Seems like a simple enough question. However, I think many franchisors forget they are in two businesses. One is the underlying subject-matter expert on the service provided to consumers, such as a restaurant, gym, roofing, and so on. But the second, and increasingly more important as your system grows, is the business of franchising. By Tom Spadea
For many franchisors, the goal is to get your system and your agreements to the point that you no longer need to entertain addenda or changes to your franchise agreements. But for new brands, that is just not realistic. By Tom Spadea
As the old saying goes, the best time to plant a tree was 20 years ago. The next best time is today. Many emerging and startup franchisors hold off on collecting their brand fund fees because they don’t have a plan for the money, and they are still getting used to being franchisors. By Tom Spadea
Effective communication is not just about what is said or written, but how well it is heard, understood, and retained. As a franchise lawyer, we spend many hours with our clients, trying to turn their business model and vision into readable, unambiguous, and enforceable agreements. By Tom Spadea
Many systems are tempted, as they update and renew their FDDs, to lean into more restrictive clauses and aggressive enforcement programs against wayward franchisees. By Tom Spadea
Franchising is about creating a community of business owners working out of the same system and sharing the same goals, metrics, brand, system, etc. It is franchise malpractice to not have your franchisees reporting their numbers in a uniform way, which starts with a standard chart of accounts for your franchisees. By Tom Spadea
Why do customers buy from your franchisees? That should be the question at the root of every decision a franchisor makes. Does the system continue to deliver the brand promise that created the original profitable unit that pushed the founder into franchising? By Tom Spadea
Many of our franchisor clients are run by a dynamic and charismatic founder with the vision and passion to lead the brand through the wild and unpredictable ride of franchise growth. By Tom Spadea
It is so tempting for a franchisor to only tout what they do well, the good decisions they have made, and the incredible systems they have built. Although it may sound counterintuitive, a big part of the value of experienced brands comes from all the things they didn’t do well over the years. By Tom Spadea
As a crab grows, it must periodically shed its hard outer shell, at which time, its inner soft shell expands and hardens, giving the crab room to grow. This is an oversimplified explanation of the “molting” period. By Tom Spadea