Fortunately, most of these issues can be resolved in many ways that will work for the mutual benefit of both parties in the business arrangement. Such ease in resolving conflicts and meeting challenges in franchise agreements is the main reason for the growth of the franchise industry in the United States and elsewhere in the world.
Here then are the top 2 common issues and their common sense solutions in franchise agreements, said solutions of which may also require the expertise of the best Rochester accountant in town.
1) Compliance Issues
Arguably, one of the major irritants on the part of the franchiser is the failure of the franchisee to comply with the agreed standards set on the franchise contract including related documents like the manual of operations. Such failure can also become the headache of any Rochester consulting firm hired for the purpose of troubleshooting compliance issues including their causes and effects.
For example, the franchisee will take the liberty of implementing its own food production system including the choice of suppliers for reasons like cutting costs. This leads to issues related to quality of the food itself, sanitation and hygiene, and overall profits, among others.
The solution: Refer to the contract and other related documents for the appropriate actions including sanctions such as penalties for non-compliance with the agreed terms. Keep in mind that unilateral changes to the contract cannot be made by either party lest it is rescinded.
2) Franchise Fee Issues
Yet another issue that the best Rochester consulting firm can provide expert assistance on is the payment of the fees. The issue can take several forms including habitual tardiness in the payment of the full franchise fees, partial payments made against the full franchise fees, and complete non-payment of the franchise fees agreed upon.
The reasons can range from low sales coupled with high expenses especially at the formative phase of the franchisee’s branch to the low value attached by the franchisee on the franchise itself.
The solution: Instead of issuing demand letters and withdrawing certain franchise privileges to the franchisee, the best Rochester consulting professionals will suggest amicable discussions between the franchiser and the franchisee. Letting both parties air their concerns and grievances can often shed light on problems that can be solved by their cooperation, thus, resolving many issues simultaneously.
The franchiser should also make it clear to the franchisee that the payment of the franchise fees is mainly designed to ensure that viable and valuable support systems provided by the former to the latter will continue. The fees are used for the maintenance of these systems instead of being used primarily to fatten the franchiser’s bank account. The franchiser, after all, gets his profits from his main operations, too.
Ultimately, the franchiser and franchisee should iron out their differences for their mutual business benefit while the role of the Rochester consulting professionals remains just that – as expert consultants on matters related to franchising arrangements.
