We heard from a person recently wanting to purchase a Newsagency the business he had been hoping to purchase failed when they found the business had to stick with their franchise agreement.
The newsagency is part of a franchise which forces the business to stay with the brand. The prospective purchaser wanted to trade under another brand. Due to this the sale fell through.
This story illustrates the danger in signing five-year franchise agreements. When it comes time to sell your newsagency you want to be able to do this to the bidder you prefer. That you then have to convince them to stick with your current brand could be the barrier which kills the sale. In today’s marketplace such barriers are dangerous, they are a reason to think very carefully about locking your business, regardless of who owns it, into a franchise from which you cannot easily exit.
newsXpress has been asked to help several newsagents who have sought to leave a franchise and have been the target of legal action. When we first heard about legal action by a newsagent franchise to force people to stay in a group we did not believe it. Once we read the paperwork we knew it was real.
A newsagent / franchisor relationship is best built on results and on trust – not on legal threats. While there is a need to document the relationship, we see no reason to force someone to remain in a group if the marriage is not working.
