Franchise Relationships Dictate A System’s Future

Franchise RelationshipsThe Smoother The Relationships, The Smoother The Franchise

As with any interpersonal action, emotions get in the way of franchise relationships. When they’re good we get respect, helpfulness, and success. When they’re bad we get resentment and conflict. Also, franchise litigation.

To All Franchisors: The Root of Poor Franchise Relationships is Blame

Blame is always the number one claim and justification for hard feelings. While they’ll always be litigation in franchising, there’s no need to instigate it. What does that mean?  At least two things.

First, have your own house in order. Systems and paths to profitability are obvious essentials for success. Were they in place initially? Do you have them now? If you don’t have the answers do a best practices audit.

Second, stop bringing in the wrong franchisees. Poor selections result in poor relationships. Due diligence is not just for buyers. Again, get a best practices audit to analyze your recruiting methods.

Blame is an excuse for avoiding self-examination when it’s actually a clue to do just that. Like the saying goes, insanity is repeating the same behavior and expecting different results.

Franchise Relationships have a Set Number of Participants

There are three players in franchising. They have very different levels of experience, knowledge, insight and power. The relationship is unequal and always will be.

A New Franchisee has near blind trust and hope. Their commitment is time, money, work, and dedication. Most franchisees have never owned a business and can only imagine what that life entails. Franchisors that don’t take on a parent’s role will loose. Unfortunately, so will the franchisee.

The Experienced Franchisee emerges before the end of year one in business. If the system is poor that fact has become obvious. Anger is building from writing monthly royalty checks. The royalty/benefit ratio is the heaviest hand in the relationship. Once again, find or get help finding the system issue and fix it.

The Franchisor always has visions of exponential growth. That captures the imagination of every franchisor. Franchisors love their offering, gush over it and many times extoll its virtues too much. A promise made had better be a promise kept. Shall we say again, build the system, test the system, keep the system fresh. Again, that house had better be in order.

For more about franchisor considerations read this franchise article.