Building and Maintaining Positive Franchise Relations
by Ed Teixeira
Franchise relations is the term typically used to refer to the state of the
relationship between a franchisor and its franchisees. It is perhaps one of the
more important matters that franchisors deal with in addition to growing the
franchise network and increasing sales and profits.
After spending a number of years in franchising itís been my responsibility
to observe and participate in a activities related to the promoting positive
franchise relations. Iíve introduced newsletters, organized franchise advisory
councils, held meetings and engaged in dispute resolution, all with the intent
to either preserve or foster positive franchise relations.
However, for these efforts to result in a positive outcome requires a strong
foundation that must be constructed by the franchisor. I would like to present
the components that go into building that strong foundation. Without these
elements I would dare say a franchisor will be constantly dealing with unhappy
and disgruntled franchisees.
1. The fundamental franchise program must afford each franchisee the
opportunity to reach their financial expectations. If franchisees "follow the
program" yet are not successful, the franchisor will be faced with franchisee
turnover, litigation and numerous other problems. Although franchise programs
shouldnít be constructed such that its franchisees are financially
unsatisfied, some franchise programs allow no margin for error. A franchisor
must be sure that the franchise program works. The franchisor must have a way to
gauge the success of its franchisees by surveys, collecting income statements
and utilizing other ways to evaluate franchisee results.
2. The franchisor must "listen" to their franchisees and put ego aside when
necessary. If a franchisee with a legitimate complaint canít communicate to the
higher levels of franchisor management and receive a reasonable and well thought
out response then be prepared. It's not always necessary to have a F.A.C.,
especially for smaller franchise companies, but there had better be a process in
place for feedback from the franchisees.
3. Be sure that there is an ongoing process to monitor franchisees through
field reps, surveys, meetings or conference calls. The greatest mistake a
franchisor can make is to be "out of touch" with the pulse of its franchisees.
4. The President or CEO should have a routine of staying in touch with select
franchisees. Even in a large system there is always a way for the leader of the
franchisor to maintain contact with certain franchisees and know what is taking
place within the network
Positive franchise relations are an important element of a successful
franchise company. Following the steps that Iíve outlined above represents the
building blocks of a solid franchise relations program.
© 2010 FranchiseKnowHow, LLC
Ed Teixeira is the President of FranchiseKnowHow, LLC. He
can be reached at firstname.lastname@example.org