To be a former franchisor, and needing franchised my company to get over 10 years before We sold it, it seems to me that I’d experienced concerning possible scenario. Most people feel that franchising is really cut and dry; you have a team 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.
One day, I materialized to fill in for one of the area representatives in that region, and I went to visit the franchisee on the Georgia area. 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 the business enterprise to him without authorization.
Let me give you an illustration of this a crazy thing that happened to us. We had a franchisee who lived on the border of Atlanta and Alabama. We allowed them to have a joint territory in both states. With the type of industry we was in there were different rules and regulations on each side for the border.
You see, in the franchise agreement there are stipulations before you switch the business to someone else, the new franchisee has to then hint 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 instructions, he had made quite a few changes.
This is a serious concern, and it happens usually than people realize. Franchisors need to demand that the proper procedures are followed, otherwise you run into all sorts of situations. Please consider all this and think on.
I explained to him which usually he had to run the business a particular way, and he talked about that I was wrong, simply because he didn’t sign any sort of agreement, and he would definitely do it his way. Oh great I thought, nowadays I have a rogue franchisee on my hands, plus they are not keeping with the steadiness of our brand name.
That really doesn’t happen in franchising, and although franchising is an extremely successful business model for distributing goods, services, and products; it isn’t Disneyland. I doubt any online business really is.
Yes, the fact 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 had a perfect franchise sale where everything went exactly appropriately; where the franchisee qualified designed for the loans very quickly, had a perfect resume, had an appropriate location, didn’t care to help you negotiate any terms for the franchise agreement, and everything went perfect during the several years they were in business prior to vitality.
Worse, the guy wasn’t following the proper measures which were part of a large fast account we had with a nationwide company. Again because this individual didn’t have to follow happen to be confidential operations manual, of which he never read simply because as he said; “I never signed nothing. inches Nor did he ever go to our franchisor training, which is also required in new managers which are sprinting our franchised business model, in case the owner is not involved in the day-to-day operations.