There is a lot of talk of conflict in the world at the moment, but happily franchise colleagues are far from war. A whopping 90% of profitable franchisees declare that they are satisfied with their franchisor/franchisee relationship, and this statistic is improving all the time (NatWest/bfa Franchise Survey 2012).
Here we look at the two major relationships within the franchising industry, and assess how to make sure everyone stays content.
The Frachisor/Franchisee Relationship
The whole theory of franchising is based upon this relationship being strong – neither participant can operate without the other – and the key to success is open communication. The most common reason for franchisees to be dissatisfied in their position is a lack of support from/communication with their franchisor.
Franchisors must not train and then abandon. They should be there throughout the project to offer:
• Operating and marketing support as well as additional training when necessary.
• Regular group meetings with franchisees.
• Newsletters sent around to keep everyone updated.
• An annual awards ceremony.
• A call or visit to the franchisee every week or fortnight for a chat.
All of these are beneficial tactics that will help to build up the relationship. The franchisee should have the option to make contact in many ways including via email, post, phone and even through face-to-face visits should they wish to have proper dialogue. If a franchisee sends an email, they should expect to receive a reply within one working day.
However, there is no point in having good communication if the franchisee cannot trust what it is they are reading or hearing. Honesty is essential within any relationship, and the same applies here. A franchisor needs to be truthful, reliable, and carry out any promises they make, so that the relationship stays a positive one.
Of course, a franchisee has responsibilities as well. He or she must keep the franchisor informed on what’s going on in their branch on a day-to-day basis. They must be willing to follow the rules of the franchise agreement and manage the branch according to the operations manual.
Temptations to challenge the system may arise once a franchisee feels that they have a good grasp on it, but obviously while giving their own opinion is allowed, these rules have been proven to be successful time and time again and questioning of them should be kept to a minimum. Such challenges should be carefully thought through and carried out in a mature manner. In this responsible way, individuals may contribute innovative ideas to update and improve the whole system.
For further advice on the franchisor/franchisee relationship, see how the expert Bill Hendrie from The Franchising Centre answers questions and gives tips in this interview.
The Franchisee/Franchisee Relationship
If a franchise system is to be successful, all franchisees need to be committed to each other as well as to their own subdivision of the brand. They must protect each other for the system to work as a whole. The more experienced franchisees can act as mentors, educating new ones.
This is why disputes should be avoided. Should one arise, the franchisor has the right to act as the mediator, step in and declare solutions, powered by the ultimate threat of terminating a franchise agreement. The main cause of quarrel is neighbouring franchisees arguing over territory, and this emphasises again the importance of the franchise agreement. When a franchisee and franchisor begin working together, every element of detail should be covered in the franchise agreement so that if problems arise in the future, they can be easily resolved.
We need to remember that within a franchise everyone works towards the same goals, faces the same challenges, and celebrates the same triumphs. Everybody, particularly the franchisor, needs to be passionate and genuinely care about the franchisees’ success. This way we can make sure that no relationships break down, and that no-one takes legal action against anyone else. By then it’s too late.