|
|
Like this article? PLEASE +1 it! |
|
How Do You Survive Franchisor Bankruptcy
Written by: Sebastien PageArticle Overview: It takes immense discipline and fortitude to survive a franchisor's bankruptcy. It's a good idea to have a plan to minimize any potential losses in revenue and reputation, just in case such an unfortunate circumstance arises. When armed with a plan, you're more likely to avoid disaster and consequently keep your business afloat.
![]() |
Free Download - Is it Ethical for a Franchiser to Sell his Concept as a Franchise? By Sebastien Page |
How Do You Survive Franchisor Bankruptcy
It takes immense discipline and fortitude to survive a franchisor's bankruptcy. It's a good idea to have a plan to minimize any potential losses in revenue and reputation, just in case such an unfortunate circumstance arises. When armed with a plan, you're more likely to avoid disaster and consequently keep your business afloat.
The following are tips designed to help you get through franchisor bankruptcy:
- Heed warning signs: Hear a rumor? Investigate it. You do not want to find out the hard way – i.e., through a third party like a customer or the paper – that the franchisor is bankrupt, since doing so can compromise your rights and interests. If someone murmurs “bankruptcy,” be on the alert. The worst case scenario is that you determine that the rumor is no more than a rumor, and business resumes as usual. Some signs are very subtle, so pay attention. For example, if your franchisor is collecting advertising money from you but you don't see any advertising happening, be on guard.
- Have a crisis communication plan: Make sure you have a public relations campaign that includes a crisis communication strategy – preferably, a strategy that includes several contingencies. For instance, if your franchisor goes bankrupt, the media and customers will be wondering if the business is in jeopardy. You want to be able to craft a quick response.
- Be sure to stay in touch with the local media: True, newspapers and media generally go straight to corporate headquarters for information – but don't let that deter you from establishing your own relationships with writers, reporters, producers, and news directors. This way, you'll be in a better position to field inquiries should disaster strike.
- Keep a list of alternative suppliers: Occasionally the initial problems occur with suppliers who may be nervous about getting paid. Moreover, if the franchisor can't provide supplies, a franchise must look elsewhere. Develop a list of viable and trustworthy suppliers to prepare for a possible distributer catastrophe situation.
- Maintain a stash of supplies: Your franchisor declaring bankruptcy could very well leave you with an inadequate amount of supplies. By keeping a surplus of items you may need, you can avoid this scenario.
- Ensure that the community is aware that you're independently owned: While you don't necessarily need to regularly remind your customers that you're independently owned, you do need to establish your business as a separate entity from all the other franchises. This can be accomplished by either letting fellow business owners know or becoming involved in the community. You want your business to feel as “local” as possible, because customers tend to favor locally owned businesses over nationally owned ones.
- Get the support of fellow franchisees: Moral support from your colleagues – even if they're also your competitors – never hurts. In fact, helping out your fellow franchisees in times of need could ultimately mean the difference between success and failure. If the distance between you and other franchisees isn't too great, you may be able to share supplies, which would help everyone.
- Consult a lawyer specializing in franchising: Consulting an attorney who has expertise in franchising could end up being invaluable in the case that your franchisor goes bankrupt. The time and money you put into hiring an expert is, simply stated, an investment in your future. A lawyer can educate you about your rights and help you concoct the right business plan for your business. You owe yourself this and more as a business owner.
Article Tags: bankruptcy, communication strategy, contingencies, corporate headquarters, crisis communication plan, discipline, fortitude, franchise, franchisor, heed, initial problems, jeopardy, local media, news directors, producers, public relations campaign, quick response, unfortunate circumstance, warning signs, worst case scenario
|
About the Author: Sebastien Page RSS for Sebastien's articles - Visit Sebastien's website Sebastien Page is Director of Marketing for WorldFranchising.com, the most comprehensive information resource for potential franchise buyers. The company also publishes franchise best sellers such as Bond's Franchise Guide, and Top 100 Franchises Guide. Before joining WorldFranchising.com, Page was Marketing Manager for Franchise.com where he successfully led the Marketing Department. Sebastien Page is very active in the franchise community and he often writes about franchising, sales and marketing. Click here to visit Sebastien's website Government Regulation of Franchises Finding a Franchise The Top 7 reasons why Franchising is Better than a Brand New Business Getting the Best Out of Your Franchise Agreement Franchise Agreement Key Provisions |
Related Forum Posts
Share this article with your friends. Fund someone's dream.
Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.
Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!
Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.



