2008 corporate bankruptcy filings

[mage lang="en|de|en" source="flickr"]2008 corporate bankruptcy filings[/mage]

Insolvency means bad news for all entrepreneurs, but it has a particular disappointment for independent operators who may be operating ship of a tight financial situation, have only their parents as. In just the past twelve months, several groups of franchisees have received the sting, including those for Bally Total Fitness, Restaurants and Bennigan Mrs. Fields cookie stores.

Economic downturn of the past have helped companies, their Franchise stores, according to Emily Maltby, CNNMoney.com writing, such as the unemployed savings and severance to invest in new companies, namely their stores. In the current market However, the credit crisis keeps entrepreneurs down.

"The number-one revenue driver of the franchisor is unemployment, because more people on franchising, turn something else to do with their lives, "says Mark Siebert, CEO of franchise consultants iFranchise Group." But given the credit situation, it is the Inability to franchise financing, especially the high-end Ones. "

Entrepreneurs in a franchise agreement for the payment of royalties Working parent company to use its trademark in exchange for support for the marketing, supply chain, operating procedures, and other infrastructure. These Systems can fall apart if the franchisor insolvency on. If franchise fees fall, franchisors find themselves struggling to pay their operating costs, has a problem worse, if they have problems attracting new franchisees have locations.

For the franchisee a parent does not necessarily mean bankruptcy the end of the line. Companies such as Denny's, Boston Market, Days Inn and 7-Eleven varies filed Chapter 11, and all are still viable.
"Insolvency of the franchisor is not necessarily bad for the franchise system and franchisees, "said Alisa Harrison, spokesman for the International Franchise Association." There were cases in which bankruptcy and restructuring actually a stronger network of entrepreneurs, with strong financial management at the enterprise level headquarters and stronger brand be positioned. "But first they must make it through bankruptcy.

In the best case, continue to franchisees with business as usual, with some adjustments to support the franchisees to increase donor-profit or overhead reductions. In the worst case, the franchisor may try to selectively wipe out certain transactions and net profit to increase. Franchisees generally have little input in this process.
In the case of restaurants, Bennigan's, which for href = "http://www.chapter7.com"> Chapter 7 Bankruptcy filed in July 2008 survived franchise operators during the company's shops were closed.

"A problem with Bennigan's was that too many company-owned stores. When the economy changed, the company-owned stores were no longer profitable, and they were losing money faster than the franchisees pay royalties, "says Siebert." But even if they are not profitable, it is difficult to actually lose money for a franchisee to. "

If bankruptcy changes franchisees in small business, they need the word out that they shall be open, even though its parent company, press releases downplaying the seriousness of the situation sends the-course makes it look even worse. Enduring supply problems can sometimes mean cutting out the intermediaries and works directly with manufacturers, one of the many new experiences that await the owners ahead on their own. If they are able to negotiate the dangers, there are some owners in the possession of their new independence.

I’m a financial help nut that doesn’t mind giving tough love when it’s needed. I’m all about planning and protection. You don’t always need to hit a home runs to successfully take care of your finances.

Financial protection can take many forms, including intense debt relief. I’ll help you find the right type of debt relief for you, including filing chapter 7 bankruptcy, one of the most effective ways to eliminate unsecured debt.

Professor Sandeep Dahiya discusses the the causes and consequences of the financial crisis.

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