Being a former franchisor, and developing franchised my company for over 10 years before I actually 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 team agreement, people pay most people a certain amount to purchase their franchised outlet, and then they run the business or store to get a 10 year term with automatic renewals.
This is a serious issue, and it happens again 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.
That really doesn’t happen with franchising, and although franchising is an extremely successful business structure for distributing goods, assistance, and products; it isn’t Disneyland. I doubt any online business really is.
Yes, the fact that sounds like a decent business model, nonetheless 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 the place everything went exactly properly; 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 in the franchise agreement, and everything went perfect during the a decade’s they were in business prior to reconstruction.
You see, in the franchise deal there are stipulations before you copy the business to someone else, the fresh 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 per our confidential operations manual, he had made quite a few changes.
Worse, the person wasn’t following the proper procedures which were part of a large fleet account we had with a national company. Again because the guy didn’t have to follow are confidential operations manual, that he never read because as he said; “I never signed nothing. ” Nor did he ever before go to our franchisor training, which is also required in new managers which are sprinting our franchised business model, if ever the owner is not involved in the day-to-day operations.
Let me give you certainly a crazy thing which usually happened to us. There were a franchisee who been around 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 took part in in there were different regulations on each side of the border.
I explained to him that he had to run the business a certain way, and he said that I was wrong, since he didn’t sign any kind of agreement, and he was going to do it his way. Wow great I thought, now I have a rogue franchisee on my hands, plus they are not keeping with the regularity of our brand name.
One day, I happened to fill in for one our area representatives in that vicinity, and I went to visit the franchisee on the Georgia side. When I got there, We were talking to his brother-in-law. Apparently he was today running the business, and some of our franchisee had transferred this company to him without authorization.