Expected Outcomes

• Increased Compliance Rates - The structured communication plan encourages franchisees to resolve non-compliance issues early, reducing the need for legal action or penalties.
• Lower Risk of Uninsured Incidents - By focusing on critical compliance gaps, such as Lapsed policies, the brand minimizes its exposure to potential legal and financial risks.
• Greater Accountability and Brand Protection - Clear consequences, like fines or restricted resources, hold franchisees accountable, helping to maintain the brand's integrity and reputation

1. Define "Non-Compliance" and Prioritize Critical Cases

• Monitoring: Once franchisees have moved beyond "Not-Verified," you can use the RMS dashboard to focus on those flagged as "Non-Compliant."
• Prioritize: Start by focusing on franchisees with the most severe compliance gaps (e.g., Lowest Compliance Score, Lapsed policies or missing critical coverage)
  • Use the franchisee view and sort functions to do this

2. Multi-Tiered Communication Plan Here’s a phased approach similar to how other brands have handled non-compliance:

• Initial Communication: Automated notification from the RMS system explaining the compliance issue, with a clear action item and deadline for resolution.
  • Allow the RMS to do the heavy lifting.
  • Set a time past the expiration date, like 30 days where you get involved
  • Do the same thing for non-compliant franchisees
• Escalated Communication: A formal letter from the franchisor, explaining the potential business risks and consequences of continued non-compliance.
• Legal Communication: If the franchisee remains non-compliant, the final communication could be a letter from the franchisor’s attorney, signaling the seriousness of the issue.

Example from Other Brands:
Brands Rikor has worked with have successfully implemented this multi-communication approach. If a franchisee still does not comply after five communications, the franchisor takes further action, such as a formal legal notice from their attorney. In some cases, if this doesn’t resolve the issue, the franchisee is fined monthly until they comply with the insurance requirements.

Note: We are not attorneys and cannot provide legal advice. This case study is for reference only. Always consult legal counsel before taking punitive actions.

3. Consequences of Continued Non-Compliance

• Fines: After the final attorney communication, consider implementing a recurring fine, which could be structured monthly or quarterly, until compliance is met.
• Restricted Operations: Another possible consequence could involve operational limitations (e.g., withholding franchise resources or support) until the issue is resolved.
• Brand Reputation: Remind franchisees that continued non-compliance puts both their business and the brand's reputation at risk, which can have long-term financial consequences for everyone involved.