Franchise profitability expert and Director of Avatar Consulting, David Campbell, said in the last few months he’d seen a few of these cases.
“In the last few months a number of franchise groups have experienced this, with several franchisees in each system – not just one – bordering on bankruptcy,”
“In the good times of the past franchisees were able to draw significant earnings from the business, well above what they would normally pay a manager if they were to replace themselves, without adversely affecting operations.
“However in current conditions some franchisees cannot sustain those drawings, yet are unwilling to make adjustments. Instead they stop paying superannuation and tax to sustain the same lifestyle and wanting to save face only confess at the last minute. It’s hard to recover from that point.”
It’s anticipated these recent cases won’t be the last with the new tougher economic environment tipped to continue.
In response to the recent spike of cases, Griffith University’s Asia-Pacific Centre for Franchising Excellence has incorporated how to identify franchisee distress signals into the Franchise Field Financial Management Training.
The aim is to help field support professionals identify early warning signs.
“If you know what to look for, these situations can be avoided,” David said.
He facilitates the training in partnership with Griffith University.
The Franchise Field Financial Management Training also covers a range of essential field support skills, such as engaging franchisees on financials, using benchmarks to drive performance, trend analysis, calculating breakeven, protecting brand value, franchisee support best practices, and more.
The four-day intensive training program will next be offered on November 1-2, followed by the remaining two day workshop on December 3-4 at the Ship Inn Function Room, Griffith University South Bank Campus, Brisbane.
The four-day intensive program costs $2970 per delegate, with discounts available for 3 or more delegates. The cost includes a complimentary copy of the Centre’s Franchise Performance Metrics Report 2011 (valued at $1800).
Participants who complete the training may also apply for credit for the ‘Accounting for Managers’ course offered as part of the Graduate Certificate in Franchising.