Own a franchise - need advice please

[blondie4281]

I have run my own franchise for 8 years. I have always been happy with the support I have received from the master franchise and my business has been a success. However, recently an operator (near to me) resigned from his franchise and set up on his own 6 months later, appearing occasionally in the area I cover. Not ideal, and the master franchise did nothing. A short time later, a long term operator moved away and started again in a new area on her own- but commuted back to continue to visit her existing clientelle. Again, nothing was done. Now, a third operator, after a year in the franchise, resigned from her franchise, saying it was due to health reasons, but 2 days later launched her own business doing exactly the same thing, and taking all her customers with her. Unfortunately, these customers are all in my area, as I gave her a database of customers to get herself started when she launched her franchise. The master franchise again have said they are not doing anything - and I need to look to the future, not dwell on the past. I feel badly let down by their lack of support. We are all contracted to not set up in a business even remotely similar to the franchise for 18mnths after leaving. At the moment, I feel like my royalty payments are paying for new people to start up, and become my competitors!
I don't know what to do for the best. I don't want to continue to pay them royalties as I resent the fact that they are not protecting my business, or upholding their part of the contract. To leave would mean lowering myself to the level that the other operators have, and to breach my contract. I am one of the highest earning franchises they have - so it seems likely if they throw the book at anyone it will be me.
Does anyone have any words of wisdom, suggestions of where i might get some legal advice, any advice at all?

 

[Feldon]

If they are not giving you support and i am assuming that you know your business very well now after eight years could you not do like wise and set up on your own without the restrictions of a franchise and the high fees. Obviously i would seek the advice of a solicitor who is familiar with franchiees, you don't know however if maybe things are happening behind the scene with these other franchises and maybe your franchise is taking legal action against them, however if they are not i would branch out on my own and be done with them.

 

[Chris Ashdown]

I would send a registered letter to thehead office stating your displeasure that ex franchise owners are setting up without keeping to their franchise agreements, and as its effecting your own business you request action be taken to protect the franchise.

Maybe if it came from a solicitor it would bear more fruit than just a grumpy letter from a franchise owner

 

[mckellar]

could you not contact the BFA?

 

[blondie4281]

Thank you all. I sent a strongly worded letter back in October when the 3rd operator set up in my area. I immediately received calls assuring me legal action would be taken, but on Thursday last week I was told it would not be due to the expense, and I need to stop 'dwelling on the past but look to the future'.
I am inclined to set up on my own, but I'm not good with confrontation and I have previously considered the managers to be my friends. I am struggling with my loyalties although they have let me down.

Sorry what is the BFA? British franchise association? Are they there for advice?

 

[Chris Ashdown]

I think you need to see a commercial lawyer to get advice as they would seem to consider the contract non enforceable and its effecting your business, and presumably they must have a obligation to defend your area with you

As you say you have the option of going it alone but better with ammunition to fight any action they may throw at you as you seem to be the largest franchise

Maybe time to do the sums and see if they work out as a non franchise company

 

[SWGlobal]

I take it that these people have simply taken on the customers they had originally so have not impacted your business. If the franchise brand isn't strong enough to add value to the proposition and you fear these new start-ups will eat into your business then you have to wonder why you're paying a royalty for an un valued brand.
If it is valued get this across in your marketing messages to raise the value of your offering. As for taking legal action it can get very costly and all consuming. These types of clauses are often quite difficult to enforce as it can be seen as a restrictive practice.

I would focus on out marketing these others and grow your business to greater levels. If your franchisor offer you little by way of brand value and protection then maybe you should go it alone too.

 

[storage]

I was in a similar circumstance about 8 years ago. After a long battle and getting no support from my head office, I peeled the stickers of my van informed my customers that I no longer worked for that company and gave them the option to come onboard with me. To my surprise the franchisor never did anything about it. Go out on your own is my advice.