To be a former franchisor, and having franchised my company for over 10 years before I just sold it, it seems for me that I'd experienced you can find possible scenario. Most people think that franchising is really cut and dry; you have a business agreement, people pay you will a certain amount to purchase their franchised outlet, and then they use the business or store for any 10 year term with automatic renewals.
One day, I happened to fill in for one your area representatives in that section, and I went to visit the franchisee on the Georgia part. When I got there, I just was talking to his brother-in-law. Apparently he was nowadays running the business, and our franchisee had transferred the business enterprise to him without acceptance.
Yes, which usually sounds like a decent business model, however nothing is ever as straightforward as it appears in the franchising industry. Let me explain. Progressively, I don't think I ever endured a perfect franchise sale the place everything went exactly appropriately; where the franchisee qualified for the loans very quickly, possessed a perfect resume, had a wonderful location, didn't care to help you negotiate any terms with the franchise agreement, and everything went perfect during the 10 years they were in business prior to repair.
You see, in the franchise agreement there are stipulations before you switch the business to someone else, the new franchisee has to then sign the latest franchise agreement, plus they have to be approved by the franchisor. It turned out the brother-in-law was not running the business down to our confidential operations manual, he had made quite a few improvements.
Let me give you an example of a crazy thing which usually happened to us. We a franchisee who enjoyed on the border of Georgia and Alabama. We allowed them to have a joint location in both states. Due to the type of industry we participated in there were different regulations on each side for the border.
I explained to him the fact that he had to run the business a particular way, and he talked about that I was wrong, considering he didn't sign whatever agreement, and he would definitely do it his way. Oh great I thought, now I have a rogue franchisee on my hands, and maybe they are not keeping with the consistency of our brand name.
That really doesn't happen for franchising, and although franchising is an extremely successful feature for distributing goods, services, and products; it isn't Disneyland. I doubt any organization really is.
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 scenarios. Please consider all this and think on.
Worse, the person wasn't following the proper procedures which were part of a large fleet account we had with a nationwide company. Again because the person didn't have to follow are confidential operations manual, which he never read since as he said; "I never signed nothing. inches Nor did he truly go to our franchisor schooling, which is also required of new managers which are running our franchised business model, in the event the owner is not involved in the day-to-day operations.