Could you ever be against free doughnuts? Maybe, if you're the owner of a Krispy Kreme franchise.
The new Krispy Kreme location in Tamarac will be giving away free doughnuts Wednesday through Friday as the brand celebrates its 75th anniversary.
Now, we do not know any inside information about this promotion. Chiefly, we do not know if the Krispy Kreme company is paying for the doughnuts that will be given away or if the franchise owner is expected to provide them. Even so, this is a good opportunity to look at the friction that sometimes develops between the owners of franchise locations and the parent company.
Owning a franchise can, in some situations, be quite lucrative, but what entrepreneurs who are looking at getting involved in a certain chain may not realize that they don't have as much control as they might think. A lot depends on the agreement between the franchisee and the parent company. For instance, some franchise owners are made to purchase new equipment so they can offer new products that the company wants to promote, even if capital outlay was not in their budget that month. Or, to return to this Krispy Kreme example, corporate headquarters could tell a franchise owner that he or she must participate in a new promotion being run, even if the franchise owner would prefer not to.
Again, these are just general examples of the tensions that commonly arise in the franchise business. It is always a good idea to have an experienced attorney whom you trust review any agreement before you sign it, and you should never feel shy about asking a lot of questions. You need to fully explore any possible franchise arrangement and must completely understand what may be asked of you before you can make an informed decision.
Source: The South Florida Sun Sentinel, "Free doughnuts at Krispy Kreme in Tamarac," Justine Griffin, July 5, 2012
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