Be Prepared if Your Franchiser Fails
In this dicey economy, it is wise for franchisees to prepare for the possibility of their franchisor declaring bankruptcy. Experts - weigh in - is the WSJ correct in reporting what franchise owners should do when their franchisor declares bankruptcy?
- Look for a Franchise Chain with an Independent Franchisee Association. Join a franchisor that has an independent franchisee association so that you have more say and bargaining power in the management of the franchise chain.
- Create an Exit Plan. "Make sure you have an exit plan to rebrand [with a different franchiser] or go independent," he says. Often, a franchised system can "implode very quickly."
- Save $$$ for ads and PR efforts. Franchisees will want to save away money for ads and public relations efforts to let their customers know that they are still in business after their franchisor's chain has gone under.
As with the Bennigan's franchisees, are franchisees free to go it alone if their franchisor files bankruptcy?
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