Franchising is about teamwork and relationship. In any kind of relationship you will encounter frictions, whether you like it or not. Here’s my view on how to resolve franchise disputes.

Disputes are often inevitable. Franchisors are doing their best in forming a franchise agreement that will work for them and for the franchisees. Franchisees are also doing their best in complying with the agreed franchising terms.

Unfortunately, there will be times that what’s written in the franchise agreement can’t be met by either franchisors or franchisees. Since there are high expectations from both sides toward the franchise agreement, a small mistake can damage the relationship …

Entrepreneurs and business owners are fierce competitors. Franchisees, too, are great competitors. As a franchisee, should you take on your fellow franchisees?

I have said numerous times that franchising is about relationship. Along with your franchisor and fellow franchisees, you build the same brand, in such a way that if one franchisee sucks, the others will feel the impact, too. On the other hands, if you have a great team work with the other franchisees, your franchise prospers.

However, each and every franchisee has his/her own vision of what his/her franchise units will become. To achieve this vision, you need to take on competitors, …

Franchising is more appealing to entrepreneurs than ever – Many thanks to the recession. People are ‘forced’ to take entrepreneurship route due to downsizing and troubled personal finance. As people need a hand in guiding them in the new frontier, franchising comes to the rescue, offering proven system, strong brand name and support/help along the way.

I’ve just read an article from the NYDailyNews.com that, in essence, echoes to what I believe all this time – Franchising as the legitimate business model in the midst of economic uncertainty.

The article, titled In weak economy, having your own biz, but not being on your own, has …

We are always ‘reminded’ by various publications on franchising, online and off line, that franchising is expensive, and bailing out from the franchise agreement is costly for the franchisee.

Unfortunately, not many realise that not only franchisees, franchisors are also financially affected by the franchisee-franchisor partnership break-up – And that is just the tip of the iceberg.

Break-up costs to the franchisee

It is obvious that the franchisee will be severely hit by huge monetary loss due to ‘the-usuals’ in the franchise agreement – The non-competing agreement and the right for the franchisor to terminate the franchise agreement almost at will.

The non-competing agreement …

You can’t simply please everybody. This fact also applies in franchising.

If you are a franchisor, you can’t simply keep all of your franchisees happy, no matter how well you set the SOP (a.k.a. the “game plan”) and how hard you try to please your franchisees.

The cold hard truth is, “bad” franchisees will nag, whine, and even stab at your back no matter how perfect your franchise is – They simply can’t be pleased.

The truth is even worse if you are a franchisee. Your fellow franchisee that has a bad attitude toward the franchise can also impact your franchise unit.

Why “bad” …

When it comes to franchising, franchisee-franchisor relationship is often more important than the business itself.

In franchising, if you have a bad relationship with your franchisor, you will not run your franchise unit well. Not that your franchisor is subjective in giving support and assistance, but like it or not, you need to teamwork well with your franchisor to make the most of your investment in a franchise – A bad relationship won’t help you to achieve this.

A case study of franchisee-franchisor relationship gone bad

I remember a case, in which bad franchisee-franchisor relationship ruin a what-suppose-to-be successful franchise unit.

The franchise unit …

Can you get rich with franchising? Yes. Just like anything else in business world, you can achieve your financial milestones well if you do the right thing.

Being a franchisee for several years makes me realises that not all franchisees are born or created equal – The personal traits of the franchisees govern how well they can work with a certain group of franchises.

Those being said, there are general qualities that each and every franchisee has (and should acquire).

Rich franchisee poor franchisee

Inspired by the work or Robert Kiyosaki – Rich Dad Poor Dad, I coin this term: Rich Franchisee poor franchisee…

A conventional wisdom on franchising says that absentee ownership is not ideal in running franchise units; Therefore, most franchises offer franchising opportunities that do not allow absentee ownership. Perhaps they should think about allowing absentee ownership, as it presents a win-win solution for both franchisee and franchisor.

Absentee ownership means owners who are not physically present on-location to manage their franchise unit’s daily operation.

Non-absentee ownership requirement is justified due to the fact that franchisors need to maintain franchise operation quality standard across their franchisees, and to achieve this, they require non-absentee franchise unit owners. Of course, there are some exceptions, such as in semi-automatic …

There are certain criteria that are well-sought after by a franchisor in accepting an investor proposal to be a franchisee – And no, it is not always about how much money you have to fund the franchise unit purchase.

Your ability to fund the purchase of a franchise unit is one of the technical criteria, along with some others investment-related issues, such as your funding methods, your net worth, financial track record, and such. However, there are other criteria to help a franchisor consider a franchisee, beyond how much money you have to buy the franchise, such as the followings:

The ability to follow rules…