In franchising, the importance of the relationship between franchisor and franchisee can’t be overstated. It is the dynamic that underscores success or failure at the unit level—and as a result, impacts the viability of a franchise system as a whole. If you’re new to the industry on either side of the aisle, it’s essential to understand what these relationships entail, what both parties can (and should) expect of one another and how to get the most out of the partnership, which, if maintained properly, can lead to long-term success.
Clearly Define Responsibilities
When signing a franchise agreement to enter into a business relationship with a brand or owner, setting expectations up front is critical.
During an initial meeting with a prospective franchisee, and at the very least during discovery day, franchise brands should provide a detailed overview of what are the expectations, explicitly define the duties of both parties, and lay out what is expected of each so that the candidate has a full understanding of what the process will look like in the time gearing up to, as well as in the course of, everyday business.
Setting up clear parameters as early as possible—and constantly reiterating them throughout the discovery process—ensures there are no misconceptions about duties or communication before a candidate signs on to become a franchisee.
For both sides, understanding where responsibilities begin, and end helps hold both the franchisor and franchisees accountable. On a macro level, a franchisor’s responsibilities include establishing brand mission and messaging; installing the proper training and support systems to meet brand standards; and deploying product and service development and innovation. A franchisee’s responsibilities, on the other hand, are firmly rooted in business performance at the unit level—maintaining brand standards for profitability and upholding the integrity of the system locally.
Maintain An Open And Honest Dialogue
In order for a franchisee to succeed within a franchise system, the franchisor must provide them with the systems and processes necessary to optimally perform their role. For instance, while a brand may place the responsibility of securing real estate on its franchisees, as a franchisor, that brand is still responsible for defining a set of criteria. They must provide franchisees with the proper tools to execute, some of which may include introductions to national and local brokers to help find the right site.
The best way for franchisors and franchisees to get the most out of their relationship is through clear and concise communication. Opportunities for open and honest dialogue should be numerous and consistent, whether in the form of weekly conference calls, Franchise Advisory Council (FAC) meetings, or even at the brand’s annual conference. Brands should take every available chance to reiterate what is expected of franchisees. Through honest conversation that is collaborative, franchisors can provide the necessary support and resources to their franchisees to help them meet and exceed goals at the unit level. Likewise, franchisees should be afforded the opportunity to raise concerns and present ideas to relevant parties for the betterment of the system as a whole through established, official channels.
Live Up To The Expectations You’ve Set For Yourself
Open and honest communication aside, a franchisee can’t just call up a franchisor to come save the day if their unit isn’t performing well. In order to make sure franchisees don’t lose sight of their own responsibilities, brands must live up to their end of the bargain so franchisees can, too.
It’s a franchisor’s responsibility to maintain the integrity of the brand and guide and direct its franchisees to the best practices within the brand’s system—from marketing strategy to operations and everything in between—that translate into success, but franchisees have to answer for their own unit’s performance in accordance with those plans. Yes, franchisees are encouraged to be entrepreneurial, but they shouldn’t endeavor to change systems or processes without franchisor approval. At its core, the strength of the franchise model is in its standardization.
To maintain a relationship that is empowering and motivational for franchisees, where they feel supported and capable of performing well in a given system, franchisors should outline clear expectations from the start, maintain consistent communications. Doing so will give you the best chance to scale effectively with the right franchise partners.
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