The collapse of Angus & Robertson, Kleenmaid and several other insolvencies of both small and large franchisors in recent years have thrown the issue of franchisor failure into a rarely illuminated spotlight.
Franchisor failure, like death, is an uncomfortable topic that people rarely discuss publicly.
Like a sinking ship, a franchisor failure often creates a suction that drags surviving franchisees down with it, leaving only a small amount of wreckage on the surface to identify that the system ever existed (such as a vacant store, a painted-over sign, or a Google search that references an outdated website). But this flotsam associated with the tragedy of a system collapse is rarely visible years or even months after the event.
One hundred years ago, the Titanic, an â€œunsinkableâ€ passenger liner that became the greatest maritime disaster of all time, sank with its lights on and engines running. Franchisors can also sink in a similar fashion. A month after its parent company was placed into administration last year, book retail chain Angus & Robertson was still touting its virtues as a business opportunity on its website. Continue reading.