we don’t negotiate · synonyms with “we don’t negotiate” ... –don’t used car sell them...
TRANSCRIPT
We Don’t Negotiate Presented by
Eric Riess Attorney, CPA, Co-Founder, Board Member,
Franchise Broker Lathrop Gage
[email protected] [email protected]
Cell 618 580 1937 Work 314 613 2504
This Is The No B.S. Zone
• If you’re not open to honesty, it’s time to hit the bricks (aka, I look good in a skirt but I’m no cheerleader)
Synonyms With “We Don’t Negotiate” • We really don’t have to • We really don’t want to • We are defensive • We are belligerent • We don’t give a crap about your concerns • Our crap doesn’t smell • We don’t really know what our FDD means • We haven’t even read our FDD • We really haven’t thought it through • This deal is not going to happen
We Don’t Negotiate
• Broker’s and Franchisor’s Shared Goal
– To make sure the deal happens / to make sure the “buy” happens
–WITHOUT negotiation
We Don’t Negotiate • How do you get the candidate to not want to negotiate
even if the FDD was prepared by a lunatic (i.e., a franchise attorney / franchise “developer”) and pushed upon the candidate by an idiot (i.e., a franchisor)?
Guiding Toward NOT Negotiating • Managing the candidate’s EXPECTATIONS
– RELAX the candidate – Make sure the candidate knows WHY franchising is one sided
(hint: it’s not “just because that’s the way we do it in franchising”)
– Explain the VALID and HONEST reasons why a franchisor would not want to negotiate (see, the first 2 synonyms above / don’t gotta / don’t wanna)
– Listen to the candidate’s legitimate concerns and LEGITIMATELY ADDRESS them – Don’t USED CAR SELL them (i.e., don’t lie)
Guiding Toward NOT Negotiating • Managing the candidate’s EXPECTATIONS (Brokers)
– Take them through the FBA PROCESS
– Manage the expectation toward EXPLANATION
– Refer them to someone who ACTUALLY DOES THIS for a living
– Ask to BE INCLUDED in the process with their professional consultant
– Ask if you CAN SHARE their concerns with the franchisor
– Prepare the franchisor to give an EXPLANATION OF WHY’S AND THE WONT’S
Guiding Toward NOT Negotiating • Put YOUR TIMETABLE AFTER everyone else’s
TOWARD Negotiation • Can you spot NON-defensible provisions in an FDD?
– You can only renew for 1 renewal period
– We can change your Territory upon renewal
– We can refuse to renew you for prior breaches even if you fully and timely cure them
– We can prevent you from leaving the value of your business to your loved ones
– We can compete directly with you within your “Protected Territory” even though we control your prices, marketing, methods and own all your customer data
Spotting Non-Defensible Provisions – You have to indemnify us for our own negligence
unless the Supreme Court of the United States finds us grossly negligent
– You have to pay a renewal fee of more than $5,000
– We can change your royalties during the term
– We can terminate you for as little as 2 breaches
– We can buy you at any time for a formula price
– You have to achieve a minimum royalty that more than 1/3 of our franchisees are not achieving
Spotting Non-Defensible Provisions – You have to wholly update your franchised
business more often than every 10 years
– You have to not compete with us or any of our franchisees within a 50 mile radius of us or any of our franchisees even though your “Protected Territory” is limited to a 1 mile radius
Get OVER Yourselves
• We had the Number 1 attorney in the world prepare our FDD.
• We spent a ton of money to have a “franchise developer” prepare our FDD.
Look In The Mirror
• Be honest about what you see . . .
Other Issues Of Negotiation
• It’s illegal (it isn’t)
• If we negotiate for one we have to change for all (you don’t)
• Negotiating the same provision over and over does not create a new offering (it does)
• The State of California (you do)
• The state of the franchisee family
The Franchisee Family • If it’s good for one, offer it to the entire family
– In exchange for mutual releases – In exchange for extended terms – In exchange for more value to the system – In exchange for good will – Then use the process as the 11th synonym:
We have gone through this with our attorney and KNOW that our offering is better than our competitors’
The Modification Agreement • The parties have entered into that certain franchise agreement
of even date herewith (the “Franchise Agreement”)
• The parties wish to modify the Franchise Agreement
• Other than as expressly provided in this Agreement, the Franchise Agreement remains fully enforceable as originally drafted
• Notwithstanding anything to the contrary contained in the Franchise Agreement: (a) . . . (b) . . . (c) . . .
• Applies to renewals and replacements
• May be signed and delivered in counterparts and via electronic mail
Discussion Eric Riess
Attorney, CPA, Co-Founder, Board Member Franchise Broker
Lathrop Gage [email protected]
[email protected] Cell 618 580 1937
Work 314 613 2504