As a former franchisor, & having franchised my company for over ten years before I sold it, it seems to me that I'd experienced every feasible scenario. Most people think that franchising is cut & dry; you have a franchise agreement, people pay you a definite amount to buy their franchised outlet, & then they operate the business or store for a ten year term with automatic renewals. Yes, that sounds like a first rate business model, however 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 an ideal franchise sale where everything went exactly perfectly; where the franchisee qualified for the loans quickly, had an ideal resume, had an ideal location, didn't care to negotiate any terms of the franchise agreement, & everything went ideal in the coursework of the ten years they were in business prior to renewal. That doesn't happen in franchising, & although franchising is an successful business model for distributing goods, services, & products; it is not Disneyland. I doubt any business is.
Let me give you an example of a crazy thing that happened to us. They had a franchisee who lived on the border of Georgia & Alabama. They allowed them to have a joint territory in both states. Due to the type of industry they participated in there were different rules & regulations on each side of the border. day, I happened to fill in for of our area representatives in that region, & I went to visit the franchisee on the Georgia side. When I got there, I was one time speaking to his brother-in-law. Apparently they was now jogging the business, & our franchisee had transferred the business to him without authorization.
You see, in the franchise agreement there's stipulations before you transfer the business to someone else, the new franchisee has to then sign the latest franchise agreement, & they must be approved by the franchisor. It turned out the brother-in-law was not jogging the business as per our confidential operations manual, they had made a few changes. I explained to him that they had to run the business a definite way, & they said that I was one time wrong, because they didn't sign any agreement, & they was going to do it his way. Oh great I thought, now I have a rogue franchisee on my hands, & they are not keeping with the consistency of our brand name.
This is a serious issue, & it happens more often than people recognize. Franchisors need to demand that the proper procedures are followed, otherwise you run in to all sorts of situations. think about all this & think on.
Worse, they wasn't following the proper procedures which were part of a immense fleet account they had with a national company. Again because they didn't must follow are confidential operations manual, which they seldom read because as they said; "I seldom signed nothing." Nor did they ever go to our franchisor training, which is also necessary of new managers which are jogging our franchised business model, if the owner is not involved in the day-to-day operations.
Over the years, I don't think I ever had an ideal franchise sale where everything went exactly perfectly; where the franchisee qualified for the loans quickly, had an ideal resume, had an ideal location, didn't care to negotiate any terms of the franchise agreement, & everything went ideal in the coursework of the ten years they were in business prior to renewal. That doesn't happen in franchising, & although franchising is an successful business model for distributing goods, services, & products; it is not Disneyland. I doubt any business is.
Let me give you an example of a crazy thing that happened to us. They had a franchisee who lived on the border of Georgia & Alabama. They allowed them to have a joint territory in both states. Due to the type of industry they participated in there were different rules & regulations on each side of the border. day, I happened to fill in for of our area representatives in that region, & I went to visit the franchisee on the Georgia side. When I got there, I was one time speaking to his brother-in-law. Apparently they was now jogging the business, & our franchisee had transferred the business to him without authorization.
You see, in the franchise agreement there's stipulations before you transfer the business to someone else, the new franchisee has to then sign the latest franchise agreement, & they must be approved by the franchisor. It turned out the brother-in-law was not jogging the business as per our confidential operations manual, they had made a few changes. I explained to him that they had to run the business a definite way, & they said that I was one time wrong, because they didn't sign any agreement, & they was going to do it his way. Oh great I thought, now I have a rogue franchisee on my hands, & they are not keeping with the consistency of our brand name.
This is a serious issue, & it happens more often than people recognize. Franchisors need to demand that the proper procedures are followed, otherwise you run in to all sorts of situations. think about all this & think on.
Worse, they wasn't following the proper procedures which were part of a immense fleet account they had with a national company. Again because they didn't must follow are confidential operations manual, which they seldom read because as they said; "I seldom signed nothing." Nor did they ever go to our franchisor training, which is also necessary of new managers which are jogging our franchised business model, if the owner is not involved in the day-to-day operations.
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