Advisory Sep, 16 2009

Foster franchisor franchisee relationship

Franchisor and franchisee are the two interdependent entities. The franchisor depends upon the franchisees for expansion of his brand and the franchisees are dependent on the franchisor.

By Abha Garyali
Sub Editor
Foster franchisor franchisee relationship

The franchisor-franchisee relationship is not always on even plinth. The franchisor, on the one hand feels, he has full authority to enforce systems and standards as the business is his offshoot, whereas, the franchisee on the other hand often views himself as an independent entity, and wants to work his own way.

For the success of any business cordial relations between the partners as also the customers is most important. Similarly, in franchising cordial and cohesive relations between the partners is of paramount importance to usher in success.

In order to maintain strong ties amidst the partners the following view points may be given a serious consideration:- The key point in all relationships is an open and effective communication.

Relationships are built with dialogue, so it's important that the parties encourage dialogue in every aspect of the relationship. Annual conventions, regional meetings and advertising counselling can be effective to provide two-way communication. Failure to express concerns, emotions, or interests can lead to uncertainty and negative feelings, ultimately leading to the deterioration of the relationship. Problems are bound to arise in any relationship but these should be discussed quickly, so that an effective solution could be found out. Trust is the key to a long-term sustained relationship. If the franchisor has promised something to the franchisee it should be executed at the earliest.

The franchisor should be honest with the franchisee from the start. Lastly, to have a good relationship with the franchisee, the franchisor should genuinely care about the success of the franchisees. Both, the franchisor and the franchisee should be clear about their objectives and interests. The franchisor should make his goals and interests known to the franchisee before entering into the agreement. With the franchisee dreaming about differently, the relationship cannot gain stability and success.

Besides these key points, some other measures may also be adopted :-

  • Plans should be drawn up from the very beginning to develop amicable relationship and bonding.
  • Both parties should devise a system that would ensure a balance between the two. Whether the franchisee will fit into the expectations of the franchisor and vice versa.
  • Once an agreement has been reached, the franchisor should allow suggestions to be made by the franchisee, but the franchisee should be made clear that all his advices may not be binding on the franchisor.
  • Involving the franchisee in decision making of franchisor and receiving his counseling when occasions demand, may foster the ties between the two. The franchisee may be included in the advisory council.
  • The franchisor should understand that there are no exact guidelines or guide books to follow, when it comes to developing and fostering ties with the franchisees.

But it must be a strategic choice of the franchisor to constantly endeavour to groom, nurture and foster ties with the later in a quest to flourish his business.

Related: IPO and M&A: Adding Value To Franchising

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