I met with a client recently, an executive with a deep and long history in the staffing industry; we got on the topic of growth models which led us to franchising. Since I come from a family that operated a staffing franchise, I thought I had heard all the stories there were to tell about toxic relationships between franchisor and franchisee. Apparently not.

He matched me story for story and then some. Arguments about franchise fee structures. Complaints about low margin accounts. Law suits. High margin local accounts developed by the franchisee that turn into low margin national accounts. Fights over territory. Scandals about employment practices. Computer malfunctions. Ambiguities about insurance policies. Failed software development. Confrontational audits. And the list goes on....

How common are these problems in other industries? What causes the staffing franchise relationship to stand out as so conflict ridden? I suspect a lot of the trouble comes from ambiguities about what each party brings to the table - ambiguities that only grow as the industry changes. Thoughts?

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