Franchisees and Franchisors go to war over discounting, advertising.

Marketing strategy and use of advertising funds has always been an area of heated debate between franchisors and franchisees, especially in the foodservice segment of franchising.  The recession, declining sales and a trend toward deep price discounting and product giveaways has heated the debate past the boiling point for many franchise organizations.  Some franchisees are banding together and publicly voicing their discontent, while others filing lawsuits against their own franchisors to protect their interests.

The structure of the franchisor-franchisee relationship makes conflict nearly inevitable.  Franchisors generally receive their income in the form of royalties paid as a percentage of their franchisee’s gross sales… regardless of whether those sales are generating a profit for the franchisee or not.  Franchisors can make money on a promotion that drives top-line sales even if the franchisee is losing money on every sale.  Additionally, franchisors that are publicly traded are under constant pressure to increase their revenue, not the franchisee’s profitability.

Franchisees, whose advertising contributions fuel much of the systems advertising, are constantly questioning the franchisor’s motives.  Lately, many have joined with their fellow franchisees to make their displeasure heard and to put pressure on their franchisor by any means possible.

Burger King

BURGER KING: Is BK Punishing Franchisees With Lawsuits?

BURGER KING Franchisees Sue Over $1 Cheeseburgers

Quiznos

QUIZNOS: Franchisees Lost $2.25 per Sub on Giveaway

QUIZNOS OVERVIEW & DISCUSSION

QUIZNOS Franchisee Blasts HQ’s Coupons and Discounts

Franchise Owner Claims It’s “Impossible to Make Money” With Quiznos

McDonald’s

McDONALD’S: What Franchisees Make on a $1 Burger

SUBWAY: What Do Franchisees Make on $5 Footlongs?

LITTLE CAESARS: What Franchisees Make on a $5 Pizza

unhappyzee

Recent Posts

Does the InXpress Franchise Provide “True Freedom”?

The InXpress franchise promotes itself as the “perfect working from home opportunity” that puts its franchisees…

3 weeks ago

DONUTNV Franchise Owners Selling at a Loss [UPDATED]

Last year’s hot new franchise opportunity sometimes becomes this year’s discounted resale (and, in the…

1 month ago

DONUTNV Has Exited the Franchise Fastlane [Updated]

Not long ago, the DonutNV franchise was the sizzling hot new concept, hyped by commissioned…

1 month ago

PAINT Nail Bar Franchise Complaints (Part One)

PAINT Nail Bar franchise complaints continue to stream in from current & former franchisees across…

1 month ago

PAINT NAIL BAR Franchise Disclosure Document (FDD) 2024 – Discussion Invited

The PAINT Nail Bar franchise is promoted as the “opportunity of a lifetime” by franchisors…

1 month ago

PAINT NAIL BAR Franchise: Do Franchisees Recommend the PAINT Nail Bar Franchise?

Mark & Michele Schlossberg claim the PAINT Nail Bar franchise is “the opportunity of a…

2 months ago