Excitement runs high when operating your very first franchise.
But as time goes on, hiccups may dim the light you initially felt. This is normal and shouldn’t lead to frustration.
Knowing some hidden tidbits your franchisor may have missed during early talks can help.
By the end of your reading expect your light to once again be shining bright!
Franchisor and Franchisee Relationship
Naturally, there are plenty of perks in starting small business ownership off as a franchisee. You can expect support over the course of the working relationship with your franchisor.
A few key areas of aid:
- Training to accelerate early success
- Professional advertising materials
- Mentorship from a successful owner
- Established brand recognition
But there are a few occasions when assistance is handed off to a master franchisee instead. Picture him or her as a “general manager” over a geographical area.
If your franchise agreement includes one such individual, you should be aware of a few details:
- Certain obligations are split between the master franchisee and franchisor
- The master franchisee may change over the course of operating your business
Initial training may fall to the franchisor, but they may pass it to the master franchisee for ongoing coaching. This isn’t necessarily a bad thing, unless your experience level is equal to your different trainer.
Term limits apply to the person you’re receiving assistance from. Should somebody new come in, you may see a dip in support or the ability to reach them when questions come up.
Protecting Your Business
Are there any ways to safeguard your investment?
You can decrease any future headaches by negotiating limitations on responsibilities the franchisor can delegate. Or you could argue for a provision to the agreement which allows you to get direct support if the master franchisee isn’t satisfactory.
There’s no reason you can’t maintain a cordial partnership. Because it will help your business thrive in the long term.
Next, let’s consider another scenario your franchisor isn’t likely to highlight at the beginning.
Franchisor vs Franchisee
Situations outside of your control can arise at inconvenient times. But you should still be conscious that the franchisor can choose to terminate or not renew your contract.
The reasons may vary, but we’d like to provide a couple of possible scenarios:
- Poor planning by the franchisor
- Unforeseen economic conditions
Working diligently to grow your business and making wise financial choices creates a cushion should either condition show up uninvited. Rather than worry about potential risks, keep doing what you do best.
Building a profitable venture!
Notice that we’re discussing circumstances you weren’t responsible for. Should you choose not to pay royalty fees, willfully damage the brand, or provide incorrect financial figures, you’re answerable for any final decision from the original owner.
Now, there’s a question worth asking at this point.
How to resolve disputes between a franchisor and franchisee?
Even if you’re forced to shut your doors, there’s steps you can take to avoid a major setback. Consulting with a professional reassures you that any present storm can be weathered.
Reidel Law Firm Aiding Franchisees
As experts in franchise law, we can help you handle the legal aspects of any franchisee issues.
In addition, our legal team can advise you on ways to shore up gaps in the following areas:
- Franchise your business
- Review FDD/FA
- Review personal guaranty and real estate control docs
- Franchisee formation, guidance, and asset protection
- Franchise system compliance audit and training
- Franchise planning
By effectively managing risk and maximizing opportunities for businesses we answer the needs of our clients wherever and whenever they arise.