Negotiations Skills Training
With
over twenty-five years of proven industry experience, the
Negotiations
Training Institute of America is the recognized leader in
negotiations training, consulting and performance coaching. Through public open
enrollment seminars and private on-session training sessions, we
have helped leading corporations, non-profit organizations and governmental
agencies improve their ability to
negotiate
better outcomes for their constituencies.
First-time
negotiators as well as those with the greatest
competitive
drive and amount of first-hand experience and
negotiations
wisdom can benefit from our time-tested workshops. Whether focusing
on
negotiating
a contract with a vendor or jumping in to the often-stressful
car buying process to
deal
with a dealership, our courses provide useful skills, proven techniques
and various classroom role plays to help you
become
more aware of negotiations that you must face on a daily basis.
For more information on our negotiation skills training courses please
contact us.
Negotiation
Training: Negotiate With A Franchisor
There is something
about the idea of a negotiation that makes some people uncomfortable.
Maybe it is a fear of conflict or a fear of losing or looking like
a failure, but whatever the reason, many people avoid the negotiation
process whenever possible. It doesn’t have to be this way.
We have all been negotiating for at least as long as we have been
old enough to ask to borrow the car on Saturday night. If you are
one of those folks who would like to build your confidence and develop
more effective negotiation skills, we offer a wide variety of
Negotiation
Training Classes that will make anyone a winning negotiator,
no matter what your attitude or experience level may be.
For more information
or to Register for a seminar, class, or training workshop
Click
here
Find out which
franchise agreement terms may be open to negotiation.
One of the most
common myths about franchising is that prospective franchisees are
always presented with a franchise agreement on a take-it-or-leave-it
basis. But that’s far from the truth.
Yet the myth
persists partly because of attorneys and business advisors who are
more accustomed to negotiating leases and try to apply the same
rules to evaluating and
negotiating
franchise agreements. When they do that, they often discover
franchisors don’t agree to large-scale suggested changes.
Most franchisors will be unwilling to compromise on certain issues
simply to make a franchise sale. However, experienced professionals
in the franchising industry often know which contract items are
negotiable and which items are clearly off-limits to change. That’s
why franchisees should seek the advice of lawyers and consultants
experienced in franchising to help them evaluate and discuss changes
to franchise agreements with franchisors.
Of course, it’s
true that most terms in franchise agreements of well-established
franchise systems are inviolate. Those that affect the quality standards
of the system, influence how the brand is presented to the public,
allow the franchisors to protect other franchisees from poorly performing
franchise brethren, and affect system revenue or the advertising
fund shared by everyone in the system must remain consistent. After
all, those protections are exactly the benefits people seek in a
franchise.
And keep in
mind that some jurisdictions impose a barrier to negotiation, because
negotiated changes may have to be disclosed to future franchisees
in the systems’ UFOCs.
Established
franchisors may simply decide that, however important the change
is to a prospective franchisee, they would rather miss the opportunity
of a sale than negotiate anything. In this case, a franchisee’s
only option is to accept the agreement as is or seek opportunities
with the other 2,000 or more companies offering franchises.
Still, “no
change” is not and has never been an ironclad rule, even in
the most established franchise system.
So how can you
negotiate to get what you want? The first rule of franchise negotiations
is to have a professional ally experienced in franchising, one who
knows how franchising works, will steer you away from unreasonable
demands and is better equipped to effectively negotiate changes
for you.
The second rule
is to be willing to walk away from the table. You should never sign
a franchise agreement without understanding the terms in the agreement
or assessing whether you can live with terms you don’t agree
with.
The third rule
is to understand that a franchisor’s willingness to
negotiate
the terms of the franchise isn’t always a good thing—it
may actually be a danger sign. If the franchisor is willing to negotiate
with you on terms that affect the consistency or quality of the
brand, it has probably done so with others. Ideally, you want to
join a system that protects its brand, and significant changes to
the way they offer their brand to the public may affect the integrity
of the entire system. That’s not a franchise you should join.
A franchisor
may also be willing to negotiate with you to make a quick sale.
Its payroll might be right around the corner, and the company needs
your upfront payment. Joining a system so desperate for cash that
it’s willing to make changes is a recipe for disaster.
The fourth,
and arguably most important,
rule
of negotiations is to understand exactly what’s negotiable.
Terms franchisors are often willing to negotiate include:
Additional training for you and your
staff
Additional support
for your grand opening
Additional field
support, both during your initial period of operations and over
a longer term
Changes in the
size of your protected territory. In some systems that don’t
provide a protected territory, it’s even possible to negotiate
one for your location.
Changes in the
payment terms of your initial franchise fee
Changes in your
ability to transfer the location to another franchisee without incurring
the standard transfer fees
Changes to the
standard cure periods if the franchisor finds you in violation of
the agreement or standards of operation
Changes in the
franchisor’s right to buy your location if you put it up for
sale (its right of first refusal) or its right (including the amount
of the purchase price) to buy your location at the end of the franchise
relationship
Changes in your
obligation to provide personal guarantees under the franchise agreement.
Even if a corporation owns the franchise location, most franchisors
require you to personally sign a guarantee for the performance of
the franchise agreement. Some will waive this for the right franchisee.
If you’re
a conversion franchisee (an independent business owner converting
your operations to the franchise system), you may be able to negotiate
lower fees, terms on liquidating your existing inventory, conversion
deadlines for conforming to the franchisor’s computer system,
modifications to the standard décor package and even modifications
to the length or the amount of training you’re required to
go through.
A note of caution
to conversion franchisees negotiating a shorter or less comprehensive
training program: Take advantage of every minute of franchisor-provided
training and avoid relying on the way you used to do things. One
of the reasons you probably joined the franchise is that the franchisees
who were trained in your new system’s procedures outperformed
your old business and proved to be more competitive.
The list we’ve
included isn’t complete—you should rely on your franchise
advisor for recommendations about the reasonableness of the changes
you propose. If you want to acquire the rights to develop multiple
locations, for example, the franchisor may be willing to negotiate
a host of other “standard” issues. Most even expect
you to raise these issues.
You should understand,
however, that none of the changes in our list would have an impact
on the system as a whole. And when it comes to additional services
provided by the franchisor, they may even improve your performance
and therefore benefit the franchisor as well.
A final note
on negotiations: Don’t try to recast the franchise agreement
in your own image. If you want a franchise agreement whose terms
you agree with 100 percent of the time, you’ll have to start
your own franchise system and draft them yourself. The franchisor
has a macro-responsibility—that is, it has to draft agreements
protecting the entire system. But if your changes are reasonable,
most franchisors, even if they don’t usually agree to any
changes, will still let you make your case. Give it a try; the results
may surprise you.
By Michael H.
Seid
Dallas
For Negotiation
Skills Seminar information please
contact
us.
Related:
Negotiation Course
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