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Log In / Register | Mar 18, 2018
RichardSolomon's picture


On further reflection, this appears to me to be a request for suggestions from someone who already knows he has no basis on which to claim unfair encroachment, and that if he goes hat in hand to the franchisor he will get the brush off.

First, "it was an oversite" is about the stupidest statement a franchisor can make in this situation. For that reason, it was probably not an oversight and that's not what this person was told, or, in the alternative, he was speaking with an idiot who had no appreciation of what he was dealing with. "It was an oversite" is a tacit admission that it was permitted as the product of a franchisor mistake. WRONG POSITION FROM ANY PERSPECTIVE!

No impact study will show that this should not have been permitted. Furthermore, no franchisor is going to do a cost shared impact study in which the franchisee gets to see the result before the franchisor sees it and decides that it agrees with the franchisor's position or needs to be reworked so that it does agree with the franchisor's position. You don't let a potential adversary on any issue get in on the ground floor of how you prepare your position basis materials.

Additionally, if the placement of a store near the territory border by the adjacent franchisee would be an adverse impact on this requesting person, then his placement of a store near the same border would be the same impact on the adjacent franchisee. That produces a ridiculous result because it means that no territory is what it says it is. How does one sort this out?

It is sorted out on a first come, first served basis. Although this requesting person says he planned to put his own store in that neighborhood, he does not say that he has chosen a site and applied for location approval. The adjacent territory franchisee obviously has a site and has moved to obtain approval, and the franchisor had no inkling that this person ever had any intent to place annother store near there. "I planned to put my own store there" is always the story told by the franchisee who was simply asleep at the switch on developing that part of his own territory.   That story is usually worthless.

You don't spend money on "impact studies" until you have sorted out these other factors to see wehther an impact study would even be relevant given the actual facts of the situation. It's pretty hard to show an impact on a store that doesn't exist.

Going to the franchisor for a pity reach around when you have no horses is and should be a useless trip that shouldn't be made. No franchisor who isn't a nut case will give contract ground when the facts show that there was no wrongdoing. 

Richard Solomon


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