PANEL SESSIONWorking With Franchisees

What works? What doesn’t? How external lawyers help or hinder the relationship!

PRESENTED BY:Richard Solomon

Franchise Lawyer

With panellists:

Meghann RobinsonLegal Counsel

Hong-An KingAssistant Franchising Mediation Adviser

Disclaimer

DOUGH MAKERS SPECIALIST BAKERY• Frank Adamance is the sole director/shareholder of Adamance Pty Ltd• Adamance purchased the St Kilda Dough Makers franchise from another franchisee 12 months ago for $190,000.• Frank is the chief baker in the Franchise and prides himself on offering the best quality baked goods to his customers. He spends most of his time in the kitchen baking and very little time with customers or promoting his business.• Frank has noticed his costs steadily increasing from what was shown by the previous franchisee’s P&Ls.• Within 6 months of purchasing the business, the Franchisor spoke to Frank about his higher-than-average costs.• Within 9 months, the Franchisor assisted Frank with a thorough inspection of the operating costs and expressed its concern that COGS & labour were too high• Frank refuses to change his methods maintaining that he bakes the products to an exceptional standard and if he lessened his product use or reduced labour costs then he would make inferior products• The Franchisor has offered Frank re-training to help Frank improve his methods in order to achieve the system averages for COGS & labour. • Frank declined the offer to retrain.• The Franchisor is concerned with Frank’s refusal to change his operating methods and what effect this will have on Frank’s business financially and is now considering what steps it can take next.

DOUGH MAKERS P&L

QUESTIONS