The Globe and Mail, on July 29th, published this article about how the Bell Mobility division of Bell is getting sued by its independent dealers.
In short, the Franchisees are suing their Franchisor for squashing their profits and looking out only for their own interests at the expense of the front line troops – the Franchisees.
This is another example of the potentially very challenging relationship a company must face if it chooses the franchise business model. The motives, agendas, and heart of the Franchisor *must* be like a parent shepherding their flock of less experienced sheep towards a mutually profitable enterprise. Once it is known (or suspected) that the Franchisor’s main goal is to take as much as possible from their flock and give back little, the relationship will be short-lived and it will be just the blink of an eye before court documents are filed. Should one be surprised? Divorce rates are well over 50% and there is much more than money to be lost in a divorce.
It must be noted that not all franchises are being sued. In fact, we have had Franchisees of a few select coffee franchises claim boldly that they are a) making money and b) satisfied with their Franchisor. So, it is absolutely possible to have a synergistic and win-win relationship with the Franchisor. However, when trust is breached as in the case of Bell, and if swift and serious action is not taken to repair the breach then all roads lead to the courthouse.
This is serious business, rest assured.
Sometimes Franchisors lose touch with their roots. They don’t spend enough time in the field getting to know the customers and Franchisees personally. They don’t know that everything is falling to pieces when a simple, transparent and humble chat would have revealed all. Perhaps the Franchisor would have to consider some compensation for past errors. Perhaps all it would take would be a grave apology letter or speech from the Directors. Unfortunately, the impression that many Franchisees get from their ‘shepherd’, as they suffer significant financial hardship, is that they are nothing more than mechanical cogwheels in their money-making machine, held in place by nasty and sometimes abusive contracts.
The Canadian – specifically the British Columbia – franchise world will, in the near future, see the collapse end of bad Franchise ’empires’ as associations like the VCSFA are able to help prepare potential buyers for their investment. We hope that Franchisors who are serious about maintaining a positive brand and all the goodwill their created in the eyes of their customers, will hear the voices of their front-line soldiers and take strong action.