Franchisees work independently, but are still part of a larger organization. And, expectedly, the franchisor-franchisee relationship evolves over time as franchisor knowledge is transferred to the franchisee. Therefore, it’s not enough for franchisors to just instruct franchisees how to successfully operate the business under the franchisor’s banner. Franchisors must also listen to cultivate good relationships with the franchise network to succeed long-term. The parties must cooperate to form a successful franchisee-franchisor relationship. The “top-down” approach wherein franchisors provides the brand, business knowledge & training, and the franchisees provide certain resources such as capital, management and local knowledge, is not enough. Relationships must be built. The nature and quality for building these relationships starts with TRUST!
Trust is the foundation for a strong relationship. And a strong relationship with the franchise network promotes unity. But, trust alone is not enough. As a franchisor, one must strive to continue providing value, for over time the brand’s operational knowledge is transferred and the franchisee’s dependency on the franchisor is diminished. Knowing this, forging a strong relationship with the network is not only necessary for long-term franchisee retention, it encourages participation in process improvements and innovation. Strong franchisor-franchisee relationships helps shape the culture of the entire organization, and helps to ensure that everyone is working towards the same goals and objectives vs. either party seeking an unfair advantage. This positive relationship – built on the foundation of trust – can be enhanced by the franchisor diligently pursuing the following 3 activities:
- Providing Business Expertise
- Operations: a proven, standardized, system of operations that can be effectively taught for prompt deployment and business ramp-up
- Products / Services: discuss the differentiator(s), and seek ways to promote the attributes distinguishing you from the competition
- Established vendor relations: It is expected that the franchisor will have established relationship the franchisee to engage with to start and develop the business, often times even receiving discounts.
- Initial & Ongoing Training & Coaching
- Business Operations: a business coaching team is the front line for building relationships with the franchise network. Coaches must be able to provide guidance on all aspects of the business in efforts to improve methods of operation, from core competencies to specialty functions.
- Leadership: work with franchisees on leadership styles & methods, and types of engagement
- Financial: help franchisees with business analysis, planning, projecting
- Marketing: tools, resources, and methods to inform, engage, and acquire customers
- Scheduled engagement: it is import for the franchisor-franchisee relationship to have scheduled engagement with franchisees, that are mandatory. They foster cooperation, allow for review and assistance, and provide an opportunity to exchange ideas and feelings.
- Communicating with franchisees
- Transparency: open, honest, direct
- Formal vs. informal: Franchisee must trust that they are able to seek help and disclose errors for guidance and positive operational adjustments vs. immediate formal default notice
- Positivity: Building positive relationships with franchisee – displaying and discussing EQ (emotional intelligence) – encourages a positive franchisee/employees relationship. And, a positive “employee experience” has been proven to have direct impact on the “customer experience” & satisfaction.
2. Location Sensitivity
- Market Condition: Listening to franchisees: maintain a trusting and openness to addressing franchise concerns regarding market conditions.
- Regional impact: Willingness to adjust, if necessary, products/services & marketing based on demand variances in e.g. weather, tastes, demographics, etc.
3. Market Integrity
- Good Reputation (protect it)
- Positive brand image: promoting & protecting your good name; being environmentally conscious; supporting equality
- Adhering to your core objectives: (e.g. best service, lowest price, top quality, etc.)
- Good Customer Relations
- Responsiveness to customer concerns: Quality scores affect the entire network. Promptly addressing customer concerns/complaints about organizational activities.
The franchisor franchisee relationship create a value that goes beyond money, it becomes part of the franchise culture and creates loyalty-on both sides. The relationships built are personal, and influences all facets of the franchise business, including employee and customer satisfaction. The relationships built impact how franchisees will respond and interact with the franchisor, and is the franchisee’s basis for confidence in the franchisor‘s ability to lead the organization. By building a sound franchisor franchisee relationship, and creating a culture of trust & transparency, franchisees feel more connected to the organization and are often driven in their efforts to help grow the brand.