Advisory Sep, 19 2009

Stop creating unhappy franchisees

Franchisees are the expansion channels of franchisors. A successful franchisee will spread a good message of the franchisor, whereas, an unsuccessful one will do the opposite. If a franchisor is responsible for the success of a franchisee then its failure

By TFW Bureau
Stop creating unhappy franchisees

Franchisees often fail as a result of unorganised management or a badly structured business model. But there are some examples when even successful business models have failed. Here are some tips for the franchisors to make their franchisees a success.

Fee structure: It should be such that it allows enough profit margins for the franchisee, and it is not taxing or arduous to meet with.

Spend time together: Spend quality time with your prospects, make sure that you get to know them, and they get to know you. If you sense the prospect is not a good fit, take a pass.

Discern franchisee’s financial position: Make sure the prospect has the financial resources he needs. Make sure they understand the potential downslide and risks associated with the business. Even great franchise systems require hard work and have risks, don’t candy coat it.

Assist in selecting location: Help your franchisees in locating the best site. If a market has too much of competition, tell them so, even it means losing sale.

Deliver proper training: Impart a comprehensive training to the franchisee and his team of people. Make sure that they understand the every nitty-gritty of the trade and in turn they are able to deliver a complete satisfaction to the customer.

Extend regular support and help your franchisees adjust in difficult times. Giving once a year visit, a phone call or providing casual support is not enough.

Ensure your business model is working smooth: If you can’t make profits in your company owned stores, or if you have large number of franchisees failing, stop your franchise sales efforts.

Help franchisee in need: If you have a franchisee requiring help, extend him every possible aid, cooperate with him to let him cope-up with the situation.

Keep your communication lines open. I think these tips will go a long way in maintaining a healthy franchisor-franchisee relationship.  We try to live by mutual exchanges and balances. And if an attempt is made in right earnest following above tips, we may surmount the problems that may surround us.

Related: Franchise Feasibility check

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