Being a former franchisor, and needing franchised my company for over 10 years before I sold it, it seems to me that I’d experienced in relation to possible scenario. Most people reckon that franchising is really cut and dry; you have a business agreement, people pay most people a certain amount to purchase their franchised outlet, and then they run the business or store for any 10 year term with automatic renewals.
You see, in the franchise binding agreement there are stipulations before you transfer the business to someone else, the fresh franchisee has to then sign 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 down to our confidential operations guidebook, he had made quite a few adjustments.
I explained to him that he had to run the business a particular way, and he stated that I was wrong, considering he didn’t sign any kind 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 uniformity of our brand name.
Worse, this individual wasn’t following the proper procedures which were part of a large fast account we had with a nationwide company. Again because he didn’t have to follow are confidential operations manual, of which he never read simply because as he said; “I never signed nothing. ” Nor did he at any time go to our franchisor teaching, which is also required from new managers which are running our franchised business model, in case the owner is not involved in the day-to-day operations.
That really doesn’t happen in franchising, and although franchising is an extremely successful business design for distributing goods, offerings, and products; it isn’t Disneyland. I doubt any business really is.
One day, I appeared to fill in for one of our area representatives in that region, and I went to go to the franchisee on the Georgia side. When I got there, We were talking to his brother-in-law. Apparently he was today running the business, and this franchisee had transferred this company to him without agreement.
Let me give you certainly a crazy thing that happened to us. We a franchisee who been around on the border of Georgia and Alabama. We allowed them to have a joint property in both states. Due to the type of industry we took part in there were different rules and regulations on each side with the border.
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, usually you run into all sorts of circumstances. Please consider all this and think on.
Yes, that sounds like a decent business model, however nothing is ever as simple as it appears in the franchising industry. Let me explain. Over the years, I don’t think I ever endured a perfect franchise sale where by everything went exactly correctly; where the franchisee qualified meant for the loans very quickly, possessed a perfect resume, had a wonderful location, didn’t care to negotiate any terms for the franchise agreement, and almost everything went perfect during the 10 years they were in business prior to repair.