What should failing franchisees consider? When failing franchisees contact us for help with their franchise there are a number of concerns that need to be considered. This blog post is intended to provide some tips for those failing franchisees.
First of all, failing franchisees should consider consulting with their franchisors for suggestions and help. Many times failing franchisees are nervous about discussing their situation with the franchisor. However, the franchisor may have some valuable insight into ways that failing franchisees in their system can improve their businesses. In addition, the franchisor may be a valuable resource if failing franchisees would like to sell their businesses. Some franchisors maintain a list of locations available for resale and will list failing franchisees’ locations.
If failing franchisees are location based, they should consider discussing options with their landlords. The landlord may agree to defer rent for a period of time or even forgive past defaults. If failing franchisees are selling their business, the landlord may even agree to wait until the franchisee receives the proceeds from the sale to recoup past rent and charges.
Most importantly, failing franchisees should consult with an experienced franchise attorney to assist and advise you in the path to improving, selling or terminating your franchise and/or your lease.