Running a franchise chain is not one of the most rewarding things to do we have over 320 Franchisees. Franchisees always complain that you are earning too much and are always trying to find ways of not paying no matter how good it is for them. On a bad day the franchisees want out because they cannot pay the fees, when times are good they want out because they want to keep all the money and start their own Franchise.
However, when things start to get tough for us we have far more to lose. If we were to seek any form of open Insolvency we are in trouble because this would cause the collapse of our business. If the franchisees were to hear that we were having problems then they would use this as the excuse to rescind their agreements. We would collapse overnight.
We first saw ias on a series of television documentaries - Michael was described as a Saint due to his continued patience with one of his clients. Knowing Michael as well as I do I can imagine when not filming he could have nearly killed that particular client. What impressed me was the way he is able to instantly assess the situation and see the route out, this not only comes with years of experience but also a natural ability.
The ias team initially caught us unaware by the amount of information wanted together with its quality and speed. I would advise you not to make any shortcuts here because you will lose out in the long run, and the advice given is based upon that information.
Our biggest problem was that we had over 200 leases, a mixture of Offices and Shops. We needed to get out of as many of these as soon as possible, current liabilities to landlords alone were in excess of £1 million. Contingent liabilities directly related to wishing to move out of some premises and having to make good those properties (dilapidations) was in the region of £15 million pounds. To add insult to injury we had recently lost a couple of Court cases and we had a liability case adding those together were another £2 million - this was the problem I gave Michael to rectify.
After 3 weeks of planning Michael’s team under the banner of ias Corporate Services put a proposal to all franchisees. It appeared and in general did offer the franchisees a better package; this was achieved because Michael investigated all their complaints and addressed the majority of them with 3 basic proposals. In return it provided a better working environment for my team and the franchisees agreed a position that they would allow another entity of our choosing to administer and take control as the Franchisor. We were now in a position whereby the company could be placed into Administration - the end result, almost overnight saved us over £20 million - long-term considerably more. The added advantage was that it provided a far better return for creditors than what they would have seen if the Liquidation route had of been taken.
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