How to terminate a franchise agreement
Although a franchisor will give you the tools,...
As with all relationships, most conflict avoidance and resolution can be achieved by beginning with and maintaining good communication between all parties. It’s no different for the franchise industry and, in fact, because of the franchisor/franchisee relationship, is probably even more important. Being clear regarding the expectations of everyone involved will set the foundation for a more balanced relationship. It will also prevent many potential problems from developing. As the old saying goes, “An ounce of prevention is worth a pound of cure.” I think most of us have found that to be true.
Frequent and clear communication is not always as simple or easy as it sounds. Personalities, moods, perspectives and situations all contribute to the quality of the interchange.
We are often given the impression that confrontation is a negative thing. This is not true. I have found that how you confront a person or situation is really the key to successful communication:
Do not make assumptions. Just because a situation looks one way from where you’re sitting does not mean that is what’s really going on.
Always keep an open mind until you have had a chance to investigate and talk to the others involved.
Be calm and analytical when broaching the issue.
Listen to the other party and pay attention to what they say.
When it comes to Conflict avoidance and resolution, especially in the franchise world, written contracts are absolutely necessary. This may seem obvious, but ask any court judge how often she or he has had to preside over cases where contracts were never used or were, at best, ambiguous.
As we all know, contracts secure legally binding agreements. Contracts establish the expectations and requirements of the involved parties. They also give them something to refer to if future clarification is required. It is important to be very precise and explanatory in your contracts. You will find it very helpful to consult a professional and to review other existing franchise contracts when developing your own.
In the event that a difference of opinion or misunderstanding arises that cannot be resolved by a careful review of the contract by all involved parties and subsequent discussion, mediation is the next step for conflict resolution. You may not find it necessary to have a mediation process constantly in place, but there are many professional firms that perform dispute resolution. Conflict resolution done by an outside, neutral party can often prevent expensive, time-consuming litigation. It is also done privately, which is nearly always preferable to the public forum of the courts.
It is my hope that these guidelines on conflict avoidance and resolution will help you in your franchise business. Basically, you want to always stay open and cover all your bases. You can never be too thorough.