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Log In / Register | Apr 25, 2018

Why Don’t Franchisees Read Their Contracts?

This SmartCompany article brings home to readers one aspect of what BMM experts constantly warn about. ‘An ongoing challenge in franchising is the lack of understanding among franchisees of their obligations under the franchise agreement.' Jason Gehrke - Franchise Advisory Centre

Did you care what it meant?Whether you read your agreement and understood it is irrelevant. If you sign it - you are bound to it.  You accepted the contract, you accepted the model and you accepted the franchisor.  You don't get to pick and choose what you will or will not comply with later.

Genuine grievances aside; franchisees tend to weaken their ability to pursue such complaints by reacting badly when there is little, if anything, to be gained and much to be lost.

‘Frustrations can quickly build up on both sides and in the process, the franchisee's respect and regard for the franchisor is diluted, and the franchisor is often more determined than ever to force the franchisee to do/change/stop doing/upgrade or divest the required thing, or otherwise send the franchisee a breach letter putting them on notice that unless they comply they may have their franchise terminated.'

How many franchisors sit down with a new or prospective franchisee and explain historically contentious obligations?  Most causes of potential franchisee complaint are known in both good and bad franchise systems so why not deal with it up front and avoid the stress?

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