franchising aspects Jul, 16 2012

Perfect partners develop profitable franchise

Both franchisors as well as franchisees look forward for a strong franchise relationship but it is not always possible. However, to have a successful business it is essential to maintain healthy relationship with each other. Read on to know about the ways

By Abha Garyali
Sub Editor
Perfect partners develop profitable franchise

Every aspirant dreams of having a flourishing franchise outlet with a lot of profits pouring in. Similarly, each business owner while taking the franchise route imagines himself becoming a successful franchisor with a big network of successful franchisees. Nevertheless this dream will merely remain a dream if franchisor and franchisees do not enjoy strong, trouble free relationships.

The franchisors and franchisees have to put their best foot forward for maintaining perfect franchise relationship. Let us gauge how they can grow their business to the biggest and most successful franchise network.

Franchisor’s role for perfect liaison

Franchisor from his side can surely work to develop a conflict less relation with his franchisees.

No fake promises: Sometimes to win franchisees, a franchisor may make promises which he can not maintain later. Therefore any franchisor should never try making fake promises, which might be too difficult to maintain in the long run.

Follow the franchise agreement: Franchise agreement being the most important document for franchising should be maintained carefully. Franchisor should follow whatever has been written in the agreement.

Training and support: A good franchisor always provides his franchisees with all necessary help and guidance that is required during business establishment and afterwards too. If any franchisee is not doing well, the franchisor should from his side look into the matter to correct the present situation of his franchisee. Avoiding a franchisee failure would make it bigger and more prominent for future.

Marketing and advertising: Franchisors should provide excellent marketing support to their franchisees. Leaving franchisees to do their advertising themselves  is not a good idea.

Besides these, the franchisor can conduct regular surveys and walk-ins to the outlets of his franchisees to see whether they are following the guidelines as given by him. Moreover regular up-gradations in outlets as well as in machineries should be provided by the franchisor in tune with other brands.

Franchisees’ playing their part

A franchisor alone cannot assure the success of the franchise business unless the franchisee actively participates in it, and understands it well. It is important for the franchisee to work according to the written obligations, develop methods to avoid conflicts and work together with the franchisor to gain sustainable growth. It is the franchisee that takes up the responsibility of building a strong relationship with the franchisor. Along with investment of time and money, franchisees have to put in trust on the franchisor in order to lay a strong foundation of a healthy franchise relation.

Avoid greediness: Few franchisees spend needless energy on negotiating the franchise fee and royalties even after signing the agreement.  Some franchisees, seeing their success want more profits and start negotiations with franchisors to lessen their royalties. This can strain relations.

Being humble: After initial success some franchisees become over confident and stop respecting and listening to franchisors. However it should be kept in mind that it is the franchisor who has started and made the business successful.

Running the business his way: There usually comes a stage when a franchisee starts feeling that he can run his outlet in a more profitable way without following the instructions of the franchisor. He may start deviating from the path set by the franchisor. This is where the relationship between the franchisor and franchisee can take an ugly turn. Therefore, a franchisee is always advised to have healthy discussions with the franchisor rather than making changes without consulting his franchisor.

Spreading rumours:  Sometimes franchisees start spreading rumours about the franchisor to other franchisees in the network. This can cause disharmony in the whole network, ultimately leading to failure of the whole business.

To conclude it can be said a strong and honest relationship between the franchisor and his franchisees is the basis of success for the franchise business. Both franchisor and franchisee are the foundations of the company. Slight disagreement among them can lead to the whole building falling to the ground.

Related: Minimum guarantee, pros and cons

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