Business Mentor: How to handle Franchisor-Franchisee relationships

Armando Bartolome

Posted at Jan 28 2023 08:00 AM

Franchising can be the best way to expand your business. It all starts with having the right mindset and being prepared for what this journey will bring you. 

But opening your business for franchising will also open a myriad of challenges. There are several factors that you need to consider before embarking on this new adventure. As the owner of a company and now a franchisor, you will deal with more people. Some franchisors even talk personally to their prospective franchisees. 

The strength of your relationship with your franchisees is essential in the success of the business.

How can you nurture your relationship as a franchisor with your franchisees?

In a relationship, you need clear and open communication and mutual trust. This means that both the franchisor and franchisee should be able to exchange ideas for future innovations. Although franchisors limit what the franchisees can do, franchisors should also hear out any suggestions which could improve the business.
The franchisor's role does not end once the franchisees have signed the franchise agreement. It is just the start of building the relationship. Feedback from franchisees is as important to determine if the system implemented by the franchisor still applies to the existing market. 

There are several ways to keep connected with the franchisees: online, though newsletters, and meetings--all of which are essential in facilitating better communication between the franchisor and franchisee.

Franchisors are expected to provide training and support for the franchisees. The franchise business model requires a system, policies, and principles that the franchisees should follow. These should be clear from the start in the franchise agreement. Before signing, franchisees should discuss with the franchisor what is written in the contract. Clauses that may seem vague should be thoroughly discussed.
Similarly, franchisors should conduct training for the franchisees and their employees on how the business operates. The franchisee should know what aligns with how the franchise business operates.
People perform their best when their efforts are acknowledged. This also goes for franchisors—they should commend the exemplary performance of a particular franchisee. 

People who feel recognized and valued help reinforce a positive sense of self-worth. In return, the person will aim to work more efficiently. This is not just about high revenues. Having a positive attitude toward work attracts more people to the business leading to more people trusting the brand.

Franchisors should continuously monitor the progress of each franchisee. A visit to each store every now and then will allow the franchisor to determine if each franchisee is doing well, if things are not being followed under the agreement, and if there is a need to change how the franchise business operates. Remember that as times change, the business must adapt to the market's needs without changing the franchise culture.
Consistency and commitment are needed for the franchisor and franchisees to succeed. The franchise agreement should guide how the business flow should be followed and how the business should function. Any discrepancies committed by either franchisor or franchisee could make the relationship crumble. This takes us back to number one, which is building mutual trust.
Don’t listen to hearsay. Like in any relationship, this can ruin the business. Avoid jumping to conclusions if you ever hear something negative supposedly coming from someone. It is best to speak directly to each other to clear the air to strengthen the business relationship. Franchisors should not be quick to judge. Investigate before confronting a franchisee to know the truth behind an incident that needs your attention.
Disagreement between franchisors and franchisees can be prevented if they have the same vision for the business. This is why franchisors should not be in a hurry to choose a franchisee. The characteristics of a franchisee are as important in expanding the business. 

Work ethic is important in franchisees. It affects how they handle responsibilities and take their work seriously. The main reason an entrepreneur opens his business for franchise is to expand. Choosing the wrong franchisee can lead to a waste of time, effort, and resources.
The franchisor-franchisee relationship is strengthened when each one takes their responsibilities seriously. Remember that the franchisor is just half of the business and that each franchisee's performance will dictate the brand's success.

For more information, you may contact Armando "Butz" Bartolome 
by email:
FB Page: Butz Bartolome
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