Breaking up with your franchisee

Breaking Up With Your Franchisee

I recently had to break up with my franchisee.

I had felt something wasn’t right in my gut for a while, but I let things carry on longer than they should have.

Why am I telling you this? Because someday, you’ll have to make a very difficult decision yourself.

It won’t be easy, and you won’t want to deal with it.

Difficult conversations are just that; difficult. Yet they are an essential part of business life. You’re no stranger to this, but you know it doesn’t get any easier.

I put off having my difficult conversation for too long and I really wish I’d dealt with it earlier. However, the learning never stops in business, even after ten, twenty or thirty years of being in business.

You’ll know when it’s time to part ways with your franchisee because of the following:

They’re not pulling their weight

Businesses are there to make money. If the franchise isn’t profitable and you’ve done everything you can to help them, then perhaps that territory would be better off in other hands.

They’re damaging your reputation

Reputation is your currency as a franchisor. As they say in business, you’re only as strong as your weakest link, so it matters if one person is creating a negative impression.

They’re in breach of their contractual obligations

They’ve specifically broken one of the terms of your franchise agreement, and in this case, there is no coming back. You have to deal with it right away.

Here is my advice for breaking up with your franchisee in a healthy, non-toxic way that protects your business so you can hold your head high.

ONE: ALWAYS consider brand protection

Protect your brand. Your brand is your baby. You’ve worked hard to build it up and grow it, so the brand comes first, even before friends and family who work with you. If you fail to protect your brand, there is no company, or at least not one with sustainable profitability.

TWO: Start conversations early

Perhaps you didn’t get a good feeling right at the start but you quashed your inner voice because you so badly wanted to sign up this person. If they do join and this feeling doesn’t go away, or if it later transpires that they weren’t as good a fit as you thought, then you need to start having conversations early to clarify expectations.

THREE: Offer help and support

Don’t assume they don’t care or that they’re being lazy. Franchisees hit roadblocks like the rest of us. Maybe they’re struggling to manage their team, or they’re not coping with the workload. It could be that their personal life is affecting their ability to run the business. Be sympathetic and find ways to work with them so they can get back on track.

FOUR: Document all your support

Make sure you keep a record of everything you’ve done to support your franchisee so if the time comes to part ways, you can evidence you’ve stuck to your terms in the legal agreement.

FIVE: Check in with your solicitor

If you know in your heart you’ve done all you can to mentor your franchisee and they’re still not performing, or they’ve breached their contract, reread your legal document to ensure you’re holding up your end of the bargain. Then go and see your legal expert to confirm you’re correct to terminate the contract.

SIX: Have a plan in place

You need to know the next steps once the franchisee has left the company. Who will look after their customers? What happens to the staff left behind? Implement measures to make this transition as pain-free as possible for all concerned.

SEVEN: Always stay professional (things can get heated)

When you finally break up, things do get uncomfortable. This is a fact of life, so instead of dreading it, expect it. The franchisee will feel anxious and rejected and may react accordingly, but you need to be cool and level-headed – there’s no point you making the situation even more fiery. Let them say their piece and end the conversation on civil terms as far as you are able. That way, when the heat is cooled, you haven’t burnt any bridges.

EIGHT: Reassure your other franchisees

When someone leaves, it will shake up your other teams. They may feel vulnerable, as though you’re watching them next. Be transparent with them. State the reasons for the departure and remind them of the expectations. Explain what you did to avoid this situation and tell them you’ll treat franchisees with compassion if they’re struggling and come to you for help.

NINE: Tighten up your processes

Having been through this once, what can you do to make it feel smoother next time? And there will be a next time. Can you implement something earlier on to avoid losing a franchisee? Take the time to reflect before making your processes more robust and speak to your business mentor or the Mercury Franchise School Facebook Group for ideas and support.


Have you ever had a difficult breakup with a franchisee? What did you learn from it? Why not leave a post in the private Facebook Group with your experience and pearls of wisdom?

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