Franchise Advice


When you are still finding out about each


other, you will be revealing information about each other and forming opinions based on this. Franchise recruitment should be a


process. A process that allows each party to make an informed decision on whether they want to get into this long-term relationship or not. If, at any time before the agreement


is signed and the initial fee is paid, either party feels uncomfortable, they should pull out and be respectful to the other side.


What happens if it needs to end?: Let’s be honest, everything is finite. And the end doesn’t always have to be negative. Yes, any relationship could sour, but it doesn’t mean that both parties can’t come out of it with big smiles on their faces. The top franchisors will talk about exit


strategies with potential franchisees even before the franchise legal agreement has been signed. Most agreements are generally for five years, so the franchisor needs to understand what the franchisee is likely to do in the future. There are distinct options: Ÿ Re-sign a new agreement for


34 | The Franchise Magazine 2024


another term (usually at no extra cost, and dependent on if both parties want it to continue.) Ÿ Hand the franchise back, wave goodbye to each other, to never see each other again (but be aware of restrictions from the legal agreement on what the franchisee is allowed to do once the agreement has ended.) Ÿ Sell the franchise to a new franchisee (with the franchisor’s approval) and hopefully dance off into the sunset reaping the rewards of their hard work.


If the relationship needs to finish before the agreement end date, it’s usually because there has a been a breach (or series of breaches) of obligations from either party. The legal agreement needs to be solid enough, and professionally written, to protect both parties and allow them to mutually end the agreement amicably. By both parties having a full understanding of the agreement before it’s signed (the franchisee should have it checked and explained to them by a BFA-approved lawyer), they’ll both be in better place should they need to pull it out of their filing cabinet one day.


Our 5 top tips for a successful long-term franchise relationship: 1. Talk to each other (regularly!) 2. Be honest and open with each other on a business level 3. Show empathy and understanding to each other (and learn about the challenges that each other faces) 4. Share the same values and purpose (working towards the same goals is immensely powerful) 5. Give each other enough space to breathe but be there when it really matters. n


Phil Mowat is Managing Consultant at Ashtons Franchise ConsultingP


For more help with your long- term (franchising) relationship get in touch with Ashtons Franchise Consulting – they’ll be happy to listen and offer advice.


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