Franchisee noncompliance can affect brand integrity and even the financial viability of your entire franchise system.
Consumers expect an identical experience at every franchised outlet, and if one of your franchisees isn’t adhering to your operational rules, procedures and policies — as outlined in the franchise agreement — consistency can go out the window. And without uniformity among franchisees, the overall success of your business could be at risk.
Issues with franchisee noncompliance occur more often than many franchisors expect. So if you notice a violation, what should you do?
Here’s how our expert franchise lawyers recommend approaching the problem.
Review the Franchise Agreement with the Franchisee
In some cases, franchisee noncompliance is due to a simple misunderstanding.
Franchise agreements are legal documents, and we all know how legalese can be difficult for anyone without a law degree to read and comprehend. For that reason, a franchisee who isn’t complying with one of the terms or conditions might not even be aware that they’re in violation.
Before contacting your franchise lawyer, speak to your franchisee. Go over the franchise agreement and explain how they’re failing to meet their obligations. Notifying the franchisee of their noncompliance may be enough to remedy the situation.
Give the Franchisee an Informal Warning
If you’ve made your franchisee aware of their noncompliance and they persist in violating the franchise agreement, issue an informal warning.
Holding off on taking formal legal action can help you maintain a good relationship, and putting the franchisee on notice may compel them to correct their defaults. Or this could allow you to learn that some unforeseen difficulty is preventing them from meeting their contractual obligations. If so, you might be able to work together to solve the problem.
Contact Your Franchise Lawyer
If your franchisee ignores your informal warning, contact your franchise lawyer for advice on how to handle the conflict.
Franchisee noncompliance can be dealt with in a number of ways, and several important legal issues need to be taken into account when deciding on an appropriate course of action. Your franchise lawyer will be able to give you expert advice on whether to declare a default, seek a preliminary injunction, terminate the franchise agreement or take another legal approach.
If you’re in need of advice from a franchise lawyer with a wealth of expertise in protecting the legal interests of franchisors, turn to the award-winning professional team at the Franchise & Business Law Group.
As the leading franchising and business law authority in Utah, the Franchise & Business Law Group has decades of experience helping franchisors achieve success. Our client-centered, forward-thinking legal advice can help you get past any bumps you face on the road to business expansion throughout the state, across the country and around the world.
For more information on the Franchise & Business Law Group or to learn about options for dealing with franchisee noncompliance, contact our Salt Lake City office and schedule a franchise lawyer consultation today.