It is a win-win when the franchisor suggests or require that a franchisee have a succession plan. By raising issues that most franchisees do not want to confront, all parties can collaborate on a business contingency plan which benefits everyone. Although cases alleging age discrimination in franchising are rare and perhaps rising, a succession plan may avoid such claims by focusing on long-term goals and a strategy on how to achieve those goals. I strongly recommend that all franchisors require their franchisees of over two years to have succession plans, even if they are not shared completely with the franchisor, because it helps with continuity so essential to brand equity.

The succession plan need not be complicated nor does it necessarily require accountants and lawyers. A succession plan just looks at what will happen if the owner leaves by death or otherwise. It asks the question, what is the best way to a planned exit, and what happens on an unplanned exit?

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