No, no, bloody well no

I’m a great believer in franchising. In fact, I think almost any business can be franchised in one form or another.

All it takes is for there to be a duplicatable system for delivering the product, winning customers and running the business and it can be done. That’s not to say that every business should be franchised… just that every business could be.

Go on, ask me about any business and I’ll tell you if it’s been franchised…

An airline?

Yep, there are a number of franchised airlines out there, mostly in the states. It’s also true that many airlines have franchised parts of their business if not everything.

Dentistry?

Yep, once again. It’s not exactly a full dentistry practice but there’s an organisation that has franchised teeth whitening processes… very entertaining if you see them at the franchise shows.

Portrait photography?

Ah… yep! There’s a franchise that teaches its franchisees to take pictures. They get sent of to a central site to be processed. There’s another franchise where franchisees take plaster casts of things for keepsakes… babies feet seem to be most common.

I could go on, but I won’t mainly because I was having a conversation with a very clever friend of mine who pointed out that franchising is essentially an agreement between two parties; the franchisor and the franchisee. If there’s anyone else involved it gets a bit crowded.

He went on to tell about a franchisor who had won a concession in a department store and had to open fifty or so new businesses in a very short period. They decided to franchise. All well and good so far, except for one very difficult situation.

The franchisor remained the concessionaire in every store – the contract for doing business was between the franchisor and the department store at head office level. The franchisee was only a sub-concessionaire. Money from their trading was paid by the store’s head office to the franchisor who then paid it (sometimes) to the franchisee.

This is when my friend uttered the immortal words ‘no, no bloody well no.’ Our esteemed co-blogger Dirk van Dijl will tell you about the need to retain control of cash and in this case, the franchisee just didn’t have control.

This made things difficult for them… it didn’t help that the franchisor was a crook but, notwithstanding that, if things went wrong between the franchisor and the store at head office level, no matter how good the franchisee was, they would be without a business and litigation would be a very real possibility.

I had to concede the point that, in this case, the business should never have been franchised.

…just about any other business is fine, though!

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