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A Beautiful Friendship As a franchisor, your relationship with franchisees won't always be easy. Here's how to smooth out the bumps.

By Mark Siebert

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.

As new franchisor, you may find the nature of your relationshipwith your franchisees to be unique and even, on occasion, daunting.While you have the right and the obligation to enforce systemstandards, your franchisees often view themselves as an independentbusiness (which they are) with the ability to call their own shots(which they are not). And while the relationship is contractual innature, if you are ever forced to bring out the contract, therelationship is already in jeopardy.

Thus, the franchisor must pay particular attention to thefranchisor-franchisee relationship from the very start if he or sheis to create a long-term and mutually prosperous undertaking.

The Nature of the Relationship

Time and time again, we have often heard people compare thefranchisor-franchisee relationship to that of a marriage. They willtalk about the "honeymoon" period and how the franchisorand franchisee are in "partnership" together for a commonpurpose. And while this analogy may have some merit, our feeling isthat a marriage is exactly what the franchise relationship shouldnot be.

When we think of marriage, we think of a joint venturerelationship. In a joint venture, there are partners. Because ofthe relatively equal footing of the "partners," thetypical joint venture starts out with a negotiation--and is often aseries of ongoing negotiations. Like a marriage, there are the"who does the dishes" issues, and then there are the moreserious issues, such as money. Because each joint venture isunique, every one of these issues is usually subject tonegotiation.

Because a joint venture partner typically is compensated basedon how much money goes to the bottom line, one concern that most"spouses" have is how the accounting gets completed. On aone-off basis, this is fairly easy to monitor. But on a massivescale, it is almost impossible. And when your joint venture spousedoes cheat on you, it can become a battle among equals in divorcecourt. In fact, that is one of the big differences we find betweenfranchising and joint ventures.

Unlike partnerships, franchising is much more like aparent-child relationship. The franchisee, like the child, will gothrough a variety of growth phases during the course of theirlife.

When children first come on the scene, they are typically verydependent on their parents, relying on them for the education andtraining that will allow them to survive in this world. And as theygrow older, they become less dependent, and you begin to allow themsome latitude--first playing in the yard and eventually crossingthe street on their own. As they get older still, they will beginto test the boundaries of their relationship, pushing a littlearound the edges, trying to change or influence the system that youhave set for them--and perhaps breaking some of the rules. But theystill live in your house, and what you say goes. It is simply aquestion of how forcefully you choose to put your foot down.

How to be a Good Parent

When I was young, I remember being envious of one of the kids onmy block. Mike's parents were rarely home, and when they were,they let him do whatever he chose. At 15, we would sneak over toMike's house and drink beers and smoke cigarettes. I thought hehad the best parents in the world. But when my mother found out, Iwas grounded for a month.

Before I had served my mother's "sentence," Mikehad found his way into a real sentence--at a juvenile detentioncenter. And I began to understand that sometimes being a greatparent means you cannot be a good friend.

Likewise, a franchisor needs to start by establishing theboundaries of the relationship. It is important that the franchiseeunderstand that your first role as "guardian" is to guardthe system and the brand so all franchisees can continue to thrive.Thus, one of your most important roles as a franchisor is that ofdisciplinarian. To do that, you need to clearly communicate therules and your intention to enforce them from the start.

At the same time, it is important to understand that, as afranchisor, discipline can no longer be meted out the way you mayhave when you owned all your operations yourself. If you try togive a franchisee the "it's my way or the highway"speech that worked so well before, you'll quickly find yourselfwith alienated franchisees--the first step on the road to realtrouble.

Franchisees are business owners, and as such, require you tocommunicate with them in a professional manner. Being firm withfranchisees, as opposed to managers, also means providing them withan explanation for your various "requests." Mostfranchisees have a key desire for their opinions to be heard. Afranchisor should thus avoid making decisions in a vacuum andproviding direction to franchisees without a clear explanation ofwhy the direction is being given.

Effective Communication is the Key

The key to being a good franchisor starts with communication.And that means more than the occasional newsletter and a visit fromthe field representative.

In today's technology-centered society, it is all tootempting to rely on the internet for all our communications. But ina franchise context, that would be a big mistake. All too often, wehave seen well-intentioned e-mails ignite a firestorm when they aremisinterpreted.

Relationships are built with dialogue, so it's importantthat you encourage dialogue in every aspect of the relationship.Good franchisors are careful to create multiple venues whereconstructive dialogue will occur. Annual conventions, regionalmeetings and advertising councils all provide for this two-waycommunication.

The accessibility of your senior staff is also vital. I haveknown the senior executives of some fast-growing franchisors whowill not go home for the night until they have personally returnedevery franchisee's call.

One of the most important tools at a franchisor's disposalis the franchise advisory council. As the franchisor, creating thiscouncil not only allows you to control the agenda, but also assuresyou a voice on it. The last thing you want to do is find out yourfranchisees have formed an organization without you-that'susually a sign something is wrong and they have excluded you fromthe process of resolving the grievance. Whatever comes next isusually not pretty.

To be effective, the communication needs to be more thanfrequent. It needs to be honest. While there are some things youmay choose not to share with your franchisees, the key to along-term sustained relationship is trust. And trust starts withopenness and honesty. Get caught in a lie once, and you havedestroyed that trust forever.

Lastly, to be effective, you have to genuinely care about thesuccess of your franchisees. Good franchisee relationships startwith a franchisor that is, first and foremost, committed tofranchisee success. That commitment, more than anything else, needsto permeate the franchisor organization at every level.

If your franchisees do not sense your commitment, therelationship can quickly become adversarial. If, on the other hand,your franchisees see you breaking your back to help them achievetheir success, there is almost nothing they won't do foryou.

Mark Siebert

Entrepreneur Leadership Network® VIP

Franchise Consultant for Start-Up and Established Franchisors

Mark Siebert is the author of The Franchisee Handbook (Entrepreneur Press, 2019) and the CEO of the iFranchise Group, a franchise consulting organization since 1998. He is an expert in evaluating company franchisability, structuring franchise offerings, and developing franchise programs domestically and internationally. Siebert has personally assisted more than 30 Fortune 2000 companies and more that 500 startup franchisors. His book Franchise Your Business: The Guide to Employing the Greatest Growth Strategy Ever (Entrepreneur Press, 2016) is also available at all book retailers.

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