A well-established franchisor-franchisee relationship is always constructive as it benefits both parties. This is especially when agreement terms and conditions are strictly adhered to. However, the same can come with unexpected repercussions if one side violates these rules. Not all franchisors will handle such storms in a similar version. Some may be quite considerate but others will be a complete opposite. It is therefore recommended that you consider the tips below before becoming a distributorship franchise.
The Interests and Business Goals of the Franchisor
There are multiple franchising business opportunities in India but not all of them give promising upshots. When there are similar interests, it becomes easier for the franchise to promote the franchisor’s brands through the license given for the ownership of the brands. However, when there is no match with regards to goals and interests, any disputes arising may be unsuccessfully handled. How can you determine whether franchisors share similar business goals and interest? You can easily inquire this from the current and past franchisees that may have terminated from the business.
Expanding or Diminishing Number of Franchisees
Most of the franchising business services in India where there is an organized way of solving disagreements always attract more franchisees. No one would want to enter into a pre-purchase relationship with a partner who lacks appropriate dispute solving skills. The trend of more franchisees exiting from the business should raise questions in your mind. The most probable cause of such a constant exit could be poor ways of solving disputes. Moreover, there is no harm if you ask them why they are all terminating from the business.
Franchisor’s Litigation Record
All franchisors that have been in the corporate field for a long time have specific records that give an account of how they have been handling disputes with their franchisees. It is easy to get this information; all you need to do is a request for the franchisor’s disclosure document. It is a prerequisite from the Federal Trade Commission that demand every franchisor to hand over this document to a franchise before the two parties can engage in any mutual business relationship. From the records, you can determine whether the individual is skeptical or trustworthy.
Consider the Franchisor’s Attitude
This information can be helpful to any potential franchisee. He or she can evaluate how the franchisor has been dealing with his or her past franchisees. For instance, it will reveal the attitude that has existed between the franchisor and his or her franchisees. If the franchisor has earlier maintained a constant positive attitude towards all preceding franchisees, then he or she is worth giving a try. If the two have had a poor relationship in the past, then that is a red line you should not dare to cross. People with the right attitude will always have their business grow since it will attract multiple potential franchisors.
Even with great franchise opportunities available, it is still necessary to consider franchisors who can handle disputes in an organized way. Ensure you stick to the above tips.