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3 causes of franchise disputes

On Behalf of | Aug 4, 2022 | Franchise Law |

It can be tedious and expensive to resolve a franchise dispute. While the first thing a franchisor and franchisee may do is talk out the difficulties that caused the dispute, not everyone is willing to negotiate. If a dispute isn’t resolved, then people may look to leave a franchisee agreement.

Knowing how franchise disputes arise may give you an idea of how to solve current issues and resolve future problems. Here are three major issues that lead to trouble:

1. Communication errors between franchisors and franchisees

Franchisors help provide business models to franchisees. They may also:

  • Promote a franchise
  • Recruit employees
  • Provide business strategies
  • Create a business model
  • Resource for support services
  • Manage business costs

If a franchisor fails to hold up their end of an agreement, then franchisees may struggle to support their business – resulting in a franchise dispute.

2. Failure to meet market advertising

For a business to grow, they need to market its existence and keep up with current trends to meet consumer demand. Market advertising often expects timeliness and precision to stay in the public eye. A franchisee may find it difficult to market its business, which could cause problems earning a reputation. 

3. A franchisee isn’t following guidelines

Franchises are often given guidelines that specify how exactly they are to manage and support a business. If these guidelines are met, then franchisees can expect their business to blossom – this isn’t always the case, however. Some franchisees may go off script and attempt to run a business by the seat of their pants, which may end poorly and result in franchisors reaching out to discuss difficulties. 

If you’re experiencing a franchise dispute, then you may need to know your options