How a Franchise Agreement and a Franchise Disclosure Document differ
There are two documents that are of vital importance...
No matter which Canadian franchise you are considering, you might see complaints from franchisees about them. Things happen. Sometimes, the franchisor has made the wrong moves; other times, the franchisee is really at fault. Regardless, before you decide to join a brand, you should try to see how they handle their franchisee complaints. After all, one day, you might find yourself in a situation that merits a complaint to the franchisor, and you will not want to be left without a real resolution.
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Examine the complaints first
As you review franchisee complaints about a franchisor - which you should be able to locate online at various sources, including brand review websites and franchisee groups and forums - consider a few key factors: the franchisee's tone, the nature of the complaint and the context. Does the franchisee sound angry about things the franchisor is not able to control, such as foot traffic to their location? Do you feel the merits of the complaint are justified? Are there special circumstances that might have had an impact on the nature of the complaint?
Once you've reviewed complaints, you can focus on the ones that seem the most valid and set them aside for further research.
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Search for the franchisor's response
You might be able to find out how a franchisor responded simply by searching the franchisee's name, the franchisee's location or elements of the complaint. Very public disputes or issues may be very easy to find, while other matters may require more digging. Some franchisors do use confidentiality agreements, which may make complaints anonymous, but you still might be able to identify some elements of the complaint by reading between the lines.
Once you've determined how the franchisor responded, consider whether you would be satisfied with that response if you were the one who filed the complaint. Ideally, you want to see the franchisor attempt to address the franchisee's concerns--and not ignore them or simply threaten legal action--even if it meant offering additional information as to why the franchisor decide to take an action that prompted the complaint.
Keep in mind that you may not always see the franchisor simply doing what the franchisee is requesting. It really depends on what the franchisee wanted and why that may or may not be possible. What you are looking for is a franchisor who was responsive to the complaint and offered the resolution or information necessary to the franchisee to try to resolve it.
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