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Due to the Covid-19 pandemic, many franchise systems are fighting for their existence as a business No one is sure what the aftermath of the pandemic will look like. However, there will be survivors, anxious to take advantage of the new environment. Taking these actions may be the difference between those who emerge from the economic rubble and those who do not.
The Coronavirus pandemic has changed the dynamics between franchisors and franchisees, placing an inordinate strain on the business relationship. As the pandemic has gone on, the franchise relationship has become more and more frayed; with disputes arising over brand protection issues, strained and lagging supply chains, payment shortfalls, and even the reevaluation of the franchise agreement itself.
It’s not common for major franchisors to terminate franchise agreements, though it can – and does – happen. Recently, Burger King terminated franchise agreements with one of the largest franchisees in the U.S. after a video went viral of rats in one of the locations, among other circumstances. Franchisee Guillermo Perales and his company...
