Making Franchise Relationships Work
Learn how to invest your IRA or 401k into a franchise penalty-free. ($50k min)
The franchisee/franchisor relationship is a unique one. It differs significantly from the average "employee/employer" dynamic in various ways.
Over the course of 16 years, I've been both a franchisor and a franchisee at different times and at various levels of organizations. Ensuring an optimal relationship between the two will not only improve your bottom line, but perhaps your emotional well-being as well.
When you're new to an organization, you quickly understand the larger purpose of having two ears and one mouth. There is much to listen to and many to learn from before you should start making changes. As the youngest of seven kids, I've been used to people around me thinking they know more than I do (often times, this is true), but I also learned to speak up or you'll be left out.
Now, I try to listen--even moreso than when I was a "newbie." Surround yourself with great talent. To maximize this talent, have your team take ownership of a task as quickly as possible and get their input before investing valuable time and energy in one idea. A successful leader gives targets to achieve. It is vital to know what the ultimate goal is, but don't micromanage the process or the steps to get there. Here are three suggestions on maintaining a great relationship with your franchisee or franchisor.
1. Always Give the Benefit of the Doubt
As a franchisee: Let your franchisor know you will give them the benefit of the doubt when there are changes occurring within the organization. You know that the franchisor needs to make decisions for the present, as well as the future of the organization, and this can be the most critical aspect of your relationship in franchising. By giving the benefit of the doubt, the first thought that comes to mind should be: "There is a good reason this decision or issue has been addressed this way, and I should find out more before having an emotional reaction."
This self-talk is important, because a franchisor will make decisions not only with information they have today, but also based on things they know or believe to be true in the future. Remember, the top two assets to a franchisor are their franchisees, and their brand. If a decision damages either one (or both), they are hurting themselves just as much as their franchisees.
As a franchisor: You know a franchisee invested their future in your business model and wants to deliver the lifestyle and profits you expect. When a franchisee reacts emotionally to a decision you make, give them the benefit of the doubt before diminishing that franchisee's status in the minds of you and your staff. A franchisor may subconsciously put blinders on and may tend to give less credibility to that franchisee. Conversely, when you make an assumption about a franchisee, or react to something they did, only understanding part of the situation, then you will damage the relationship and that all important trust-bond.
Maintain trust in one another, and work out disagreements respectfully and with the understanding that both of you want the same thing--mutual success.
2. Seek First to Understand
Dig up all those old listening skills you had while dating (remember hinging on every word your date said?).
Sometimes, we're so busy that we don't take the time to truly understand where someone is coming from when engaging in a discussion. We misunderstand the true issue being raised by honing in on one element of the bigger picture. If someone doesn't like your new marketing plan or they receive poor service from your staff, or, given today's economy, they're stressed out more than normal, you should take a second to ask them what else might be bothering them. It will make a world of difference.
As a franchisee: Clarify your message if you are unsure of the core issue at hand, and don't be afraid to speak up. Recently, a franchisee was talking with me about business expansion and potentially adding staff. He appeared unusually short, and was having difficulty grasping the strategic nature of our topic. Finally, I simply asked him if there was something else that was bothering him. He shared that his cell phone provider had issued an incorrect delinquency, and due to that, his bank's loan committee, which happened to review his line of credit around that same time, lowered his LOC by 50 percent. This was a huge issue that had not been brought up yet, and given the cash flow impact, it would certainly limit this franchisee's ability to pre-load expenses or fund capital improvements without being resolved. It was a good thing I asked; its happened to other individuals I've spoken to, and has a trickle-down effect on other decisions and attitudes about the business.
As a franchisor: There may be distractions or various tangents of an issue that keep you from digging into solutions. Once you have a full understanding of a situation, work with your franchisee and use your instincts and skills to find the optimal results. Various solutions will arise from the brainstorming process, and you could learn new strategies and innovative solutions by listening, as well as offering your own skills.
3. Visit Your Teams One-On-One
As a franchisee: Technology is great, and phones, email and even web-conferencing have improved communication in many ways, but a one-on-one visit to your corporate office is a great way to improve your business. Your accomplishments depend on a successful execution of your model, and the franchisor wants to help you. Take the time and spend the money to fly or drive to their headquarters and schedule time with everyone--from the customer service and support to the president, CEO, and owner/s--if possible. Let them know how you're doing, your future goals and what they can do to help you achieve the success you desire.
It's not uncommon at times to feel isolated or disconnected from the organization. Seeing the big picture or the strategic nature to the operation can be difficult. If you own a retail or food service franchise, you're so busy that simply running day-to-day operations can be overwhelming. Remember that franchising offers support, templates and a relationship that drives performance and a unified sense of purpose: You fail together, and you succeed together.
As a franchisor: Most solid franchise systems have field sales visits, an annual convention or even regional meetings scheduled throughout the year. These are great for communicating, but you should take the time to be at these events, and strongly convey your vision for the franchise company. Your presence demonstrates this to your prospective and current franchisees, and shows them how serious you are about their business succeeding. Telling them that you want their advice is a tremendous exhibition of your willingness to do what it takes to learn from them and expand your business. Make time to listen to them, and assist in developing their game plan, or how they can utilize the resources within the system to succeed.
Successful relations between franchisor and franchisee are paramount to long-term growth. Both in good and bad economic times, utilizing the benefits and nature of the franchise relationship will help overcome many obstacles, while giving you the best chance at success.