Maybe you’re a restaurant operator juggling costs and customer expectations. Maybe you’re a franchisor trying to keep brand standards sharp across dozens of locations. Or maybe you’re thinking of stepping into the franchise world for the first time.
Whatever your role, one thing is clear: running a franchise takes more than passion. It takes structure. Discipline. And yes clean, organized books.
The recent story out of Toronto’s Union Station, where a franchisee claims he was locked out of his location after 13 years, is a tough reminder. While we won’t comment on the specifics of the case—there’s always more than one side there are lessons here that apply to everyone in the system.
Let’s break them down.
Franchise agreements aren’t just paperwork
They’re your rulebook, your roadmap, and in some cases, your only line of defence.
The fine print in most franchise agreements gives franchisors the right to terminate under certain conditions missed payments, failure to meet operational standards, breach of policy. That’s standard. It’s also why franchisees need to treat financial health as non-negotiable.
Falling behind on royalty payments? Not remitting HST on time? Losing track of monthly P&L reports? These aren’t just “to-dos” they’re potential triggers for contract enforcement.
Operational pressure can be a signal, not a surprise
The Union Station case includes claims of changing policies, increased demands, and unannounced shifts in expectations. Whether intentional or just poor communication, the result was the same: a franchisee caught off guard.
Here’s the tip: If things start feeling off, don’t wait. Ask questions. Document changes. Revisit your agreement with a professional. And most importantly know your numbers. When you have clear, current books, you can demonstrate compliance, push back when needed, and negotiate from a position of strength.
Cash flow is your lifeline: Treat it that way
We’ve seen it time and time again: operators so focused on sales that they miss the cracks forming under the surface. Rent payments start slipping. Vendor accounts age past 60 days. Franchise fees fall behind.
Then comes the letter.
The truth is, most franchisors don’t want to remove operators. It’s expensive, disruptive, and rarely a first resort. But if the books show red flags and the operator hasn’t been proactive that’s when things can move fast.
Staying ahead of cash flow issues isn’t just smart business. It’s protection.
For franchisors: Clarity beats conflict
On the flip side, if you’re a franchisor, these situations highlight the importance of consistent communication and measurable expectations.
Operators succeed when they understand what’s required, where they stand, and how to get support early. Surprises hurt everyone’s brand, yours included. And when financial oversight is part of the regular rhythm not just an audit response, there’s less risk, less tension, and more growth.
What this means for you
- If you’re already in a franchise system or looking to join one, here’s what we recommend:
- Stay on top of your financials – Don’t just rely on bank balances. Know your margins, track your obligations, and review your numbers monthly.
- Invest in professional help – Whether it’s bookkeeping, tax filing, or financial forecasting, the cost of expertise is far less than the cost of a termination.
- Don’t wait to ask questions – If policies are shifting or things feel unclear, speak up. A good franchisor welcomes operators who want to do things right.
- Keep clean records – Contracts, emails, notices, these matter. Especially if the relationship becomes strained.
Our take? It’s not a scandal. It’s a teachable moment.
What happened at Union Station isn’t unique or unheard of. But it’s a helpful reminder: no matter how long you’ve been operating, no one’s immune to contract terms. And when communication breaks down, your books are your best backup.
So whether you’re an operator or a franchisor, let’s take the emotion out of it, and take care of business. Strong franchise systems are built on more than just branding. They’re built on accountability, transparency, and the kind of financial hygiene that keeps doors open and partnerships strong.
Because at the end of the day, everyone wants the same thing: for good businesses to thrive.
