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CASE
STUDY 3: LESS HASTE, MORE SPEED
Background
This franchisee had been approached by an international franchisor
from the US. As a constant traveller and with a relation working
at the franchisor he was aware of the brand name. They had done
well in the US and were looking to launch in the UK.
The situation
The franchisee did some investigations. He discovered the US franchisor
had tried once before to launch in the UK but it had been unsuccessful.
He asked why. It was explained it was a question of timing, an understanding
of the market and training. The franchisor explained that they had
learnt form these lessons and it was now the right time to begin.
Still he was
careful. He did not want to be the master franchisee because of
the financial commitment but thought that this was an opportunity
to get in on the ground floor of a potentially huge opportunity.
Not having mentioned it before, the franchisor told him that there
was already a master franchisee located in the North of England.
The franchisor was very persuasive, so combining this with the opportunity
of being one of the first in the market, he signed up quickly.
The franchise
was based on selling a household product. He received training in
the product and in selling techniques. He started well the customers
began to come. Unbeknown to him there was a small technical problem
with the product, this did not show up until 9 months into the agreement.
It was only when trying to service the customers that problems began.
The product could not be fixed, spare parts could not be found and
the master franchisee in the North turned out to be a dummy company.
Where should he turn?
The lessons
learnt
The lessons learnt were many. Mostly he had proceeded too quickly
without reviewing the agreement properly. He had taken no advice
from specialist solicitors and asked for little guidance from his
bank, he had been too keen to start quickly. The franchisor, being
US based, was difficult to tie down and the agreement relied more
on US law not allowing for his UK base.
The ending
The ending is somewhat happier. His relative in the franchisor helped
him to retrieve his investment by threatening adverse publicity
against his own employer before leaving the franchisor's employment.
Interestingly today the franchisee discussed is in a franchise with
a UK franchisor and is relatively happy if somewhat sceptical about
how successful he will be.
1.
Interview with a franchisee
2.
Busy being busy
3.
Less haste, more speed
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