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Maintain a good working relationship with your franchisor

Written by: Michael Hemenway

Article Overview: A stable relationship is a very important factor in the proper working of a franchise system. Both the franchisor and the franchisee are required to work hard to maintain it.

Maintain a good working relationship with your franchisor

To help a franchise system to succeed, it’s very necessary that the franchisor and the franchisee maintain a healthy relationship. People buy a franchise, because they don’t want to start a business on their own and franchising is such a field where the franchisor is there to guide them in the best possible way. But, the franchise system will work, if the relationship between the two is harmonious. So, here are some tips on how to maintain a proper working relationship between the franchisor & the franchisee:

• Regular communication is the most vital step in keeping a relationship going. It should be two-way traffic where a franchisor will always be there for the franchisee, no matter how trivial the problem is. Moreover, if a problem looks too difficult to be handled alone by the franchisee, calling the franchisor can make things easier. The vast experience of the franchisor (and the other existing franchisees in the system) ensures that someone else has already faced the same problem somewhere and has emerged wiser.
• One thing that hampers the working relationship between the franchisor and franchisee is impracticable expectations. It’s true that before actually buying a franchise, both the parties try to impress each other. They make such promises or show data that are unrealistic. But, when the franchisees actually buy a franchise, they find out that everything is not as rosy as it had been painted. The franchisor may also realize that the franchisees don’t actually have the required money to run the business. In order to avoid these things, be very clear on what is written on the franchise agreement. Having a fixed guidelines regarding what one can expect from the other will help them to go a long way when they are franchisor-franchisee.
• Similarly, mentioning clearly in the beginning what are the roles of the franchisor and the franchisee in the system is necessary. While the franchisee will do the ultimate selling/servicing to the customers, the franchisor is supposed to maintain the brand-image in such a way that the customers come back to the franchised units over and again. Here too, a well-written and examined franchise agreement will make sure that this issue never becomes a problem.
• Trust is a very big factor in the franchisee-franchisor relationship. The franchisor has to trust the franchisee on the fact that the latter can run the franchised unit to his and the brand’s best interest. The franchisor has to give its franchisees breathing space and listen to their ideas and objections before deciding on the crucial issues. On the other hand, the franchisees too have to trust the franchisor in matters of business decisions. They must remember that it was their franchisor’s acute business sense that had made the brand successful. The franchisees cannot go on objecting to every new decision and modification that the franchisor makes! They are together in a business and any squabble between them will result in poor customer services, which, in turn, will bring both of them down!

Related Articles
  Make the Most of the Franchisee/Franchisor Relationship
  Franchisee/Franchisor Relationship Requires Mutual Trust, Respect
  Qualities to Look for in a Franchisor
  Franchisors Need Four Cs When Working with Brokers
  Evaluating the franchisor

Article Tags: buying a franchise, franchise agreement, franchise system, franchisee, franchisees, franchisor, money, one thing, promises, relationship, traffic



Related Forum Posts
Re: 50 States - All Franchisees of the U.S. Government - [quote="RussellWebb":1twrc65u]Is this common knowledge in the franchise arena?[/quote:1twrc65u] This is not common knowledge in the franchise industry. I don't even see it this way. I don't think it's a franchisee/franchisor relationship at all. By definition, a franchise is the agreement between 2 legally independent parties which gives: - a person the right to market a product/service using the trademark or tradename of another business (franchisor) - the franchisee the right to market a product/servuce using the operating methids of the franchisor - the franchisee the obligation to pay the franchisor fees for these rights - the franchisor the obligation to provide rights and support to franchisees. The first 2 points don't apply to the federal/state relationship. The last 2 do.
Working With Family - To be honest with you working with family ca be a great thing or it could be disastrous. I had a great working relationship with my dad in our last business, to back it up with a disastrous working relationship with my spouse. The most valuable lesson I've learned is to always hire the best person for the job. If you feel that family member matches your strengths, and is a good fit, then by all means offer them a position. BUT BE CAREFUL... There will be tough decisions that you as the leader are going to make that just might not sit well with a family member, and may affect your personal relationship with them, so hope for the best but plan for the worst.
Re: STARBUCK - Licensing vs Joint venture - [quote="bmueller47":czemqiul]I often come here to learn something, therefore I would like to know what is the real practical difference between licensing and franchising. I might have an answer, but you are at the forefront with your knowledge.[/quote:czemqiul] Very good question. Although I am not an attorney, I will do my best to highlight what I believe are the main differences between franchising and licensing. First, here in the US, franchising is very regulated buy the Federal Trade Commission. Not anyone can franchise, you have to go through various steps. Licensing doesn't come with as much regulation. The franchisee can expect to have a very close relationship with his franchisor. In most cases, the franchisor will offer training, and on-going support. The franchisee will be able to use the franchisor's copyrights, trademarks, logo and so on. The franchisee is like the public face of the franchisor. This is I think the high value of franchising. Also, a franchise agreement will most likely define territories. The relationship between the licensee and the licensing company is much looser. In most cases, the licensee won't be able to retain the rights to trademarks, company name, etc and will have to establish his own identity in the marketplace. Licensees rarely get a protected territory which means you next door neighbor could be your competitor... Obviously, franchising is more expensive than licensing because you get a certain "safety". Again, franchising is highly regulated whereas licensing is not. There are many other differences between franchising and licensing but I think these are the main ones.
Walmart ie ASDA uk - Hi there, Quite often I ask the staff, if they like to work at ASDA? Are you happy. So far I always had a good response. I do my regular shopping there. On my next visit I will ask a cross section of people about their working relationship with their employer. I don't know, what percentage of senior staff is from Walmart, USA. I believe it is important to have an excellent working relationship with your employer. Sometimes management has a lot to answer for. Kindest Regards Beat "Unlock People's Potentials!"
Re: 40 cents per dollar is spent in a franchised business - Hey Ringo, In general terms the location itself isn't even looked at until the franchise agreement is signed and the fees are paid to the franchisor. Then and only then do they start looking for a location. This is common practice and with the plethora of commercial locations that are available right now we are seeing landlords bend over backwards on negotiations to get a good tenant. That being said, the area is what the franchisor will look at on the demographics, they won't generally put a franchise in an area just because a buyer wants it there, most times the buyers have a preconceived notion of what they consider "the right spot". The franchisor has the data to support specific demographics, so that is where the help comes into play. The due diligence items I recommend looking into prior to buying are: 1. Average Expenses. 2. Average Revenues. 3. Litigation. 4. Business model. 5. Training. 6. Existing franchisees. Most of the time once you get through those things the rest is easy to get through. You need to know how much it cost, how much you can make, what is your exposure legally, is the model right, who/how are you trained and talk to as many existing franchisees as you can. You are looking for consistency. There is absolutely no way that every single franchise owner is happy with the home office, it is just impossible. You are looking for consistency, hearing the same things in general. Numbers, support, training, advertising, marketing, ongoing training, growth, industry etc... If you don't hear consistent things, most likely the model isn't working in all markets or there is something else affecting it like industry or distribution or training.


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