Operation of a non-related business
- Joel K
Answer
Business activity outside the franchise often results in loss of attention to the Franchisor’s business, which negatively affects Franchisees.
The Regional Franchise Agreement states that Franchisors must devote their full time and attention to the regional franchise business (with the exception of acting as a Franchisee within the same Division, or operation of a self managed super fund) and must not operate, own or act as an employee, agent, director, officer or principal of any other business without prior written consent of the National Franchisor.
Such consent will only be given with the understanding that the other business activities must not interfere with the operation of the Franchisor’s business and if the Franchisor:
is 100% compliant with the Regional Franchise Agreement, this Manual and the Division Specific Manuals;
has a minimum of 75 percent Franchisee satisfaction; and
has had no reduction in Franchisee numbers for more than three months.
A Franchisor who subsequently fails in any of these areas will have the consent withdrawn immediately, and will be sent a Notice of Breach of the Regional Franchise Agreement requiring they cease involvement with the other business within 30 days.