t think I ever endured a perfect franchise sale when everything went exactly appropriately; where the franchisee qualified 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 decade they were in business prior to vitality.
Let me give you an example of a crazy thing that happened to us. There were a franchisee who resided on the border of Atlanta and Alabama. We allowed them to have a joint location in both states. With the type of industry we was in there were different regulations on each side in the border.