Being a former franchisor, and needing franchised my company designed for over 10 years before I actually sold it, it seems for me that I’d experienced just about every possible scenario. Most people feel that franchising is really cut and dry; you have a business agreement, people pay you a certain amount to purchase their franchised outlet, and then they get the job done the business or store for a 10 year term by means of automatic renewals.
Worse, the guy wasn’t following the proper measures which were part of a large fleet account we had with a domestic company. Again because the guy didn’t have to follow are actually confidential operations manual, which he never read simply because as he said; “I never signed nothing. ” Nor did he ever before go to our franchisor workout, which is also required of new managers which are going our franchised business model, if ever the owner is not involved in the day-to-day operations.
You see, in the franchise arrangement there are stipulations before you copy the business to someone else, the new franchisee has to then sign 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 as per our confidential operations guidebook, he had made quite a few improvements.
This is a serious concern, and it happens usually than people realize. Franchisors need to demand that the correct procedures are followed, usually you run into all sorts of instances. Please consider all this and think on.
I explained to him the fact that he had to run the business a certain way, and he stated that I was wrong, considering he didn’t sign any agreement, and he would do it his way. Oh yeah great I thought, right now I have a rogue franchisee on my hands, and maybe they are not keeping with the consistency of our brand name.
Let me give you an example of a crazy thing which usually happened to us. We a franchisee who lived on the border of Atlanta and Alabama. We allowed them to have a joint property in both states. With the type of industry we participated in there were different rules on each side with the border.
One day, I happened to fill in for one of our area representatives in that vicinity, and I went to go to the franchisee on the Georgia side. When I got there, I was talking to his brother-in-law. Apparently he was right now running the business, and your franchisee had transferred this company to him without authorization.
Yes, the fact that sounds like a decent business model, nonetheless nothing is ever as basic as it appears in the franchising industry. Let me explain. Progressively, I don’t think I ever had a perfect franchise sale where by everything went exactly perfectly; where the franchisee qualified to get the loans very quickly, previously had a perfect resume, had a superb location, didn’t care to make sure you negotiate any terms of the franchise agreement, and every thing went perfect during the 10 years they were in business prior to renewal.
That really doesn’t happen for franchising, and although franchising is an extremely successful feature for distributing goods, offerings, and products; it isn’t Disneyland. I doubt any business really is.