Franchising: Are you running with the bulls or fostering positive franchisee relations?

Franchising_ Are you running with the bulls or fostering positive franchisee relations?-2

You Have Two Distinct Relationships with a Franchisee

Franchise Mega-Brand (Mega=Great) leaders recognize that their systems operate on two very different but equally important relationship levels with their franchise owners. First is the legal relationship between the franchisor and franchisee that is defined in the Franchise Agreement. The second one is the operating relationship between the franchisor and the franchisee – which is communicated through company culture and philosophy.

Of these two, the operating relationship is the most important because it will lead to fewer negative, legal relationships in the long run.

I often tell people that the best franchisee relationship lesson I ever had was becoming a parent to my four children. It’s not because franchisees act like children, but because I learned how to respond when questions are asked or comments are made.

My kids taught me how to be patient, and most importantly, to ask clarifying questions frequently until I know exactly what they are trying to communicate.

I take the same patient, inquisitive approach to franchisee communication and use it as an opportunity for system improvement and/or franchisee education.

In many instances, I (as the franchisor) learned a lot from the franchisees and improved the systems.

The Relationship Opportunity

At one of the International Franchise Association’s annual conventions I attended a break-out session that was geared towards franchisee relations. One of the panelists was Sid Feltenstein (who is highlighted in this chapter).

At that time, Sid had acquired A&W® and Long John Silver’s®, which he turned around and then sold to Yum!® Brands. The A&W® and Long John Silver’s® turnaround was, and still is, a very successful story in franchising.

Sid was asked what the “secret” to the successful turnaround of the company was. Sid’s reply was simple and one that I have never forgotten. He said, “I asked the franchisees what needed to be fixed and provided it for them.” In other words, he saw opportunity to engage the franchisees in the process, value their opinion, and then leverage that relationship to enhance and induce change into the brands.

Of course, not all of us are dealing with change at this magnitude, however, even normal, day-to-day, incremental change requires positive and “engaging” relationships to ensure alignment of goals between you and your franchisees to clear up any misperceptions in communications.

Not a Free-for-All

Fostering positive franchisee relations does not mean that you create a free-for-all or a democracy in your system. It simply means that you create engaging ways for franchisees to be involved in the direction of the system and that you’re willing to listen to them.

When franchisees are directly involved and valued they can become apostles and advocates for you and that can quickly build system-wide communication.

Because franchisees tend to listen to other franchisees with less skepticism than they might their franchisor, having franchisee “buy- in” always aids better system communications and relations.

And the more buy-in the better!

The above is an excerpt from my book Five Pennies: Ten Rules to Successfully Building a Franchise Mega-Brand and Maximizing System Profits.

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