Luke Sharrett for The New York TimesWilliam Burris, facing a “painful situation.”
Case Study
What would you do with this business?
We’ve just published a case study that profiles the bind faced by William Burris, the owner of a box-rental franchise in Washington, D.C., who learned that his franchisor had gone bankrupt.
Mr. Burris had been one of the first United States-based franchisees of Rent Your Boxes, a company founded in Australia to help people rent moving boxes without having to worry about disposing of them. After meeting the company founder at an industry trade show, he invested about $100,000 to purchase three franchise territories in 2009.
Just three months after opening shop, however, Mr. Burris and his nine fellow franchisees received an e-mail informing them that their franchisor had filed for the Australian equivalent of Chapter 7 bankruptcy. Mr. Burris, who had never received a signed copy of his franchise agreement, sprung into action by creating a new Web site and logo for a new company called Rent Our Boxes. Unfortunately, the 10 franchise owners had trouble agreeing on how to run the new company, which led Mr. Burris, who owned the intellectual property for the new company, including its Web site and trademarks, to consider going off to run the business on his own.
We asked several experts in franchising what they thought Mr. Burris should do, and you can read their comments below. Please tell us what you think. Next week, we’ll follow up with another blog post explaining what Mr. Burris decided and how it worked out.
Doug Schadle, founder and chief executive of Rhino 7, a franchise development company in Apex, N.C.: “While Mr. Burris clearly faced a painful situation, he is doing the right thing in trying to build a new company from the ashes of the old. He needs to take control because someone needs to be the chief or nothing will get done. It’s a great concept that has a lot of potential for growth. The current name benefits from strong verbal branding since the name tells you exactly what it does.”
Jim Deitz, president of Andover Franchising, a consulting firm in Atlanta: “The company needs to be aggressively investing in advertising, not cutting back. That is what a franchisor is supposed to help with. Without that help, having 10 partners who can pool resources to do that is probably better than one guy on his own. Having an existing group of business owners would also make it easier to bring on new franchisees because it makes the business look more established.”
Barry Kurtz, a franchise lawyer in Los Angeles: “Mr. Burris should aggressively try to acquire the original franchisor’s intellectual property in Australia or at least investigate who might be making any claims on it. That would help protect him down the road from any claims that his new business is infringing on any trade secrets associated with the original business. It might also be a good idea to push his new brand as another way to distance himself from the Rent Your Boxes name.”
Article source: http://feeds.nytimes.com/click.phdo?i=5ed4592fc90fb4dde42553bbddcee8ac