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Sunk Costs: beg to get back 15%
Assets sold for fraction of cost or value
Credit note system
Designed to fail as franchise investment
Forced to invest in unproven concept
Leasehold improvements
http://www.wikidfranchise.org/sunk-costs
. You need to understand these:
Opportunism
Sunk Costs
People go into marriage full of hope.
However, some relationships are not made in heaven.
See the stories of 1,000s of former franchisees here
http://www.wikidfranchise.org/the-marriage:introduction
and ownership flip
Trustee/consultant does mass terminations during protection to flip to new owner
Sunk Costs: beg to get back 15%
Assets sold for fraction of cost or value
Credit note system
Designed
http://www.wikidfranchise.org/the-marriage:divorce-court
because:
it is very hard to assess the expected returns (before you sign),
capital and labor is hard to "get out" (sunk costs), and
risks can increase very much, for many different reasons
http://www.wikidfranchise.org/start
Had high sunk costs (debt-servicing needs) from paying a high franchise fee and had paid for an expensive fit out in a major shopping centre
Had many employees
Did not have the lease in their own
http://www.wikidfranchise.org/20060306-franchisees-struggle
are used to strip investor value during relationship, Raining litigation, Social media marketing, Sunk costs: franchisee's trapped capital keeps them chained to treadmill, United States, 20100909 Food trucks2
http://www.wikidfranchise.org/20100909-food-trucks2
be better at papering-over the single greatest risk to franchisees: franchisor over-reaching (opportunism) which difficult to defend against because of sunk costs and few franchisee associations.
For many
http://www.wikidfranchise.org/20100913-five-things
, Sunk costs: franchisee's trapped capital keeps them chained to treadmill, Unilateral fines, War of attrition, United States, 20090903 Flunkin donuts
http://www.wikidfranchise.org/20090903-flunkin-donuts
legal actions, Sunk costs: franchisee's trapped capital keeps them chained to treadmill, Canada, 20090413 Franchiser swallowing
http://www.wikidfranchise.org/20090413-franchiser-swallowing
to close.
Brought to you by WikidFranchise.org
Risks: Franchisee abandons their investment, Independence, Lease controlled by franchisor, Sunk costs: franchisee's trapped capital keeps them chained
http://www.wikidfranchise.org/20011207-country-style
