Legal
How to Salvage a Failing Franchise Unit
by Harold Kestenbaum Ways to Save a Sinking Franchise Even the best franchise systems have weak spots. Maybe you have a franchisee who doesn’t communicate well or one who won’t participate in special programs and offerings. Some franchisees won’t participate in advertising,
20 Pillars of Franchising
fail to report sales and become delinquent with fee obligations. These frustrations are all too common and are usually the result of a financial issue. If both the franchisee and the franchisor are willing to put in hard work, there are options for fixing these faults.
This process is called a work out, and this occurs when a franchisor and franchisee come up with an out-of-court plan to fix or mitigate a failing business. It could include a plan where the franchisee’s relationship is restructured or in some cases, a plan where the franchisee exits the franchise.
