Managing Proximity Disputes in Franchise Sales

Introduction

This comprehensive guide details the process for managing potential proximity disputes arising during the planning and development of new franchise locations. It ensures that existing franchisees are informed about new openings within a specific distance, which may vary for urban versus rural areas. The procedure facilitates a system for franchisees to either respond to or dispute new openings, while also delineating the steps for the franchisor to review these disputes, secure necessary internal approvals, and communicate decisions to all parties involved.

 

Workflow for New Franchise Location Development

  1. Development Agreement Request: Initiation of a development agreement for opening new franchise locations is tracked as an opportunity. This process is designed to accommodate franchises at any scale contemplating expansion.
  2. Site Selection Pre- and Post-Agreement Signing:
    • Pre-Agreement Signing Site Selection: In scenarios where site selection precedes the signing of the development agreement, the process allows for either the selection of sites linked to the opportunity or the creation of location records prior to finalizing the opportunity. These preliminary locations are placed in a distinct lifecycle stage, such as the real estate stage or site clearance stage, to reflect their status accurately.
    • Post-Agreement Signing Site Selection: After the development agreement is signed, the subsequent steps involve qualification, disclosure, agreement signing, and then closure of the opportunity. New location records are then created and assigned the Agreement Signed (SNO) lifecycle stage, marking the beginning of the location’s lifecycle in the system. The real estate team assigns site information for each new location.
  3. Handling Proximity Disputes:
    • Independent of when site selection occurs, once a new site is associated with an opportunity, the system assesses it against the territorial information of existing locations, raising a proximity dispute flag where applicable.
    • Automated workflows notify the legal team associated with existing franchises, providing a link to submit a proximity dispute. Concurrently, another workflow alerts the franchisor’s legal team about the activated dispute flag.
    • When a franchisee submits a dispute, the franchisor's legal team is notified. They are responsible for updating the location record with the dispute status and establishing deadlines for dispute resolution, facilitated by automatic reminder workflows
  4. Resolution and Communication:
      • The legal team receives reminders n number of days before the resolution deadline.
      • Following the dispute resolution, both existing and new franchisees are informed of the decision, ensuring transparency and fairness in the expansion process.

This structured approach ensures equitable treatment of all franchisees and efficient management of disputes, safeguarding the growth and operational integrity of the franchise network.

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