Advisory Jun, 25 2010

Constructive relations, profitable results

A franchisor being a brain behind the franchise concept understands the requisites of a business better than the franchisees. Building foundation for a strong relation is one such requisite for which a franchisor has to take the initiative. Read on to kno

By Ramanjit Kaur
Feature Writer
Constructive relations, profitable results

The relationship between a franchisor and his franchisees can be an analog to a parent-child relationship. As parents teach and train their child the practicality of life, similarly in franchising the franchisor teaches and trains his franchisees about the franchise concept. The aspiring entrepreneurs are naives just like infants who are totally dependent up on the franchisor. Once the entrepreneur becomes a franchisee, the entire responsibility for his upbringing is of the franchisor. Franchisee is the channel partner who shares the mission and the vision of the franchisor. Both the parties join hands to achieve the common goal of making optimum profits. Healthy relationship between the franchisor and the franchisees is the key formula for franchise success. This article highlights the strategies adopted by the franchisor from time-to-time to keep the relationship exciting and meaningful.

Getting started

Selecting and training the franchisees is not an easy task. The franchisor needs to invest in methodical, regular and specialised selection process followed up by good training and induction system to assure the success of the franchisees. A franchisor is advised to take professional help from franchise consultants or franchise brokers in selecting the franchisees. Franchise business involves huge amount of hard earned money and efforts, so every essential step needs to be taken cautiously to avoid later regrets.

It is essential for the franchisor to develop and refine the business model and systems that result in successful unit economics. Just like a parent, a franchisor has to teach his franchisees how to operate according to the system and how to grow their business. In other words, there should be a perfectly functional system to direct your franchisees’ mind and enhance their skills to get succeeded. It is the primary step that leaves an impression on your franchisees’ mind and decides the fate of your franchise relationship.

Authority with responsibility

After selecting the franchisees, the franchisor needs to take initiative to strengthen the franchise bond with the franchisees by carrying out the responsibilities of making the franchisees a success dedicatedly. Here are the responsibilities of the franchisor:

  • Developing the franchised outlets  
  • Providing a proven and robust franchise system
  • Guarantying the readability and working of the operating manuals
  • Marketing business concept
  • Training and guiding the franchisees
  • Creating and maintaining standards
  • Monitoring and motivating the franchisees 

Besides this, it is also the duty of the franchisor to make sure that the franchisees understand their duties and comply with the franchise agreement.

Strategies to stimulate franchise bond

A franchisor has to be very conscious about the franchisees’ state of mind especially during the early phase of franchise establishment. During this period, franchisees are like growing kids who are very demanding. They critically assess all the support and training offered by the franchisor, so it is necessary for you as a franchisor to carefully manage the relationship and must try to eliminate the negativity (if any). For keeping the franchisees happy and enthusiastic, a franchisor can adopt a number of strategies; some of them are listed below:

  • Stay in touch: Being a franchisor, you have to stay in touch with the franchisees to assure standard co-operation and regular back-up. You have to communicate with them on regular basis to discuss the operations of the franchise business, their feedback on the ongoing support and training, and so on.
  • Regular monitoring: A franchisor is expected to regularly monitor tokeep a track of information that gives a complete idea about your franchisees’ business performance and direct them from time-to-time to enhance their performance.
  • Franchise meets and seminars: These meets and seminars play a significant role in learning new tactics of running a business. Additionally, the various franchisees of a network get a chance to meet and discuss their strategies that are helping them in boosting their franchise business in the particular territory.
  • Morale boosting: The best way to motivate your franchisees for better results is to organize an annual award show where the franchisor can presents award to the franchisees who are doing good in their respective geographical area.
  • Invite suggestions from franchisees: To make your franchisees feel that they are an important part of the company, you can ask them for suggestions or ideas to increase the business.

Franchisees are the driving force of a franchising business, therefore following these strategies can be a great help for the franchisor in order to gain their confidence. However, it is not just the job of the franchisor to build and maintain the franchise system; rather the franchisees are expected to put-in equal amount of efforts to ensure the success of franchise life cycle.

Related: Administer your finances for franchise success

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