Bonanza Franchisee Folds - How can we blame the franchisor?

There must be some way to blame Metromedia for the closure of these four Bonanza franchises. Metromedia must have known that these franchisees were ill-suited to be franchisees and they should have forced the Wink family to continue operating the units.

Anti-franchising posters are quick to point out franchisors that they believe act badly, but there is nary a post that condemns franchisees that act in a deplorable manner. You likely won't get many comments from franchisors on this subject since we are used to franchisees that do not listen, do not comply, don't care that they hurt the brand and very often are quick to blame the franchisor.

When The Franchisor Is Clueless, Who Is To Blame?

You make a good point. Franchisees certainly do screw up.

This story highlights that there is a real communication problem between Metromedia and multi-unit franchisee Young Lee. Metromedia stated that they had no idea there were any problems. I would imagine the monthly financials would indicate something. And if they received nothing, well, there is something to report as well. One wonders if the quiet Asian man didn't squeek and so was forgotten.

From the news article, DelMarvaNow.com (hope this site accepts HTML code for hyperlinks) reports:

"The apparently abrupt closing this week of four Bonanza Steakhouse restaurant franchises in Maryland and Delaware caught not only city leaders by surprise, but officials at the Plano, Texas-based parent company who said Tuesday they knew nothing about it. They had no forewarning,” said Monica Feid, a spokeswoman for Metromedia Restaurant Group in Dallas."

on October 28th, 2007

Now we're getting somewhere...

I see Metromedia should have known that there was financial difficulty and should also have known that Asians suffer in silence. 

Okay let's keep going there must be more reasons it was Metromedia's fault and let's also work on additional ethnic stereotypes and generalizations. 

The Truth Shall Set You Free!

TIF

Posted by Truth in Franchising on October 28th, 2007

Mission for TIF: Post Dumb Things Franchisees Do

TIF,

You make a very good point. Franchise owners screw up all the time on their own by no fault of the franchisor.

Do you mind if I pass on a mission to you and do so publicly?

Our franchise owning readers could benefit to read about news in which the franchisee messed up. It can help them think about and avoid those same pitfalls.  So, TIF, should you choose to accept, your mission will be to bring attention to the Blue MauMau franchisee community on Dumb Things Franchise Owners Do.

You can do so by creating a blog entry on news stories in which franchise owners messed up big time on their own and you can do so through community discussions like this particular forum that you have created. 

As far as a format for blogging, let me suggest this. You could preface the story with a short remark highlighting the mess up or management lesson. Then give a quote from the original news story to prove you aren't making such stupidity up (as well as give credit to the reporter and newspaper for their fair work). And finally provide a link to the original story.

It might be an unwanted message, and you might be labeled by some as someone who thinks little of franchise owners. But in your own way those blogs and posted lessons might help some franchise owners out there avoid bankruptcy.

Will you accept this mission? As you so aptly put it, the story needs to be told.

Mr. Blue MauMau

on October 28th, 2007

Guests Can Format Posts if they Know HTML

Guests,

All posts by guests are in plain text for simplicity. BUT, our software recognizes basic HTML format commands like b, p, blockquote, bulletpoints, links, etc. As the reader can see from your post, putting HTML commands will work.

In contrast, registered members have a WYSIWYG edit bar to format text, called rich-text.

Mr. Blue MauMau

on October 28th, 2007

How's the progress on this TIF?

Haven't seen any articles from you. I guess it is easier to just slander those that have any beef with franchising or franchisors - i can see your point.

Sleep tight.

on December 20th, 2007

Being clueless is who's fault?

That's correct. The franchisor, Metromedia, has a responsibility to know the financial statements of an operation of a franchisee for a whole host of reasons.

Whether the Asian suffered in silence or not is not as material as the point that they obviously weren't communicating.

According to the news story, the FRANCHISOR was clueless. Who's fault is that?

on October 28th, 2007

I guess I don't take very good direction?

It's a free country and I put effort where I choose. 

So cowardly guest poster what's your excuse for being here? 

The Truth Shall Set You Free!

TIF

Posted by Truth in Franchising on December 20th, 2007

Actually we don't know what Metromedia knew

This Bonanza franchisee had only operated for a short period of time and we do not know the reporting requirements or if what was reported was truthful.

It is very common for franchisees to not be in wholly in compliance with reporting requirements. I think they should report.

What should a franchisor do if a franchisee is substantially in compliance except for financial reporting; default them and terminate the franchise agreement? What would you do?

Nothing is obvious since we know very little about the matter other than the units closed.

The Truth Shall Set You Free!

TIF

Posted by Truth in Franchising on October 28th, 2007

Master of the Obvious.

"It's a free country and I put effort where I choose. "

Evidently. What a clusterTIF of logic is that anyways?

Sleep tight.

on December 21st, 2007

Homework

Mr. MauMau does prod BMMers to post on topics with which they have familiarity, and has been known to make suggestions. Plus, one of his particular concerns is having some zor-side input to give balance.

Of course, much as we are fond of Mr. MauMau we may ignore such entreaties, but I do think that TiF could give a helpful perspective if he took up the suggestion of Mr. MauMau.

on December 21st, 2007

No Accounting, No Talk

"What should a franchisor do if a franchisee is substantially in compliance except for financial reporting; default them and terminate the franchise agreement?"

Yes. No financials on a chronic basis. No franchisee.

How can a franchisor be certain that the royalties they receive are indeed honest and accurate without proper financial records checking and cross checking? Not having a financial statement prepared is in default of most franchise agreements and at the very least against most operating standards. How can a franchisor be accountable to his own stakeholders if it doesn't know where its units are performing at?

on October 28th, 2007

Well, Oh Master of the Ridiculous...

Couple of questions:

What is your purpose in posting on Blue Maumau?

Why do you persist in posting as a guest and not under anonymous alias?    

The Truth Shall Set You Free!

TIF

P.S. I am sleeping very nicely and thank you for your best wishes!

Posted by Truth in Franchising on December 21st, 2007

Paul I do agree with you however...

I do not think the audience here at Blue Maumau wants to hear a franchisor's perspective. There simply is no upside for me to offer my opinion. 

The Truth Shall Set You Free!

TIF

Posted by Truth in Franchising on December 21st, 2007

Termination for lack of financials and tax returns?

Easier said then done. I'd like to read more opinions.

The Truth Shall Set You Free!

TIF

Posted by Truth in Franchising on October 28th, 2007

I'd like a franchisor's perspective...

...just one that is willing to call a spade a spade and not come off like a partisan hack. You probably have some sage advice to offer no doubt but instead you resort to defending that which is simply indefensible all in the name of defending the franchise model of which you have a vested interest in preserving in its current state given your BMM profile.

Start throwing some objectivity into your comments and you'll probably make friends here.

sleep tight.

on December 21st, 2007

IFA needs luv, too!

There is an audience here for balanced discussion. Not everyone, to be sure, but quite a number of us don't like unchallenged viewpoints even when we agree with the viewpoint presented.

That is why on occasion here on BMM I take the opposite positon of my personal opinion, to the consternation of some zee-side readers who don't understand why I'm taking a zor-side tack.

on December 23rd, 2007

Franchisor's Perspective

TIF wrote:  "I do not think the audience here at Blue Maumau wants to hear a franchisor's perspective. There simply is no upside for me to offer my opinion. "

Try it and see. 

Michael Webster PhD LLB

Franchise News

Posted by michael webster on December 24th, 2007

Financials

The guest makes good points.

Financials (read $$$, how much comes in, how it is used) shows the life-blood of a business. If the franchisor does not know their franchisee's financials, they are clueless about the health of the franchise.

And they are without checks to see if they themselves are getting paid their fair share.

on October 30th, 2007

You make my point...

I'm not here to make friends. If I wanted more friends I can find them with ease or buy a dog.

The Truth Shall Set You Free!

TIF

Posted by Truth in Franchising on December 21st, 2007

You make my point...

I'm not here to make friends. If I wanted more friends I can find them with ease or buy a dog.

Sleep with confidence

The Truth Shall Set You Free!

TIF

Posted by Truth in Franchising on December 21st, 2007

TiF's Xmas card list

TiF may not exactly be sending holiday cards to Susan Kezios, but TiF has challenged some scuzzy zors and practices.

As to making friends, I'd rather strive for an interesting dialogue. If done objectively and with civility, friendly relations may be an upside; but the focus should be on the discourse.

on December 23rd, 2007

I agree...

As a practical matter what should be done about non-compliant franchisees?

I think that there are many current and former franchisee posters on this board that think to hell with what the conbtract says I am not going to give the franchisor my P&Ls and personal tax returns let them default me.

 The Truth Shall Set You Free!

TIF

Posted by Truth in Franchising on October 30th, 2007

and you made mine.

nice dodge on the plea for objectivity. if it walks like a TIF and talks like a TIF...

sleep tight. and keep on spinning - attaboy!

on December 21st, 2007

if he has then i have yet to see it.

his defense of the quiznos system is sickening. his cynical contempt for franchisees is sickening.

TIF - post the url of a single post where you take a franchisor to task. just one. i can't find it.

sleep tight.

on December 24th, 2007

You're not the boss of me!

Besides I've always been objective.

Sleep loose! - You may be wound to tight! 

The Truth Shall Set You Free!

TIF

Posted by Truth in Franchising on December 22nd, 2007