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Australia’s ABC television has presented the first of a 2 part special report on what can sour the franchise dream.
50 per cent of franchisees believe they're not being given accurate information by their franchisors. 30 per cent say they can't rely on the franchisor to keep promises. 28 per cent say they didn't trust their franchisor to be honest; while on the other side of the fence, 30 per cent of franchisors said they didn't trust their franchisees. LateLine Business
Wendy’s franchisee Trevpr Banks says:
We're not getting that national leverage that we're promised when we purchase stores. We're not getting that price advantage for our purchase of equipment or food or our cost of goods.
But private equity owners of the franchisor assure all parties that it is in no-one's interests for franchisees to fail.
We work very hard and very closely with those who are not doing so well to try and help improve their business, but human nature being what it is, there'll always be some people that choose to blame us for their problems rather than trying to fix them. Tim Beecroft – Navis Capital
And Wendy’s warns:
The franchise agreement includes a clause that the franchisees agree not to disparage the brand, and it's important to us that we follow through on that. It's important to our franchisees that we don't have people out there trying to destroy the value of their businesses.
It is important to franchisees that the franchisor does not maximize the performance of its firm by destroying value of the franchisees' businesses. Franchisors always blame the stumbling franchisee for not succeeding.
Sometimes they are right.