Edit ModuleShow Tags
Edit ModuleShow Tags

Flexible Contracts are Key to Long-Term Franchise Success


“What happens is you write a contract in 1988, and then it’s 2013 and the world has changed.” That’s how Ken Walker, former CEO of Driven Brands, puts it when describing the need for flexibility in franchisor contracts.

Walker knows that sinking feeling, when your business model is out-of-date. He was CEO when his company was called Meineke Mufflers, in the 1990s, and he oversaw the transition to Meineke Car Care Centers.

The reason for the change: “If 75 percent of what you sell is mufflers and someone makes a muffler that doesn’t wear out,” you’ve got trouble, Walker says. “So look at the long-term metrics of the business model.”

Walker was one of three speakers at a recent Association for Corporate Growth meeting in Minneapolis about private equity firms investing in franchises. Gaylen Knack, attorney at Gray Plant Mooty and another speaker, agrees that flexibility has to figure into the contract.

“What rights are being granted to the individual franchisee and what rights are being retained by the franchisor?” is the key question for Knack. “That language and the reservation of rights becomes very important in offering a glimpse of what the franchisee is getting.”

What stays out of the contract is important, too. For example, the types of goods and services offered should be part of the operating manual, not the contract, so franchisors can adjust to the times, he says.


Edit Module
Edit ModuleShow Tags

Add your comment:
Edit ModuleShow Tags
Edit ModuleShow Tags
Edit ModuleShow Tags
Edit ModuleShow Tags
Edit ModuleShow Tags

Covers everything from good news to bad judgment

About This Blog

The latest news, opinions and commentary on what's happening in the franchise arena that could affect your business.

Laura MichaelsLaura Michaels is editor of Franchise Times. She can be reached at 612.767.3210, or send story ideas to lmichaels@franchisetimes.com.
Beth EwenBeth Ewen is senior editor of Franchise Times. She can be reached at 612.767.3212, or send story ideas to bewen@franchisetimes.com.
Nicholas UptonNicholas Upton is restaurants editor at Franchise Times. He can be reached at 612.767.3226, or send story ideas to nupton@franchisetimes.com.
Mary Jo LarsonMary Jo Larson is the publisher of Franchise Times Magazine and the Restaurant Finance Monitor.  You can find her on Twitter at




Atom Feed Subscribe to the Franchise Times News Feed »

Recent Posts