Franchisors prior to the sale of a franchise collect information from franchisees to qualify them in the Sales Process to see if they can afford the franchise. Even more importantly by asking for this information the Franchisor can insure that the Franchisee has the necessary cash flow to float the franchised outlet and the franchisees salary until a point of profit or approaching to ROI. A few franchisees have complained and commented that franchisors use this data later on if there is a problem to their advantage when termination proceedings of the franchisee are initiated due to cause or breech of the franchise agreement such as non-payment of franchisee royalties. These comments from franchisees about franchisors collecting financial data is interesting, I can understand this intellectual observation, nice point, and indeed they are correct that the franchisor would take this into consideration in dealing with any threats of lawsuits you might have with regards to risk/reward scenarios of picking its battles, wouldn't you if you were a franchisor? These franchisees also complain about deception in financial disclosures, yet the franchisor gives you all their financial information right? Why, well because franchise buyers and their attorneys have demanded it and bureaucrats agreed. Now they wish to hide theirs so that the franchisor does not know how much money you have to fight them with? Well, then they wish to use deception and trickery to bluff the franchisor into backing down because they might assume they have money to fight them with; so they are explaining the basic Poker Game of Texas Holdem'. Well then they are wishing to employ Deception to win? Right? So then why are they complaining about deception? Sounds like sour grapes, hypocrisy and turning the tables on the fact that they wish to lie and not allow others to lie to them. And yet the Franchisor did not deceive them in anyway? Their argument is therefore null and void of reality; I cannot listen to that point of contention, so let's move on. Perhaps you will learn some interesting lessons from this topic of conversation. |
