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One of the worst problems afflicting so many of us today is that we are so very concerned with how we are perceived, so image driven, that we deprive ourselves of the benefits of our essential humanity. As none of us is perfect, striving to be perceived as defect free creates anxieties we don't really deserve. If we are really trying to do our best and are behaving in an essentially forthright manner, letting others see that we are imperfect is useful in that it confirms our humanity.
The desire to be held perfect in every way has an especially detrimental impact on the way we handle dispute resolution.
Reduced to its essence, when we make mistakes, lawyers cannot help us by pretending that we did not make a mistake. The well intentioned can save enormous litigation expenses by not allowing the lawyers to convince them that investing in large legal fees will make the mistake retroactively not happen. An even larger benefit of benign, reality based dispute resolution is that it enhances the quality of the relationship with your franchisee network. When folks can in reality, not in mere perception, come forward and receive open handed fairness in disputes they have with you, you become a very rare and valuable resource in their lives and businesses, someone they would gladly do more business with when the opportunity arises.
Lawyers have long known that the "if he gets away with this everyone will walk out on you" button drives franchisors to write big checks for legal fees. Falling into that trap can be avoided by honest franchisors who, in reality, make mistakes that can be costly, but own up, pay the price and go forward from there. Heresy, you say? Consider the following true story.
A franchisor acquires a competing chain with franchisees within the zones of many of the acquirer's own franchisees. Many of the acquirer's franchisees are miffed because their franchisor is now loyal to their competitors as well, due to the acquisition. A Franchisee of the acquired system who was not close to any acquirer group franchisee is, mistakenly allowed to move his shop into the territory of a franchisee of the acquirer group, contrary to either his franchise contract or to some company policy that is not contractual. The franchisee with the new neighbor insists upon then leaving the system and not having to comply with his post termination covenant not to compete. His rationale is that, if it is not unfair for you to put your other franchisee next to me, it cannot be unfair for me to be able to compete as an independent.
The lawyers are called in and immediately go into their 'if you let him go everyone will leave' act.
I strenuously suggest that in the isolated mistake, by an otherwise quite decent franchisor, owning up to the mistake and letting the franchisee out if he insists, would be the smartest strategy. Here are the reasons.
If a mistake was made as to one or a few franchisees, but not as to the whole chain, the whole chain will not walk out because the franchisor honestly made amends to the few who were offended. In today's world people do acquire competitors, and the difficulties in such adjustments are being worked out every day. Life goes on.
On the other hand, where an opportunistic franchisee decides to reject the contract, and the franchisor has not made a substantial mistake as to him, the contract must be enforced. As much injury can be caused by not standing up for the contract when that is what is called for.
In sum, my argument here is for reality based dispute resolution decisions. People, especially your franchisees, will have more respect when reality is the basis of your decisions than when a bad decision is made to preserve "appearances". Good folks don't have to run from reality, even when they may be wrong. They're still good folks.
Copyright 1997 - 2010 || Richard A. Solomon
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 | Licensing, Technology Transfers, |