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PANEL SESSION
Working With Franchisees
What works?
What doesn’t?
How external lawyers help or hinder the relationship!
PRESENTED BY:
Richard Solomon
Franchise Lawyer
With panellists:
Meghann Robinson
Hong-An King
Legal Counsel
Assistant 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