“Ale man, ale’s the stuff to drink for fellows for whom it hurts to think” – A.E. Housman
Introduction
Back in 1840’s German Ale brewers granted right ale to certain Taverns to market their brand. Little did they know that they had just discovered a “business cloning system” which today we know as Franchising. Above quote by A.E. Housman stands true for the Ale brewers and drinkers couldn’t cash on the business idea much but in mid 1850’s an energetic entrepreneur Mr. Swinger started the first distribution franchise of his company Swinger Sewing Machine Company.
The term franchising comes from a French word meaning freedom or privilege. Since its inception, today there are various formats of franchising across the world and has now become a biggest business opportunity for those dare-devil entrepreneurs.
The big brands which had the base and infrastructure, with a vision to grow started letting out their business to small entrepreneurs but with certain restrictions to avoid the dilution of the brand or infringement in the business. With the expansion of the franchise started the rise of various issues between the parent company (franchisor) and the franchisee. An array of miscommunication, over expectance, lack of necessary support, few wrong choices here and there were some of the reasons for the relation between the franchisee and the franchisor to go awry.
This report will highlight one such case where in a wrong decision by the franchisor to open a franchisee with-out proper ground work led to the downfall of their brand and hence their business format.
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