IntroductionTCBY has been an innovator of frozen products since the day it opened its first store in Little Rock, Arkansas, in 1981. The concept of frozen yogurt low in fat and great tasting has received an enthusiastic response from an increasingly health-conscious public. Its trendsetting new product pushed the company to the forefront of franchising and was the "first in a long line of innovative menu items that anticipated consumer preferences and continually updated the TCBY concept" (Conlin 2001, p . 133). But TCBY products are just one reason why thousands of operators have concluded that a TCBY franchise is the preferred opportunity for branded frozen products and a dynamic partner in any co-branding concept. However, TCBY faced many problems, both internal and external, during the difficult period from the late 1980s to the early 1990s, especially the problem with its franchising system. The purpose of this report is to provide a comprehensive analysis of TCBY's situation, with particular reference to its franchising system, and to identify several issues of concern of TCBY and its affiliates and how these issues have adversely affected the relationship between them. Furthermore, this report also provides three recommendations in an effort to reduce these issues and better maintain the relationship between TCBY and its affiliates and, more importantly, help TCBY increase the company's performance and achieve its strategic goals in the coming years. scanningBefore analyzing the situation of TCBY's franchising system, it is essential to find out why franchising has become such a problem in this case. This can be achieved through an environmental scan. Basically, three environments... middle of the paper... are inevitable obstacles in establishing a good channel relationship in the franchise system, however, if the senior management of TCBY will accept and implement our recommendations, hopefully this will help TCBY to survive the crisis of the early 1990s and achieve its strategic goals in the future. ReferencesBrickley, J 1996, Incentive Conflicts and Contractual Restraints: Evidence from Franchising, Journal of Law & Economics, p. 173.Conlin, E 2001, An Agency Perspective on Franchising, Journal of Financial management, p. 133.Moore, L 1997, The flight to franchising, US News and World Report. June 10, pp. 78-81. Pelton, L.E., Strutton, D. & Lumpkin, J.R. 2002, Marketing channels: a relationship management approach. McGraw-Hill Irwin: Boston, p. 387.Pride, W & Ferrell, OC 2000, Marketing Concepts and Strategies, Boston: Houghton Mifflin, p.. 103.