As a franchisor, you may find the nature of your relationship with your franchisees to be unique and even, on occasion, daunting. While you have the right and the obligation to enforce system standards, your franchisees often view themselves as an independent business (which they are) with the ability to call their own shots (which they are not). And while the relationship is contractual in nature, if you are ever forced to bring out the contract, the relationship is already in jeopardy.
The franchisor must pay particular attention to the franchisor-franchisee relationship from the very start.
The Nature of the Relationship
Time and time again, we hear people compare the franchisor-franchisee relationship to that of a marriage. Our feeling is that a marriage is exactly what the franchise relationship should not be.
When we think of marriage, we think of a joint venture relationship. Because of the relatively equal footing of the ‘partners,’ the typical joint venture starts out with a negotiation, and is often a series of ongoing negotiations.
Franchising is much more like a parent-child relationship. The franchisee, like the child, will go through a variety of growth phases during the course of their life.
When children first come on the scene, they are typically very dependent on their parents, relying on them for the education and training that will allow them to survive in this world. And as they grow older, they become less dependent, and you begin to allow them some latitude — first playing in the yard and eventually crossing the street on their own. As they get older still, they will begin to test the boundaries of their relationship, pushing a little around the edges, trying to change or influence the system that you have set for them, and perhaps breaking some of the rules. But they still live in your house, and what you say goes.
How to be a Good Parent
A franchisor needs to start by establishing the boundaries of the relationship. It is important that the franchisee understands that your first role as ‘guardian’ is to guard the system and the brand so all franchisees can continue to thrive. Thus, one of your most important roles as a franchisor is that of disciplinarian. To do that, you need to clearly communicate the rules and your intention to enforce them from the start.
At the same time, it is important to understand that, as a franchisor, discipline can no longer be meted out the way you may have when you owned all your operations yourself. If you try to give a franchisee the ‘it’s my way or the highway’ speech, you’ll quickly find yourself with alienated franchisees.
Franchisees are business owners, and as such, require you to communicate with them in a professional manner. Being firm with franchisees, as opposed to managers, also means providing them with an explanation for your various requests. Most franchisees have a key desire for their opinions to be heard. A franchisor should thus avoid making decisions in a vacuum and providing direction to franchisees without a clear explanation of why the direction is being given.
The key to being a good franchisor starts with communication. And that means more than the occasional newsletter and a visit from the field representative.
In today’s technology-centred society, it is all too tempting to rely on the Internet for all our communications. But in a franchise context, that would be a big mistake. All too often, we have seen well-intentioned emails ignite a firestorm when they are misinterpreted.
Relationships are built with dialogue, so it’s important that you encourage dialogue in every aspect of the relationship. Good franchisors are careful to create multiple venues where constructive dialogue will occur. Annual conventions, regional meetings and advertising councils all provide for this two-way communication.
The accessibility of your senior staff is also vital. I have known the senior executives of some fast-growing franchisors who will not go home for the night until they have personally returned every franchisee’s call.
One of the most important tools at a franchisor’s disposal is the franchise advisory council. As the franchisor, creating this council not only allows you to control the agenda, but also assures you a voice on it. While there are some things you may choose not to share with your franchisees, the key to a long-term sustained relationship is trust. And trust starts with openness and honesty. Get caught in a lie once, and you have destroyed that trust forever.
Lastly, to be effective, you have to genuinely care about the success of your franchisees. Good franchisee relationships start with a franchisor that is, first and foremost, committed to franchisee success.
If your franchisees do not sense your commitment, the relationship can quickly become adversarial. If, on the other hand, your franchisees see you breaking your back to help them achieve their success, there is almost nothing they won’t do for you.