franchisor.

FranchisorFranchisee Relationship

Because entering into a franchise is investing in a very real, very serious relationship, you want to make sure that you're on the road to establishing a healthy franchisor/franchisee relationship.

In an ideal franchisor/franchisee relationship, each party holds up its end of the bargain via active communication, mutual respect and common goals. As in a marriage, contracts are a necessary evil: if you have to refer back to the contract, you know your relationship has gone awry. So as to avoid pulling out the agreement, both franchisor and franchisee need to understand and honor the roles given them by the franchise agreement.

This relationship is greatly facilitated by the franchisor and the franchisee sharing a vision, maintaining professionalism, support, training and open communication. The majority of franchisor/franchisee relationships fail as a result of either the franchisee misunderstanding the franchising model or the franchisor failing to set expectations.

One of the more common mistakes is that franchisees tend to view their positions as entrepreneurial, and, while franchising does provide the opportunity for business ownership, that ownership is under the confines of an established brand name and hence under existing operating standards. Franchisees should not expect to have the creative autonomy to make changes to how business is conducted. Occasionally franchisors mistakenly view franchisees as customers rather than as partners with a common goal – namely, brand loyalty.

To avoid these kinds of pitfalls, franchisees and franchisors should ask the right questions to each other at the outset. For instance, franchisors should ask franchisees about their desire and ability to conform to the franchisor's business model/operating system, and franchisees should review the franchisor's finances and business plan as well as discuss satisfaction levels with current and former franchisees.

Author:.

Sebastien Page is Director of Marketing for WorldFranchising.com, the most comprehensive information resource for potential franchise buyers. The company also publishes franchise best sellers such as Bond's Franchise Guide, and Top 100 Franchises Guide. Before joining WorldFranchising.com, Page was Marketing Manager for Franchise.com where he successfully led the Marketing Department. Sebastien Page is ver...

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