The Importance of the Franchisor Franchisee Relationship Explained
In order for a franchise network to be successful, the franchisor and franchisee relationship must be strong. Both parties must commit to and help each other. There is simply no other way to ensure mutual profitability.
Unfortunately, breakdowns in these partnerships are all too common and can lead to legal disputes. But there are tried and tested methods to prevent this from ever happening.
Regardless of whether you’re a franchisor looking to avoid conflict with your partners or a franchisee who wants to ensure they have a good relationship with their parent company, you’ll be able to find detailed guidance on this topic below.
From not conducting thorough pre-screenings to failing to provide dedicated support, these mistakes in the franchisor and franchisee relationship can really cause breakdowns in communication and ultimately affect the business as a whole. This infographic identifies five of the most frequently made mistakes and looks at how to resolve common franchise conflicts in bite-sized, valuable nuggets.
How It Can Go Wrong
Common Franchisor Errors
You’ll find that a surprisingly large number of franchisors don’t take the time to thoroughly evaluate prospective franchisees before accepting them into their network. Needless to say, this can lead to significant issues down the line. Unqualified franchise partners will struggle to perform and this will negatively impact the franchisor-franchisee relationship.
On top of this, many franchisors don’t understand the importance of establishing a dedicated support team for their franchisees. This is essential as the network continues to grow and the number of partners significantly increases. Every single franchisee must be able to rely on their franchisor for advice, guidance and full ongoing support. If they aren’t provided with this, franchisees will inevitably become unsatisfied and consider leaving their network if the issue isn’t corrected. Why? It’s simple. They’ll feel that they don’t have the tools and resources they need to make a success of their business and they will go looking for a franchisor that can deliver what they desire.
Additionally, it’s a given that the franchisor and franchisee relationship will begin to degrade if a franchisor doesn’t show that they’re willing to continually improve. For instance, as time moves forward, a franchisee may well expect their franchisor to invest in new technology that enables greater productivity and profitability. If this doesn’t happen, and their competition gets ahead of them, the franchisee will begin to question their franchisors’ commitment.
Regular Franchisee Mistakes
You should keep in mind that franchisors look unfavourably on franchisees who don’t comply with brand guidelines. For example, if a single franchise partner decides to change the logo of their parent company and present it differently within their particular outlet, this will be inconsistent with the rest of the network. This is a problem as it reflects negatively on the brand as a whole. Plus, if the franchise partner decides to no longer follow their parent company’s established business model, they’ll only raise the chances of a legal dispute with their franchisor. Compliance with the model is almost always a stipulation in a franchise agreement.
It’s also important to realise that breakdowns in the franchise-franchisee relationship can be caused by poor work ethic. A franchisor trusts a franchisee with its branding and expects them to achieve the highest standards. If a franchisor discovers that one of their franchisees isn’t putting in the hours needed to properly market their business, for instance, they’ll begin to lose faith in that specific partner.
The Path to Improvement
To maximise the franchisor-franchisee relationship, a franchisor must show their partners that they will take on board their thoughts, comments and concerns and then use them to improve the overall network. Furthermore, the franchisor should encourage each franchisee at every opportunity in order to give them the confidence they need to succeed.
On the other hand, franchisees must also take an active part in improving the network. If feedback is requested, they must provide it honestly and clearly. They should also consider mentoring newer franchisees as well when asked by their franchisor. This will again benefit the entire franchise system and also strengthen the bond between the two parties. They’ll know that they can rely on each other.
The franchisor and franchisee relationship cannot be maintained if there isn’t sufficient communication between the two sides. This communication can be through traditional phone calls and emails or carried out with online video communications technology as well as bespoke franchise software systems. During these meetings, franchisors can provide additional training, present future product and service developments, discuss new ideas, get helpful feedback and so much more.
Wondering why this is so vital? Imagine that you’re a franchisee who’s a member of a large network. If you don’t hear from your franchisor at least every few weeks, you’ll begin to question whether they’re still committed to supporting you in the long term. And if you’re unsure of this, how can you have the motivation you need to achieve the highest standards? Therefore, it’s in a franchisor’s best interests to do everything within their power to prevent this scenario from ever occurring.
This being said, franchisors must dedicate a significant time to running their own business. It’s unreasonable to assume that they can keep in contact with all their franchisees without help. This is where professional franchise support service providers like Franchise Fame come in. Were you aware that Franchise Fame’s internal marketing and communication service was designed specifically to make it easier for franchisors to stay connected with their partners? This kind of specialist assistance has proven invaluable to many franchisors.
A key component of any good franchisor-franchisee relationship is comprehensive support. You should know that in most cases a franchisor will commit to providing ongoing assistance as part of the agreement they make with a franchisee. This help should encompass training, access to operational manuals, marketing guidance and so on. If a franchisor provides all of this readily, their franchisees will feel valued and confident that they can build their own business and achieve profitability.
Bear in mind that the best franchisors go the extra mile. This usually involves enlisting agencies such as Franchise Fame to design and then build optimised websites to raise the profiles of their partners within their local territories. The other benefit of this? It prevents franchise partners from branching out on their own and developing an online presence that could negatively impact the entire brand.
Want to understand exactly how to improve a franchisor and franchisee relationship? Reach out to Franchise Fame and get your questions answered. Of course, if you’d prefer to find out all about the many benefits of using a franchise consultant before you do so, feel free.