Posts Tagged ‘bankrupt’

How a Franchisee Can Help Turn Around Its Reputation and Financial Situation After Bankruptcy

Monday, June 27th, 2011

In this day and age with the economy in the state it is in many companies and individuals have had to file for bankruptcy. Below is suggestions if an individual franchisee owner has to file personal bankruptcy under chapter 7 or chapter 13 on how to get back on their feet.

Guest post by Sophie Kinsella

The Impact of a Franchisor’s Bankruptcy on A Franchisee

The immediate Impact- When a franchisor files for chapter7 or chapter 13 bankruptcy, the franchisee greatly suffers from it. From training and advertising to marketing and supply chain- every single system gets dismantled. The franchisee loses its operational assistance from the franchisor. If the franchisor had any financial obligation towards the franchisee, with bankruptcy filing this even gets dissolved. And the ultimate damage comes in the form of damaging goodwill of the franchisor and obviously of the franchisee as well. It tarnishes the image of the company and lowers the public acceptability about their service and product.

How can a franchisee get back on its feet again-?

When such news spreads among public, a franchisee should take immediate action to wipe off the rumor from the mind of its consumers. There is a common perception among people. when franchisor files bankruptcy, people get under the impression that all its franchisees have also been collapsed at the same time. However, to eradicate such impression the franchisee should contact all the media channels television, radio, news paper and need to announce that the franchisee is in a sound condition. They have to tell repetitively that the franchisee is an individual and independent business party. They are totally untouched by any of the effect of bankruptcy. This is very crucial step for a franchisee to retain its business in the midst of this turmoil. Sometimes, the rival groups of the franchisor comes on the stage and keeps on bombarding the people with such negative campaign against the bankrupt company, that it hardly becomes possible for a smaller franchisee to fight for its brand name. If you need a detailed information on Bankruptcy, then please visit this website:

Franchisee should consider it as a boon, not as a bane-

In this circumstance, a franchisee must make some quick decision to mobilize its business and save itself from any potential lose. The franchisee falls into desperate predicament, when it loses the goods and services previously supplied by the franchisor. But now the franchisee cannot stop selling the products any more. It should immediately try to get access to the original supplier of the franchisor. It has to buy directly from that source and continue its business. As the franchisor had huge purchasing capacity, it could offer low price to the franchisee. From this time the franchisee might have to purchase those goods at higher price. But the franchisee will also get a great benefit from this if it can utilize this situation as an opportunity to become an exclusive provider of those goods and services. It is actually a golden opportunity a smaller company to grow bigger and tab the extensive market of the franchisor.