In turn, the franchisor displays the benefits of associating with the system. After the recruiting, consultation and due diligence process ends, franchisors and franchisees who believe they have a fit execute a franchise agreement. Like courtship itself, however, the recruiting, consultation and due diligence period more often than not show a particular candidate why it is not right for a particular franchise system, or vice versa, and an agreement does not result. After a franchise agreement is executed, a newlywed period often ensues between the franchisor and the franchisee. During this stage, the franchisee is often dependent upon its franchisor and the system.
Most franchisees follow the direction and advice offered by their franchisors.
Few questions are raised by the franchisee regarding the vitality or relative merit of the system and, in kind, few questions are raised by the franchisor regarding the operational skill or commitment of the franchisee. As time goes by and the franchise relationship matures, the parties may recognize certain perceived faults and shortcomings in each other's operations and approach to business issues. Often times, disputes arise. The disputes that arise can take many forms, but tend to follow some similar patterns. Franchisors often find fault in a franchisee's poor site selection, inadequate capitalization, failure to reinvest in the brand and physical plant, poor operational skills, inadequate financial controls, and failure to follow system standards.