Bankruptcy in the Canadian Market: Is it Really the End?

With tested success, franchisers grow to massive size and with it their buying power and brand acknowledgment. Unfortunately, this does not make the franchiser impervious to debilitating course activity lawsuits or other actions that can lead to bankruptcy.

Looking at previous cases where franchisers filed for bankruptcy security offers a look of what franchisees could deal with. Just recently, Bennigans filed for chapter 7 bankruptcy, stopping all operations and melting its assets. What followed was the closing of all corporate-owned stores and a pool of franchisees with bewildered looks on their face. Franchisees required to marketing that yes, they were still open despite their franchiser's bankruptcy. The good news is for them providers maintained their side of contracts and continued to provide shops with much needed supplies.

Another factor to consider is that although a franchiser can not pay their costs it does not suggest the business opportunity itself is not profitable. Continuing with Bennigans, following their bankruptcy, they were snapped up by Atalaya Capital Management.

The principle one can eliminate from this though is that more than nothing, some various other, more economically sound business will take over. This was true throughout 2007-08 when numerous faltering banks were gotten by others. http://www.Bluemaumau.org provides a list of numerous franchiser bankruptcies and a quick synopsis of exactly what took place later on. Noteworthy names on the list are Boston Market, 7-11, Denny's, Sizzler and Days Inn.

As you can see when franchisors go broke, it does not always mean it is the end of the road. The period right away following a declaring might create panic or confusion, but long-lasting, bankruptcy does not devitalize a franchisees capacity to survive.