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As a former franchisor, and developing franchised my company meant for over 10 years before I sold it, it seems for me that I’d experienced you can find possible scenario. Most people reckon that 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 any 10 year term with automatic renewals.
I explained to him who he had to run the business a certain way, and he said that I was wrong, since he didn’t sign any sort of agreement, and he would do it his way. Wow great I thought, nowadays I have a rogue franchisee on my hands, and maybe they are not keeping with the uniformity of our brand name.
Let me give you an example of a crazy thing who happened to us. We a franchisee who been around on the border of Ga and Alabama. We allowed them to have a joint property in both states. As a consequence of type of industry we was in there were different foibles on each side in the border.
This is a serious issue, and it happens more often than people realize. Franchisors need to demand that the correct procedures are followed, also you run into all sorts of situations. Please consider all this and think on.
Yes, the fact that sounds like a decent business model, however nothing is ever as straight forward as it appears in the franchising industry. Let me explain. Over the years, I don’t think I ever had a perfect franchise sale when everything went exactly perfectly; where the franchisee qualified designed for the loans very quickly, possessed a perfect resume, had a perfect location, didn’t care to make sure you negotiate any terms for the franchise agreement, and all sorts of things went perfect during the several years they were in business prior to reconstruction.
That really doesn’t happen during franchising, and although franchising is an extremely successful business model for distributing goods, offerings, and products; it isn’t Disneyland. I doubt any industry really is.
You see, in the franchise deal there are stipulations before you switch the business to someone else, the new franchisee has to then sign 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 information, he had made quite a few adjustments.
Worse, this individual wasn’t following the proper measures which were part of a large fast account we had with a national company. Again because the person didn’t have to follow are actually confidential operations manual, of which he never read since as he said; „I never signed nothing. “ Nor did he ever go to our franchisor training, 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 materialized to fill in for one of our area representatives in that vicinity, 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 today running the business, and your franchisee had transferred the market to him without authorization.