Franchisee Royalty Refusal, Franchisor Resolves By Liquidating
When franchisees refused to pay $600,000 in royalties to Australia’s Enact Business Architects, the franchisor reacted somewhat unusually by entering into liquidation.
Trevor Holmes, managing director-chief executive, and fellow director Keith Grisman had confronted claims by franchisees that they had mismanaged the business.
In a last-ditch attempt to save Enact, Mr Holmes met with franchisees last Monday but his request for an unconditional pledge to pay monthly fees owed to the firm was rebuffed by enough to seal its fate. Sunshine Coast Daily
Following his decision Mr Holmes suggested:
It literally is a crying shame that a small group of non-performers could bring us down like this and affect so many good people.
This might possibly be one of the stranger franchisor methods for the handling of a dispute and once again a business consultancy franchise with a performance problem.
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