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FRANCHISEE REALITY

When there are serious problems of franchisor over reaching that impact substantially upon the franchisees’ potential profitability and ability to compete, there are always typical and ineffective patterns of response.

The franchisees complain and seek adjustments in the franchisor’s agenda, almost always without positive results. In many cases a leader will emerge from among the franchisee group, but he will usually not receive substantial support from the franchisee group to accomplish anything other than making him/herself a target for retaliation by the franchisor.

There will be talks with lawyers, informal meetings of small franchisee groups, maybe even visits to government agencies, thinking the government will step in and “fix” the problem. The government never does. In most cases the lawyers consulted haven’t the faintest idea what to do. Sometimes money is wasted on legal research and more “begging”. Time passes. Matters worsen.

In every franchisee group there is inertia, a reluctance to rise up and do anything. Part of that inertia is the product of the natural human desire to avoid confrontation, to pay attention to running the business, to wishful thinking, and to assumptions by most franchisees that they don’t have to participate in any resistance movement – they can let the troublemakers stick their necks out and do it. They believe, always wrongly, that whatever a small leadership group may accomplish for themselves, the sideline standers will also benefit from – an erroneous assumption that the system will be changed for everyone if it is changed for a few. It almost never is.

If there is an out and out violation of the franchise agreement, a lawsuit may cure the problem, if there are enough litigants to pay the lawyers –and there usually are not. If it is borderline or probably not a contract violation, lawsuits won’t help in most situations. Lawyers have learned, most recently from the Meinecke Muffler case, that contingency fee representation of franchisees is something to be avoided.

Where does that leave suffering groups of franchisees? What can they do if they have any chance to accomplish any meaningful relief?

There is one eternal and axiomatic truth. Unless the vast majority of them band together and create a really well run franchisee association, and support it with an adequate budget to obtain experienced specialized association management and representation, nothing will ever get better.

Franchisors will freely compete by putting the franchised products into discount houses and other channels of trade, and by competing directly on the Internet against their own franchisees. Franchisors will overcrowd territories and destroy profitability and investment value. Franchisors will acquire competing systems and support them with the royalty and other income from their original franchisee group. Franchisee investment value will be lost, one by one, weakening the franchisees every month and every year. It will get worse every month until something is done.

Franchisors count on their franchisees to act like a flock of sheep. Franchisors assume that franchisees are too frightened, too timid, and too cheap to support any kind of competent resistance to any franchisor program.  And most of the time the franchisors have been right in that assumption. Will that ever change? Not without determination to organize and act effectively in a professionally regimented resistance group. Is it fun? Hell no! Is it even affordable? Yes, if there is real vast majority level support. Annual per store costs for this kind of endeavor is extremely manageable. One hundred franchisees with 150 stores can have an effective franchisee association, professionally managed, with aggressive specialized representation, for about FIVE DOLLARS PER DAY PER STORE. Is there anything in the world less costly for your business than that? Smokers spend more than that on cigarettes.

So, if your program is becoming an insufferable morass of franchisor over reaching, and you would like to have some chance to preserve the value of your equity in your franchised business, you, as a group, will simply have to make a decision to rise up and defend yourselves. No one will hand it to you as a gift. You are most certainly losing more every day than the cost of doing something about it.

Call us and arrange a meeting. We can do this for you in an effective manner. We have been in the franchising industry for a very long time; we know how it works and how it can be made to work. We will help you get your franchisee group organized and help you get the support that will give you credibility.

The first organization ever to offer professional management of franchisee associations as a discrete specialty. With almost 60 years of combined franchising experience, www.FranchiseAssociationManagement.com finally puts at the fingertips of every franchisee group and effective facility to address their most serious issues. franchisee associations, franchise problems,franchise relationships, franchise abuse, franchise support, franchise supplies, franchise royalties, franchise pricing, advertising funds, franchise territories, franchise encroachment, encroachment, franchise resale, franchise agreement renewals, franchisor approval, franchisor consent, franchise audits, franchise competition, franchise trouble, franchise inspections, franchise termination, franchise default, franchise notice, franchise trademarks, franchise servicemarks, franchise appearance, franchise remodeling, franchise updating,franchise rebuilding, heirs, guaranty, franchise leases, franchise premises,franchise mergers, franchise acquisitionsfranchising experience


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