Franchising is big business that contributes 16% to nominal GDP.
How big you ask, well:
* 55% of U.S. hotels are franchised,
* 84% of U.S. chain restaurants are franchised, and
* Over 8 million people are employed by a franchised establishment.
Disputes stem from a variety of alleged factors including unprofitable promotions, increased costs from approved suppliers, increased costs for mandated store upgrades and excessive franchise fees.
Covid-related impacts will only exacerbate these disputes as franchisees and franchisors navigate through a murky future.
Franchisees and executives at burger chains, hotels and fruit-basket shops used to count on chummy relations to bolster their businesses. Those days are over. Stressed by the hit to business from the coronavirus pandemic, store owners and corporate bosses at Subway, Econo Lodge and other companies are bickering publicly as never before. Companies are asking franchisees to buy equipment and adopt new safety protocols, moves they say are necessary to reassure customers during the pandemic and to grow thereafter. Franchisees are pushing back on store upgrades, promotional discounts and fees they say are excessive and undermine their profits. Some are agitating to replace executives or suing to change practices.