When your owner changes hands

I was looking at the Franchise Chat website the other day when a piece caught my eye – the Independent had reported on the sale of the Pret a Manger business.
The …

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27th February 2008 at 10:53 am

I was looking at the Franchise Chat website the other day when a piece caught my eye – the Independent had reported on the sale of the Pret a Manger business.

The item had my attention for two reasons. First, being picky, I wondered why the franchise people were interested because Pret hires staff rather than operate franchisees, unless they misled me completely while I was researching the last edition of Guardian Books’ “Britain’s Top Employers”, which I edit (I could of course be mistaken about that, but the website doesn’t make any mention of franchises either). Mostly, though, it raised an important principle – what happens when the culture of a franchise changes an you’re stuck running part of the business?

I’ve spoken to people in this position before. One former head of a large food chain, which did operate as a franchise. He’d started running one of the restaurants in the 1970s, and when a chance had turned up to open his fourth one his funding fell through at the last minute. He called the franchise owner, said he was £20K short (at a time when you could have bought a house for that sort of money) and the man simply asked when he needed the money and how he could help. Managements came and went and the current owners would in no way have put up that sort of capital.

He felt that the current owners were missing out on the original culture of the business, which they undoubtedly were. Whether they were right to do so or not is a little beside the point; the question in my mind is what does someone do if the ethos of an organisation in which they have invested so much time and effort changes suddenly? Let’s consider if something big happened – say, if you worked for a food franchise that sourced all of its materials ethically and suddenly it decided factory farming was cheaper and there were no proven health benefits to organic food.

The answer to an employee would be simple – start looking elsewhere for work. For the branch owner in a franchise it’s different. Do you close down? Sacrifice the franchise and risk losing the customers you’ll have gained from the global brand? I’d be very interested to hear from any franchise owners who’ve had to face that.

Guy Clapperton

Guy Clapperton is a freelance journalist who specialises in small business issues and has written for the likes of The Guardian, the FT and the Daily Mirror. Guy has written about finance and franchising for SmallBizPod. http://www.guyclapperton.co.uk

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  1. Bob Stewart says:

    My franchise changed hands and I have a horror experience to share. CDI Corporation acquired Humana International and integrated it into their US based recruitment franchise; MRI Network. Take a look at the facts on http://www.cdicorp.info and form your own opinion on their ethics and business practices.

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