The franchise business will contact you by means of email and/ or telephone only to the email address and phone number you have provided.
By submitting the enquiry form you are consenting to send your personal information to the selected franchise business.
You also agree to receive further newsletter email marketing from What Franchise.
What happens if my franchise doesn’t perform as expected?
John Pratt writes:
First, you have to work out who is responsible for the poor performance because if it’s not attributable to the franchisor, a disappointed franchisee will not have a claim.
The issue of performance normally arises in the context of franchisees being given information by a franchisor to encourage them to enter into the franchise agreement.
Often, franchisors provide cash flow forecasts and projections that set out initial start-up costs and likely turnover and profitability. If those levels are not achieved, the franchisor may have done nothing wrong because projections are simply projections and not guarantees.
If, however, the projections provided were not based on the average performance of franchisees and paint far too rosy a picture of the franchise, then almost certainly they will constitute misrepresentations and would be likely to be fraudulent misrepresentations, which generally franchisors cannot protect themselves against with a provision in the franchise agreement.
In other words, if things don’t work out as well as a franchisee would hope and providing the poor performance is not attributable to them and it falls far short of the projections provided, which were not based on the average performance of franchisees, a franchisee may well have a claim against the franchisor.
John Pratt is senior partner at specialist franchise firm Hamilton Pratt and has advised franchisors for over 25 years.
You might also be interested in
Answered by Vincent Anthony
Vincent Anthony writes: The property market has wide appeal because it is relevant to everyone: we all... read more
Answered by Louise Harris
Louise Harris writes: Richness or wealth is relative. We always want more, I guess. So, what is... read more
Answered by Shelley Nadler
Shelley Nadler writes: A concern that businesses may have when deciding to franchise their business, is the... read more
Answered by Alan Wilkinson
Alan Wilkinson writes: There are two elements to consider here. First is the franchise fee itself, and... read more
Exciting Franchise Opportunities
Companies to Consider
Discussed at interview stage
From £18-20,000 per week. First year R.O.I 40%
Third party through banks
Family Law Assistance
Monthly sales of up to £8,000 based on a 37.5-hour week
Yes, via third party
35% to 40% profit, depending on the business model
I Am Döner
£10,000+VAT turnover per week, 20% EBITDA profit
BabyBeats® and Mindful Movers®
£30,000 depending on times and days worked
Get expert franchising news delivered straight to your inbox
Franchise news, advice and new opportunities delivered weekly.
Must Read Articles
Added 3 years ago | 2 min read
Added 13 hours ago | 2 min read
Added 2 days ago | 2 min read
Find your next business opportunity
Search 100s of UK franchises and become your own boss today.
What Franchise Newsletter
Keep up to date with all the industry news