Franchise Agreements are NOT the Holy Grail
They Can Be Broken
There is a flaw in the franchise agreements we see all over the franchise industry, and it makes no difference what franchise it is.
The flaw is that you the franchisee pays royalties to the franchisor on GROSS REVENUE!
THE FRANCHISEE ONLY EARNS ON NET PROFIT!
So at the end of the year, the franchisor gets their 5-10% royalty on gross revenue which can be sizable, and it is entirely possible that the owner, franchisee gets zero. Or worse yet you lose money as there may not be any net profit left over. Furthermore, the franchisee borrowed significantly and invested much to enjoy this so called profitable business opportunity.
It’s unfair as the real promise of the franchise commitment is to assure you that you make money. That is what the franchisor is selling, a tried and true promise to make you money because they have created a business system that works.
They package the business, advertise for you, train you, and you are supposed to earn a profit. Frequently what happens is the franchisor makes money, and the franchisee does not.
It’s not right because you spent a significant amount of money for the franchise, even more for the build out, and had to pay for the operation while you grew revenue. Then at the end of the year, the Franchisor always wins, but you lose.What happened to the real promise?
Worse yet, the franchisors have you sign a rather massive contract, many inches thick, which tends to control your life before, during and after the relationship exists. There’s non-competes, non-circumvention, and all manner of commitments preventing you from doing much of anything regarding the franchise business should you choose to break the contract and go out of business.
In fact, these contracts are so overwhelming that few dare to challenge them. It’s too frightening for most to face.
It’s all a myth
Of course, you can break the contract and with certain basic protective strategies, re-enter the business of the franchise and do a better job for yourself without the royalties, etc.
The underlying debt that you the franchisee incurred from the bank, or the SBA, and lines of credit, etc., may be the very reason the contract must be broken.
We can implement our debt forgiveness strategies and free you to not only operate as a successful business without the excessive unsupportable debt, but when appropriate, you may take the extra step and rid yourself of the franchise relationship as well. You can re-enter the business world doing a similar business but not as a franchisee and without the negative consequences promised by the document you signed.
Magic? No! Just clear thinking and astute strategies that handle the details required to succeed.