Steps to Improve the Franchisor-Franchisee Relationship

Franchise Relations

If the culture fits both parties, and if both parties are committed to a common goal, the relationship will be good and success begins. 

By Harvey H. H. Homsey 

What makes a relationship between two parties good? What makes a marriage last for 50 years or “until death do you part?” While the answer might be philosophical or studied for years, it boils down to two words: culture and commitment. The culture has to fit both parties, and both parties have to be committed to common goals. In fact, both parties must accept their role in the relationship. Especially in the relationship between franchise system and franchisee, both have to want it. Making the franchise relationship a good one requires the right culture, the commitment of the franchise company, and the commitment of the franchisee, with the ability to tweak the commitment from time to time.

Establish the Foundation of Culture

Does society shape a culture or does culture shape a society? If an entire franchise organization, franchisor and franchisees, can be called one society, who is responsible for creating and maintaining the culture? Beliefs, values, ethics and purpose must all be aligned for a perfect match between the franchise system and franchisees. In fact, the culture of the entire organization is made up of this matched combination. It is truly a combined responsibility. The franchise company must create the culture that provides a fair place to conduct business and communicate business matters. Additionally, the franchise organization should nurture it through all avenues and means possible. It’s not enough to say, “We have a culture.” It is a must to live it.

When prospective franchisees look at a potential franchise company, truly it’s not the brand, product or sales model that they are being sold on or even reviewing up front; it’s the franchise system’s culture, the feeling and the people that make up the company. If the right culture is in place, fitting both the franchise company and the prospective franchisee, then a match is made. If the culture remains true to its beliefs, values, ethics and purpose, then a long-term relationship is developed. Once the culture is set, the franchise company can begin to develop the brand, which in essence represents and fosters the franchise company’s core culture.

Franchisor Commitment to Building the Brand

A franchise system provides three simple yet sophisticated and complete products: a brand, a system and support of that system. Commitment to these three products is paramount to the success of the franchise company and the franchisee alike.

The franchise company’s first responsibility is to the protection of the brand on behalf of the franchisee. The company name, the company reputation, is the brand, the pure essence of what the franchisee is selling in his local market. While a cliché, it’s true: we only have one chance to make a first impression.  A company brand generates the first impression of prospects, clients and the community at large.

Franchisor Commitment to Create and Innovate a System

A proven franchise system to follow and sell is needed to bring the brand to life. Franchise companies provide systems, a way for franchisees to do business. Franchise companies provide the training, the “how-to” and “how not to” of running the business. It’s the system that gives the franchisee the time to spend a working day selling and supporting instead of recreating business models. Franchise firms that create, maintain and even control their systems for franchisees find more successful owners who are reaping the benefits. When prospective franchisees are researching a prospective franchise system and ask current franchise owners what makes them successful, it’s that simple answer, “I follow the system” that strengthens the reason to buy a franchise.

Franchisor Commitment to Continually Support the System

Support of the franchise system can be offered at various levels. Some franchise organizations support the entire system, including materials, training and ongoing support. Others offer advice and guidance. Either level works provided the franchisee knows up front what to expect. Whatever the level of support, the franchise system must be committed to support. For example, simple things such as returning phone calls are a must. Having knowledgeable people available to answer any type of call can also be essential. Just listening to the franchisee and providing guidance in the following ways allows the franchise company to provide even more support such as:

•   Talking to the franchisee on a weekly basis  
•   Sharing experiences from other franchisees to help make their business successful
•   Being willing and available to listen to challenges. 

Working with the franchisee to set goals, create plans and develop business strategies is one level of support. Assisting the franchisee with challenging situations and providing advice on particular situations is another level.

Holding meetings, providing continual communication and getting feedback from franchisees are some of the best and most effective ways to provide support. Successful franchise companies plan weekly, monthly or quarterly meetings with franchisees to ensure all relevant information is communicated. Above all, encouraging franchisees to use the support and counsel of the franchise firm’s staff can prove to be the most beneficial support.

Franchisee Commitment–The Other Half of the Equation

The franchise system is only responsible for part of the culture and commitment in a good franchise relationship. Not only are franchisees the other half of the equation, but the vital half. It’s their business; it’s their life on the line; it’s they who have risked it all to succeed or not as the franchise owners. The opportunity and benefits that come with owning one’s own business are also balanced with challenges and risks. Their first commitment has to be to themselves. It’s their money; it’s how they feed their children.

The franchisee has bought or been awarded a franchise–the opportunity to conduct a certain type of business in a specific manner within a given territory. There is no reason for the franchisee to reinvent the wheel, but instead just follow the system. The second part of the commitment then must be to protecting and following the system the franchise has purchased. Franchisees sell and service the product, based on the guidelines from the franchise system. Franchisees have the best of both worlds–local ownership with corporate support and backing. In addition to their commitment to themselves and the franchise system, franchisees have to be committed to each other. If a brand is to be protected, all franchisees must be in agreement that they will protect each other, a true commitment to the culture.

Tweak as Needed

Times change; systems change. Cultures must remain. Just because something worked one way 20 or so years ago doesn’t mean it will work today or for that matter tomorrow. Franchise companies have to not only be committed to the brand, proven system and support, but to maintaining and updating the company as a whole.

Laws change. Generations change. Updates to the system should follow suit. To remain current with the ever-changing world, the franchise system and franchisees must be committed to tweaking as needed. What must remain is the culture the franchise company has created for franchisees.

Culture and commitment are what make any relationship between two parties good. And in the franchisor-franchisee relationship, culture and commitment are the basic ingredients for success. Success then is not the end, but the beginning of the relationship. The culture has to be fair and agreeable to both parties. The franchise firm and franchisees must be committed to each other, their respective responsibilities, and a common goal. If the culture fits both parties, and if both parties are committed to a common goal, the relationship will be good and success begins.   

Harvey H. H. Homsey is vice president – franchise systems of Express Services, Inc., the franchisor for Express Personnel Services. He can be reached at harvey.homsey@ExpressPersonnel.com