Running a franchise can be very rewarding, but what should you do if things start to go south? Nancy Lanard of Lanard & Associates answer this tough question below. 

It is not uncommon for me to get calls from clients facing tough times with their businesses. Often they are afraid to reach out to their franchisor or landlord for help. By the time they get in touch with me they are typically in need of urgent guidance. Here are some steps to take if your franchise is on shaky ground. 

• Start a Conversation with Your Franchisor

It may come as a surprise, but your first move should be to have a discussion with your franchisor. They should be invested in your success and may even help to offer support. This could include temporarily waiving royalty fees, providing extra training, giving operational advice, or even repurchasing your territory. Addressing the issue early on can prevent them from getting to the point where it must be disclosed in the Franchise Disclosure Document, (FDD) which franchisors like to avoid.

• Speak with your Landlord 

This suggest may not be the most obvious, but landlords can be more flexible than you would think. Landlords usually prefer to help keep your business afloat rather than face an empty space, especially in less competitive markets. Therefore they may be willing to negotiate temporary rent reductions (may need to be recouped later) or shortening your lease. 

• Address Any Notices of Default 

Receiving a notice of default may be quite alarming, but it is crucial that you contact us right away to discuss your options. You may have to assert any claims you have against the franchisor or see if your franchisor can assist you in finding a buyer. Considering all available options before responding is key to making your best decision. 

• Consider Selling Your Franchise

When recovery seems out of reach your best option may be selling your franchise. This can free you from ongoing obligations under the franchise agreement and lease, allowing you to start fresh. You may have to sell at a lower price but the benefit is clearing your commitments and moving on without further liabilities.

Conclusion 

Take Action Early- if your franchise is in trouble, don’t wait to seek help. Early prevention can provide you with more options to turn your business around. Start by talking with your franchisor and landlord about potential fee reductions. If you’re failing a notice of default, get in touch with us immediately to plan your next steps. If your situation does not improve, consider selling your franchise to cut your losses and move forward. Remember, facing these challenges head-on can provide you with a way out or a path to recovery. For personalized advice and support, reach out to us as soon as difficulties arise.

If you have a curiosity about franchise concepts that match with your interests and goals, Click here to schedule a casual call with Telanda

Visit the website | Follow me on LinkedIn 

Link to the Lanard and Associates Blog 

#thefranchiseeducator #franchise #franchising #franchiseownership #franchiseopportunities #business #businessownership #businessopportunities #thefranchiseeducatorblog #career #success #beyourownboss #entrepreneur