Being a former franchisor, and needing franchised my company designed for over 10 years before I actually 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 operation agreement, people pay you a certain amount to purchase their franchised outlet, and then they use the business or store for the 10 year term with automatic renewals.
That really doesn’t happen in franchising, and although franchising is an extremely successful business model for distributing goods, solutions, and products; it isn’t Disneyland. I doubt any business really is.
You see, in the franchise agreement there are stipulations before you transfer the business to someone else, the brand new 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 much like our confidential operations manual, he had made quite a few improvements.
Yes, that sounds like a decent business model, then again nothing is ever as straightforward as it appears in the franchising industry. Let me explain. Over time, I don’t think I ever had a perfect franchise sale where by everything went exactly correctly; where the franchisee qualified for the loans very quickly, experienced a perfect resume, had a superb location, didn’t care to make sure you negotiate any terms for the franchise agreement, and all sorts of things went perfect during the decade they were in business prior to repair.
This is a serious issue, and it happens usually than people realize. Franchisors need to demand that the the right procedures are followed, in any other case you run into all sorts of instances. Please consider all this and think on.
Let me give you certainly a crazy thing who happened to us. We a franchisee who enjoyed on the border of Atlanta and Alabama. We allowed them to have a joint location in both states. Due to the type of industry we was in there were different regulations on each side with the border.
Worse, this individual wasn’t following the proper techniques which were part of a large fast account we had with a domestic company. Again because he didn’t have to follow are confidential operations manual, which inturn he never read simply because as he said; “I never signed nothing. inches Nor did he ever go to our franchisor teaching, which is also required in new managers which are going our franchised business model, if the owner is not involved in the day-to-day operations.
One day, I appeared to fill in for one your area representatives in that vicinity, and I went to visit the franchisee on the Georgia area. When I got there, I actually was talking to his brother-in-law. Apparently he was right now running the business, and our franchisee had transferred the business enterprise to him without agreement.
I explained to him who he had to run the business a certain way, and he said that I was wrong, considering he didn’t sign whatever agreement, and he was going to do it his way. Oh great I thought, right now I have a rogue franchisee on my hands, and maybe they are not keeping with the regularity of our brand name.