“All relationships need to be nurtured, whether they’re with your business colleagues or your family and friends. Maintain good lines of communication; be willing to listen to other people’s points of view; and don’t forget that, ultimately, you need to be comfortable with your decisions” – Richard Branson
Succeeding in business is all about making connections and relationships, which can be challenging at times therefore franchisors need to manage relationships with their franchisees accordingly.
Selectivity, consistency and engagement are essential for finding great franchisees and growing relationships with them. The most important thing isn’t necessarily finding new franchisees, it is managing existing franchise relationships with your current network.
As your franchise network continuously grows the challenge arises of managing and nurturing relationships effectively.
The relationship defined
- A marriage
Time and time again we often hear that the franchisor-franchisee relationships can be compared to that of a marriage. The franchise agreement defines the terms and basis of the relationship upfront to ensure that both parties are aware of their rights and responsibilities throughout the relationship, much like a marriage contract. Once the agreement has been signed and the relationship has been formalised the operations and procedure manual can define all processes and procedures that needs to be followed on a continuous basis. This relationship is generally a long-term and long-distance relationship which increases the complexity of managing the relationship effectively. Therefore, effective relationship management will ensure continued success in any franchise network
- A parent-child relationship
In other instances, franchising is compared to a parent-child relationship. Franchisees (the children) go through a life cycle where at some stage they will start to test the boundaries of the relationship and see how much they can influence the system the franchisor (the parent) has set out for them. Franchisors need to clearly communicate rules and intentions in a professional manner to enforce them from the start.
Character traits in the relationship
- Franchisor characteristics
As a franchisor you take on a very complex and dynamic role in the franchise system and the responsibilities that accompany the title. Franchising successfully is dependent on a good franchisor that has a unique personality type, set of attributes and characteristics with a solid foundation as a business person.
- Franchisee characteristics
Franchisees are people with drive, ambition, independence and commitment to succeed on their own but want to minimise their risk as an entrepreneur by following a proven model and blue print to operate their business. This independent vs conforming structured relationship makes the management and interaction with franchisees unique and complex i.e. they are independent business owners that need to conform to the franchisor’s prescribed operational standards and procedures.
Within a franchise network, franchisors will come across different personalities, people and backgrounds amongst the franchisees that need to be managed effectively to ensure the overall success of the network.
“If everybody thought the same way, not only would it be a very boring world, but you’d have a very stagnant business. Diversity within the workforce is tremendously beneficial, and this extends to employees who think and operate in different ways” – Richard Branson
How to manage franchisor-franchisee relationships
Franchisors need to develop effective management skills to managing successful franchise relationships which include, but is not limited to:
- Getting to know your franchisees and what their needs are. When you get them talking about the things they love, it builds trust – find that personal connection with franchisees
- Taking time to listen to them and hearing their opinions
- Stay in touch with franchisees over time
- Congratulating them on achievements
- Offer ongoing support and follow-up engagements. Supporting franchisees and keeping a close eye on team morale is incredibly vital to achieve success in the relationship
- Deliver on promises and expectations set out
- Focus on interpersonal aspects of business leadership and mentoring
- Provide direction to franchisees with a clear explanation of why the specific direction is being taken
- Be committed to franchisee success
- Be a trusted advisor – build trust with your franchisees
- Under promise and over deliver – make sure you know what the franchise can realistically achieve and plan strategically.
- Measure and monitor progress and results
- Provide continuous feedback on business related decisions and processes
- Maintain your franchise culture – dynamics change as your franchise network grows but it is crucial to stay consistent with your franchise culture.
If a franchisor doesn’t possess the necessary skills to manage relationships with franchisees it would be best to employ a franchise director and support team to assist.
Effective communication is key
To be effective, communication needs to be frequent, honest and transparent. Whilst there are some things franchisors choose not to share with franchisees e.g. not declaring rebates or kickbacks, it is important to note that the key to successful relationships is trust. Franchisors need to ensure that there is no communication disconnect at any level of the structure/network.
It is all too tempting to only rely on technology and the internet for all communication to the franchisees. Social media has created a sense of imbalance when franchisors think they are staying in touch with franchisees by posting content. You cannot rely on social media to establish and maintain a relationship, personal face-to-face interaction with individuals creates a personal touch and better connection. All too often, we have noticed that a well-intended email gets misread and misinterpreted which could cause disruption.
Relationships are built with two-way constructive communication. Good franchisors will create events such as annual conventions, regional or district meetings and franchisee representative councils, in order to ensure two-way communication is conducted and franchisee’s opinions are voiced and heard.
Principles on communicating with franchisees
- Take calls from franchisees
- Have a dedicated support structure for communication
- Respond timeously to franchisee messages
- Conduct interpersonal calls with franchisees
- Never speak negatively about any franchisee to other employees (communication regarding franchisees should always be respectful)
- Use a technology platform to track and record all communication
- Ensure a consistent tone and accuracy of information is conducted with franchisees
Franchisee representative councils
Franchisee representative councils are established to facilitate communication between the franchisor and franchisees and between franchisees themselves as a mechanism for franchisee involvement and leadership. Franchisees normally nominate their own franchisee representative to be part of this council.
You don’t build a business, you build people and then people build the business.
Richard Branson said: “I surround myself with people who I believe are better than me in their specific areas of expertise, and then I get out of their way, delegate to them and try to give them as much support as possible”and we believe it is great advice for franchisors to live by; franchisors need to recruit franchisees with specific characteristics that would ensure success for the brand that will be able to run a successful independent business with immense support from the franchisor, and ultimately building strong and lasting relationships.