Being a former franchisor, and having franchised my company for over 10 years before We sold it, it seems opinion that I’d experienced you can find possible scenario. Most people believe franchising is really cut and dry; you have a franchise 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.
One day, I happened to fill in for one of our area representatives in that vicinity, and I went to visit the franchisee on the Georgia aspect. When I got there, I actually was talking to his brother-in-law. Apparently he was right now running the business, and this franchisee had transferred the market to him without acceptance.
You see, in the franchise binding agreement there are stipulations before you copy the business to someone else, the new franchisee has to then hint the latest franchise agreement, and have to be approved by the franchisor. It turned out the brother-in-law was not running the business down to our confidential operations instructions, he had made quite a few shifts.
This is a serious issue, and it happens more often than people realize. Franchisors need to demand that the proper procedures are followed, also you run into all sorts of situations. Please consider all this and think on.
Yes, which usually sounds like a decent business model, nevertheless nothing is ever as simple as it appears in the franchising industry. Let me explain. Progressively, I don’t think I ever had a perfect franchise sale when everything went exactly properly; where the franchisee qualified for the loans very quickly, possessed a perfect resume, had a superb location, didn’t care to make sure you negotiate any terms with the franchise agreement, and all sorts of things went perfect during the decade they were in business prior to renewal.
Let me give you an example of a crazy thing the fact that happened to us. There were a franchisee who enjoyed on the border of Georgia and Alabama. We allowed them to have a joint property in both states. As a result of type of industry we participated in there were different rules on each side with the border.
Worse, the guy wasn’t following the proper types of procedures which were part of a large fast account we had with a nationwide company. Again because he didn’t have to follow are actually confidential operations manual, of which he never read because as he said; “I never signed nothing. inch Nor did he truly go to our franchisor schooling, which is also required in new managers which are running our franchised business model, if the owner is not involved in the day-to-day operations.
That really doesn’t happen with franchising, and although franchising is an extremely successful business structure for distributing goods, offerings, and products; it isn’t Disneyland. I doubt any business really is.
I explained to him the fact that he had to run the business a certain way, and he said that I was wrong, since he didn’t sign whatever agreement, and he would definitely do it his way. Wow great I thought, today I have a rogue franchisee on my hands, and they are not keeping with the regularity of our brand name.