| It takes immense discipline and fortitude to survive a | | | | nervous about getting paid. Moreover, if the franchisor |
| franchisor's bankruptcy. It's a good idea to have a plan | | | | can't provide supplies, a franchise must look elsewhere. |
| to minimize any potential losses in revenue and | | | | Develop a list of viable and trustworthy suppliers to |
| reputation, just in case such an unfortunate | | | | prepare for a possible distributer catastrophe situation. |
| circumstance arises. When armed with a plan, you're | | | | - Maintain a stash of supplies: Your franchisor declaring |
| more likely to avoid disaster and consequently keep | | | | bankruptcy could very well leave you with an |
| your business afloat. | | | | inadequate amount of supplies. By keeping a surplus of |
| The following are tips designed to help you get through | | | | items you may need, you can avoid this scenario. |
| franchisor bankruptcy: | | | | - Ensure that the community is aware that you're |
| - Heed warning signs: Hear a rumor? Investigate it. You | | | | independently owned: While you don't necessarily need |
| do not want to find out the hard way - i.e., through a | | | | to regularly remind your customers that you're |
| third party like a customer or the paper - that the | | | | independently owned, you do need to establish your |
| franchisor is bankrupt, since doing so can compromise | | | | business as a separate entity from all the other |
| your rights and interests. If someone murmurs | | | | franchises. This can be accomplished by either letting |
| "bankruptcy," be on the alert. The worst case scenario | | | | fellow business owners know or becoming involved in |
| is that you determine that the rumor is no more than a | | | | the community. You want your business to feel as |
| rumor, and business resumes as usual. Some signs are | | | | "local" as possible, because customers tend to favor |
| very subtle, so pay attention. For example, if your | | | | locally owned businesses over nationally owned ones. |
| franchisor is collecting advertising money from you but | | | | - Get the support of fellow franchisees: Moral support |
| you don't see any advertising happening, be on guard. | | | | from your colleagues - even if they're also your |
| - Have a crisis communication plan: Make sure you | | | | competitors - never hurts. In fact, helping out your |
| have a public relations campaign that includes a crisis | | | | fellow franchisees in times of need could ultimately |
| communication strategy - preferably, a strategy that | | | | mean the difference between success and failure. If |
| includes several contingencies. For instance, if your | | | | the distance between you and other franchisees isn't |
| franchisor goes bankrupt, the media and customers will | | | | too great, you may be able to share supplies, which |
| be wondering if the business is in jeopardy. You want | | | | would help everyone. |
| to be able to craft a quick response. | | | | - Consult a lawyer specializing in franchising: Consulting |
| - Be sure to stay in touch with the local media: True, | | | | an attorney who has expertise in franchising could end |
| newspapers and media generally go straight to | | | | up being invaluable in the case that your franchisor |
| corporate headquarters for information - but don't let | | | | goes bankrupt. The time and money you put into hiring |
| that deter you from establishing your own relationships | | | | an expert is, simply stated, an investment in your |
| with writers, reporters, producers, and news directors. | | | | future. A lawyer can educate you about your rights |
| This way, you'll be in a better position to field inquiries | | | | and help you concoct the right business plan for your |
| should disaster strike. | | | | business. You owe yourself this and more as a |
| - Keep a list of alternative suppliers: Occasionally the | | | | business owner. |
| initial problems occur with suppliers who may be | | | | |