A useful history lesson

Those of us who have been around a long time have seen this very same scenario played out in many businesses. It happened in Haagen Daz ice cream; in Hickory Farms specialty foods; just a couple of examples. If it isn't putting single distribution channel products into other brick and mortar stores, it's selling them on the Internet. Either way, it's the same scenario.

There has also been a great deal of litigation over this. In almost every instance, the franchisor prevailed. I'm sure that DD's lawyers are familiar with the litigation history.

This is always where the franchisors go when the new franchise sales revenue stream dries up. Something has to replace that revenue stream. Alternative distribution is usually the direction of choice.

History also tells us that alternative distribution will shrink the franchisee population. Nothing goes on forever, and life cycle dynamics always result in finding ways to milk the brand once it has become old and its growth stage is over. Milking this brand has now begun.--

Richard Solomon, FranchiseRemedies.com,  has over 45 years experience with franchise litigation and crisis management. He is a graduate of The Citadel and The University of Michigan Law School