So you’ve chosen a franchise because it’s a successful business model, and you’ve picked a good brand so money is rolling in. You’re happy, and then the unimaginable happens. You’re in an accident leaving you seriously injured or paralysed, or even worse, you don’t make it.
Yes, franchising provides a certain degree of security and support, but you can never be sure of what lies around the next corner. This is why succession planning for any eventuality – though uncomfortable – is a very important issue to be addressed.
Accidents don’t discriminate
Whether you’re an independent business owner or a franchisee, Nicolene Schoeman, founder of Schoeman Attorneys and attorney of the High Court of South Africa discusses elements of continuity planning that you should know.
“Continuity or succession planning is something that affects every business. The concept of a franchise is the replication of an existing business model or idea and therefore does not deter from the normal provisions regarding succession planning. In doing succession planning however, the provisions of the franchise agreement or any restrictions placed on the franchisee in terms thereof, should be observed and measures implemented.”
Simply put, if a franchisee falls ill, is injured, becomes disabled or dies, just like any other business the business can’t continue to function effectively without proper succession planning strategies being put in place. The risk of not doing so could cost the business.
“Franchisees are therefore urged to think carefully who the replacement person will be and how that person will fill the roles required in such an unfortunate circumstance,” Schoeman advises.
What to think about
For successful continuity planning, firstly it mustn’t be put off. Secondly, is meeting the needs of your family and ensuring the sustainability of the business. In cases where a family member is decided as the successor, make sure that it’s something they want, and are prepared to take on the responsibility. You need only look at history to see how boy kings have worked out.
Trust is therefore a key factor in succession planning as much as a willingness to step up to the plate in the case of death or incapacitation. In the case where the successor is not part of the family, ensure that your family will not be left high and dry. This includes systems in place to manage debt.
The dangers of ostrich syndrome
While many people would prefer to stick their head in the sand and avoid an uncomfortable conversation, successful succession planning should not be put off, full stop.
No one ever anticipates a tragedy, and in the event of a crisis, costly mistakes can be made as a result of not thinking clearly. And since being accepted as a franchisee is based on one’s adherence to operations and alignment with brand values as much as business skills, it may not be as simple as nominating someone to continue the business in your absence.
A franchisee should read the franchise agreement carefully and consult a lawyer specialising in continuity planning to get you affairs in order and help secure your family and your business’s future in the event that your worst case scenario becomes an unfortunate reality.