Seven steps to successful franchise relationships
The Franchise Magazine discusses steps taken to a successful franchise relationship
1. Shared goals and values
Ultimately, the key to a successful franchise starts with the choice
of franchise itself. It is crucial that the prospective franchise owner is suited to the type of franchise he or she is investing in, and finds the right type of business to suit their personality and skill-set. That their owners buy into the franchisor’s vision, not just financially, but also from an ethical perspective, is a vital first step on the road to a good relationship.
Something that all franchisors desire from their franchise owners is long-termism. Many franchise agreements come with a minimum term, contractually guaranteeing that the new investor is in it for the long haul. But what franchisors desire most from their owners is commitment to a long-term plan for the future success of their business; someone that is prepared to put in the hours to get through any initial teething problems and remain in business long enough to drive it forward and ultimately deliver success.
Franchisors more often than not make some extremely bold claims about the success and potential of their business, and it is good for them to be ambitious. But if these bold claims are very quickly revealed to be unrealistic, or the franchisor does not follow through on their promises, then the relationship can get off to a negative start, and even be broken before it has properly begun. Franchises that promise their owners large quantities of work and clients from the start and fail to deliver are heading for unhappy new investors. Be honest about the early-days potential, and franchise owners will know what they are getting themselves into.
4. Continued Support
In a business environment, it would be foolish to suggest that financial performance is not the be-all and end-all, but chasing profits at the expense of relationships can end up having the opposite result, and end up hurting the potential for profit of a franchise.
After a new owner has stumped up the cash and got set up with equipment, premises, etc, it may be tempting for a franchisor to consider their job done, shake hands with their new owner, and turn their attentions to chasing the next potential investor.
But to return to the previous entry, honesty is everything. If a franchise owner was lured into making a large financial investment by the sweeping promises of the franchisor of ongoing support and advice, there can be no quicker way to damage a relationship than by neglecting this commitment.
While with each passing week and month, the new franchise owner’s knowledge of the business and overall ability to ‘go it alone’ increases, continued support is always needed to maximise their potential.
Be it access to additional training, promotional materials, client contact details, or technical support, the franchise owner must be given the correct tools long-term to deliver the best possible results for themselves and for the franchisor.
5. Effective Communication
Frequent, constructive dialogue between the franchise owner and their franchisor is one of the most obvious, but fundamental necessities to a successful working relationship.
Owners should expect access to senior staff from the franchising team to offer advice and assist with any issues that may arise, particularly in the early days when they may not understand the market as well as they will.
A motivated, passionate franchisor is also a real advantage: somebody who has the ideas to develop the business to the advantage of all the owners. After all, if the franchisor is not excited about their own business, then how can they expect their franchise owners to be inspired?
6. Idea Sharing
The best franchisors are ones that are prepared to listen to their franchise owners, and take on board the ideas that will ultimately make their business stronger.
Annual conferences offer an opportunity for a business’ franchise owners to compare notes about the individual performances of their franchises and exchange ideas as to improvements, providing a real creative spark.
While franchise owners do not and should not have a hand in the ultimate decision-making processes that affect the franchise model, or run the system, they should have a say in it, and feel that their opinion is worth something to the franchisor.
Early on, a new owner may appreciate rigid structure and clear boundaries. Over time, it is important for the franchisor to trust that, with the knowledge they have picked up over the years, they are able to introduce their own ideas, and be a little more flexible with the franchise model in places: of course not to diverge from it to the extent that they risk altering the perception of the brand, but where possible, and as described in the last entry, to introduce new ideas to enhance it.