I recently saw an interesting TED talk on how to be a great leader from Simon Sinek. In the talk he told a story about a business owner who refuses to fire any employees for poor performance. Instead, the company coaches their employees to perform better.

Imagine if franchise operations followed the same philosophy and did not terminate franchisees for poor performance.

In my experience many franchisors do the exact opposite. I usually see little effort to coach up and improve the performance of poorly performing franchisees. Demands are generally made of franchisees to catch up with royalties and other fees. If payment is not made, termination often occurs. All too often I see the decision to terminate is made with little effort to get the root cause of the problem or help the franchisee. Rather than trying to work with a franchisee, it seems as though it is far easier to cut ties.

My theory is this occurs for a couple of reasons. First, many franchisors are really good at getting people into business but not necessarily great at keeping them in business. Second, there are very few obligations written into most franchise agreements for the franchisors to actually provide a level of coaching and assistance. But despite these concerns, most franchisees will tell you the reason they purchased a franchise business was because of the assistance they believed they would receive from the franchisor. An interesting dichotomy indeed.

So what to do? Well, good franchisors do coach their franchisees. If you are considering a purchase of a franchise, don’t just talk with successful or happy franchisees. Talk with those that have struggled. Find out if the franchisor has done anything to help the struggling franchisee. Does the franchisor provide excellent training programs? Do they actually have ongoing operational support? And do they actually provide marketing assistance? These are just some of the questions to ask. You want a franchisor that makes your success a priority. And unfortunately, that is all too often not the case.

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Rush Nigut is a shareholder with the Brick Gentry Law Firm in West Des Moines, Iowa. His practice includes both transactional and litigation matters including franchising and business law. Rush started his legal blog, Rush on Business, in 2006. He has been quoted…

Rush Nigut is a shareholder with the Brick Gentry Law Firm in West Des Moines, Iowa. His practice includes both transactional and litigation matters including franchising and business law. Rush started his legal blog, Rush on Business, in 2006. He has been quoted or referenced by hundreds of other blogs, websites, and publications. He also is the editor of the Brick Gentry Trial Team blog and can help you identify the most qualified lawyer at Brick Gentry to handle your case. Our lawyers have a breadth of trial experience in personal injury, employment discrimination, business litigation, IP law, and class action cases.