My Story

Following a very successful career in the energy industry, like so many others who have joined a franchise, I used a redundancy payment to fund the purchase of a franchise that I thought would take me through to full retirement.

The franchise I invested in was with Dream Doors, a company that focuses on kitchen makeovers. I believed that the Dream Doors franchise fitted my interests and experiences well. However, before agreeing to enter the franchise I did my own due diligence about the company and other franchisees in widely available public domains like the internet and social media. My research found little or no negative publicity about franchising generally or Dream Doors on any social media platform which I found very strange at the time, I did question it in my own mind, but decided to take it on face value.

“In addition, [Person A] will commence training for new franchisees during May, which will limit [Person A]’s availability to be on hand and as you know [Person A] undertakes all our showroom designs.  Given the current status, I have advised [Person A] to pause all design work and layout work/discussions until you have a signed lease in hand”

None of my other fellow franchisees, that I started with, had such a condition imposed on them and one of the franchisees, who has since terminated their franchise agreement early, didn’t even have a signed lease when they opened their showroom.

Despite employing a project manager to manage my showroom fit-out and numerous attempts to get the necessary support to progress the showroom, the franchisor continuously turned my requests down. After one such request to the MD for input, the MD responded;

“as you know, [Person A] will be on holiday for 2 weeks as of this Friday. As I mentioned to you on 23 April [Person A] also has a number of other showroom openings to attend to”

“please note that I won’t be discussing anything to do with the Showroom, its condition, the design, timescales or the lease. I refer to [Managing Director]’s earlier emails”

I found it hard to believe that Dream Doors were expecting me, someone who had never previously seen a commercial lease, to make a 10 year commitment on a building along with the cost of fitting out the showroom, without even confirming to me that the lease was suitable to operate the business according to their business model.

Normal practice in Dream Doors is that all of these activities take place in parallel but with the introduction of the condition of the ‘signed lease in hand’, this was not possible in my situation.

On the back of the advice I received from my Dream Doors Business Development Manager (Person A – who also happened to be the person responsible for showroom development), I requested an extension to the showroom opening date, not just once but on several occasions, and on each occasion it was turned down by the MD. This was despite being told by my Business Development Manager that other franchisees had previously been granted extensions. I also tried to leverage the force majeure clause in the Franchise Agreement but the MD also declined this. In the end, because there was a risk that I would not meet the agreed showroom opening deadline, the MD resorted to threatening legal letters.

The requirement to open a showroom by a certain date was considered a ‘Substantial Term’ in the franchise agreement which meant that, if it was breached, the Franchisor was entitled to terminate the Franchise Agreement with immediate effect at anytime during the term of the franchise agreement and also to prevent you from selling or assigning the franchise. The advice I received was that it would be ‘suicidal’ to proceed with the showroom, with the financial commitment that it involved, if there was any risk of not making the date. Because of this unacceptable risk and the MDs intransience regarding an extension, which was incredibly simple for the MD to solve, I felt as though I only had two options; (1) pay a very large penalty to exit the franchise early or (2) take my own litigation against the franchisor for breach of contract. After Dream Doors turned down my substantial financial offer to terminate the Franchise Agreement early I decided to take the latter course of action.

The experience that followed was incredibly stressful and costly and also a massive eye opener for me. This whole experience highlighted to me how much power the franchisor holds over its franchisees and how fragile the relationship can be. According to the MD, the removal of the support for my showroom was being done for my benefit, but one thing is certain that wasting a substantial amount of my own money and all the associated stress on this fiasco was of absolutely no benefit to me. More on this in a later blog.

I was really saddened and shocked by some of the behaviours I experienced during my time as a franchisee and more so during the litigation process that followed. The litigation process was made even more complicated, costly and stressful by a number of serious issues I encountered which I really struggled to deal with and I found very suspicious at the time, something I will cover in more detail in a later blog.

Through my own experience and after talking to other franchisees I discovered that Non-Disclosure Agreements (NDA) are common practice in the franchise industry and are being used by Franchisors to silence franchisees and prevent real life experiences such as mine from being shared more widely and will likely explain why there is so little negative publicity about Franchisors in the public domain.

I also learnt the hard way the importance of culture in any franchise operation, how difficult it is to gauge prior to making your investment and how quickly it can change with either a change of ownership or change of leader, neither of which you have any control over as a franchisee.

Less than 4 years into an initial 5 year agreement and there was only 1 out of the 7 franchisees that I started with still running their franchise.  That’s 6 families that have likely gone through an incredibly stressful and / or financially painful experience. You won’t find any mention of these franchisees and why they have left in the franchise prospectus for Dream Doors. All of this is a far cry from the catchy strapline used in their franchisee prospectus ‘ACHIEVE THE FREEDOM YOU’VE ALWAYS DREAMED OF’. Franchisor prospectus’ focus exclusively on the potential upsides and mention little or nothing about the downsides, which are clearly very real and have proven to have a dramatic impact on countless people’s personal health and financial situation. In fact, the vast majority of articles about franchising on the internet are written by people that have a vested interest in the franchise industry, all of whom talk about franchising as if there is nothing that could ever go wrong.

After leaving my franchise with Dream Doors I did my own market research and was quickly able to glean that ‘war stories’ like mine are common place in the franchise industry but most do not make their way into the public domain. I promised myself once I came out ‘the other side’ & my complaint to the SRA about Dream Doors’ solicitors had been dealt with (it was not until June 2022, 17 months after raising my complaint that the SRA concluded their investigation), that I would capture all of the learnings from my journey, from a franchisee perspective, in the form of a blog with two main objectives in mind;

1. To start a discussion with other franchisees (of any franchise), with the purpose of sharing each other’s learnings and experiences, to help improve the transparency of information about the franchise industry.
2. To help drive up the standards of Franchising, which will be of benefit to all franchisees, current and future.

Spending time on the ‘inside’ of a franchise was a real eye opener for me and a massively different experience from what I expected. The content of the blogs will be based on this experience and learning, my own opinions after 30+ years in business and the research I have done since leaving my franchise. However, what I really want is to encourage as much discussion and debate as possible with both current and past franchisees of as many franchises as possible as this will generate an incredibly useful resource for potential franchisees to tap into. I will also be very happy to welcome ‘guest blogs’ from existing or past franchisees on topics I do not have the relevant experience on.

NB: Dream Doors was an independently owned business when I first invested in my franchise but within two months the company was bought by a large US based specialist Franchisor called Neighborly (known as  Neighbourly in the UK).

David More O’Ferrall

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