The Art of Solving Franchise Disputes

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A large portion of the difficulty and expense of dispute resolution is that there are pre-emergence symptoms that are not recognized and dealt with.

Financial advisors evaluate and assist in the management of financial variables. There are other kinds of variables that impact the humanities side of company performance as well as its financials. If these are taught about in school, few people get passing grades and most don't take the course.

Business degree curricula being certificate oriented and template compliant regimes such as they are, the analysis and competent management of non-arithmetic variables are beyond their scope and capability.

What is taught is that nice people do right and you are a nice person so you must be doing right all/most of the time. Since neither proposition is regularly true in most instances, troubles happen.

No amount of instruction can rule out disputes. Disputatious situations will arise no matter what. What is unfortunate is that they are not identified with sufficient anticipation and not competently managed so that their impact is negated or minimized. Dispute anticipation can't be taught. This comes only with years of actual dispute management/resolution experience that enables one to see what it was that caused the disputes to arise in the first place and in retrospect identify when a dispute began to take root.

I have spent so much time over so many years going through case files and interviewing the people involved in so many lawsuits that a sensitivity to moment of arising and methods of avoidance simply became part of my psyche. In later years I can recall conversations with client managers in which the real goal was not in the resolution of the situation but in the avoidance of blame for its having happened. This, simply put, is unnecessary.

How does one go about not having to worry about blame for difficulties?

Dispute forecasting is both art and science. It does not readily lend itself to hourly rated retention, as the passage of time during which difficulties are identified/anticipated, how best to manage them is identified through collegial consensus, and the chosen method(s) implemented make hourly rated expenses prohibitive. Mission creep and the incentive to maximize billing poison the quality of the endeavor.

In addition, the resource to provide the expertise is not usually conducive to appointment to officer or director status. The resource needs to remain outside and to be involved in doing the same things for other companies in order to maximize its usefulness. A resource with only one client quickly becomes more fearful of alienating that client than focused on confronting root causes of difficulties. The ability to move on without suffering economic dislocation is indispensable to this kind of work.

How then does one establish and carry out being someone's effective dispute avoidance/management resource?

I believe the most effective relationship in the performance of these functions is a continuous presence/availability. Now that we have such things as email and electronic file transfer, we do not need to be constantly under foot. We can be available for face to face meetings at client need or convenience, but most of this can be performed remotely.

Retention terms should be periodic but not hourly. The resource and the client can come to mutually acceptable terms per month or quarter so that mission creep and billing incentives are removed from the scene. Since this kind of work requires the establishment of trusting relationships with relevant management and open channels of communication with no increase in project cost, this longer periodic arrangement fits/works better than any other.

The alternative is what companies suffer through now. A conflict on any given situation begins to arise. It is swept under the rug for as long as possible. Eventually it grows, like Rossini's description of slander, from a whisper to cannon fire. During this period of development, memos are written, emails are sent, and angry conversations occur that are later received in evidence or memorialized in deposition testimony transcripts and dueling affidavits. When the lawyers finally get involved the situation is on fire, the expenses are horrific (including management dislocation), and in many cases the resulting damages can destroy or financially undermine a company.

This unfortunate set of circumstances is no longer necessary. People need to feel free to deal up front with negative issues without career threatening consequences. When significant disputes can be avoided through competent variable management techniques, these negative impacts can be eliminated or so mitigated that threat levels are not critical. Of course conscious, intentional misconduct is an exception that nothing can eliminate. However, vindictiveness and scofflaw behavior are rare notwithstanding all the attention they get in the newspapers and on TV.

Most folks want to play reasonably close to the rules. The more you think about this the better it sounds and the more you will want to consider this approach.


Tamerlane group's purpose is to prevent you from shooting yourself in the foot when you see a bad event threaten to develop. Our focused expertise in crisis management can prevent these situations from developing if we are called before someone makes self-humiliating public statements/files absurd lawsuits. 


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1 Comment

Richard -

In franchising avoiding emerging disputes is legendary.

In many franchise companies the person who takes an interest in resolving a dispute at an early stage is later blamed for causing the matter when things escalate.

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About this Entry

This page contains a single entry by Richard Solomon published on September 28, 2014 11:06 PM.

Do You Know How to Preserve Your Franchise System? was the previous entry in this blog.

What's New In Franchise Purchase Due Diligence? is the next entry in this blog.

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