The franchisee-franchisor relationship is distinct from other business relationships. It differs from a relationship between an employer and an employee in which the employer is referred to as “the boss.” The franchisee is essentially their own employer in a franchise arrangement. However, it isn’t quite “equal” either because each party has a particular function to play.
It is a professional relationship that requires leadership from the franchisor as well as some degree of relinquishment and permitting of independence for the franchisee. As a result, while there is some interdependence in the relationship—each party depends on the other for economic progress and growth—there is also a great deal of independence between them.
Relationship roles
Understanding the functions that each party performs is the first step in managing this relationship in a franchised firm. Although it can seem clear, it may occasionally need to be reviewed!
Franchisor
provides, in exchange for fees and royalties, the company operating systems, tools, and coaching needed by franchisees to operate their own enterprises. Additionally, the franchisor should offer their franchisees the assistance they require to prosper in their enterprises.
Franchisee
Franchisee uses the franchisor’s business systems, agrees to the contract’s terms and conditions, and pays fees and royalties in exchange for the right to do so. When it comes to managing their company and recruiting staff, franchisees take numerous independent decisions.
Relationship management tips
Respecting your franchisees will increase the likelihood that they will respect you in return. Keep in mind that while you are there to help and lead them, you are not working for them.
Communicate with your franchisees clearly and effectively; it’s crucial to maintain regular contact that goes beyond the occasional email. This may entail holding frequent conferences, gatherings, and training sessions, paying attention to suggestions for enhancements, and keeping franchisees informed of changes or new developments as they happen.
Respond to support queries; even though your franchisees are not your employees, you should nevertheless give them the support they require. Be sure to react to franchisees’ demands as soon as possible.
Since it is in the best interest of both sides for franchisees to prosper, show genuine concern for their success. Be genuinely interested in your franchisees’ lives and careers as business owners.
Deal with disagreements and conflicts right away; else, they may fester and worsen. Mutual respect and active listening should be the cornerstones of conflict resolution. If everything else fails, you can always contact the Office of the Franchising Mediation Adviser to arrange for mediation. Make sure you have very excellent reasons for ending a franchise partnership (such as breaches or misbehavior) and that you are aware of all the legal ramifications if it ever comes to it.
