Jason Daley writes at Entrepreneur Magazine: Imagine owning a small business for 20 years, pouring all your time, money and sweat into achieving a decent cash flow and a little equity. Then imagine getting a contract in the mail stipulating that if you want to continue doing business, you must replace thousands of dollars of perfectly good equipment, adjust suppliers or prices or make a dozen other changes that could destroy your bottom line. And if you don’t sign, you more or less forfeit your life’s work.
That’s the situation the Coalition of Franchisee Associations (CFA) says veteran franchisees are increasingly facing as their agreements come up for renewal. And that’s the climate new franchisees are entering when they sign into systems where the power and control have shifted dramatically to the corporate side.everyone together to stand up for important considerations is a positive move in unifying franchisees.”
“Over the last 30 years, franchise agreements have become more onerous and one-sided,” says Jim Coen, vice chairman of the CFA and president of Dunkin’ Donuts Independent Franchise Owners. “They say nobody puts a gun to a franchisee’s head to sign these contracts, but that contract is a loaded gun. The flip side is, if you walk away or walk out, the franchise agreement makes it hard to harvest the equity you’ve built up in your business. Some of these agreements are pretty much intolerable.”
Read More at: Entrepreneur Magazine