Franchisors need to examine the cost benefit relationship of requiring frequent franchisee remittances vs. working capital benefits.
Too often in our practice at MSA Worldwide, clients will present to us a set of facts that their lawyers have determined is a license, but in reality is a franchise.
Field staff perform multiple functions in a franchise system; not only monitoring franchisee compliance, but also contributing to system growth far beyond completing a site visit checklist.
Regardless of the cause, the loss of any single franchisee-owned location should be viewed with concern by the franchisor, and should be analyzed to discover the reason and prevent future failures.
The principal reason many companies choose to franchise is that it allows for expansion without the amount of capital funded by the franchisor that is required under other forms of expansion.
This in-depth article addresses one of the most difficult business and relationship issues for franchisors to manage - the transfer of a franchised location between franchisees.
Just like any other fee imposed in a franchise agreement, advertising and marketing fees must be structured in a way that balances the franchise system’s need for the funds with the franchisee’s practical bottom line return on investment.
Understanding unit failure is a chance to improve your franchise system, and it’s important for franchisors to understand why each location failed.