Relationship between a franchisor and a franchisee does not start and stop with business terms. Many other elements have to be invested to be able to create a successful partnership that can weather all storms
In this fast-paced world, trends change every day and people tend to develop a new taste every second. Not everyone can take a sip from the cup of the same franchisers, which makes franchisors’ task extremely difficult. In order to keep their status certain in the market, franchisors break the monotony with intensive research and study to keep their grip and hold firm in the eyes of the customers. In a nutshell, renowned franchisors from across the globe have come to a conclusion that the key to prepare a successful franchisee is proper research in ideation, training, audits, key account management allocation, etc.
Rules and regulations tend to change in any country and so the franchisors need to keep an eagle eye on the progressions, documentations and other formalities post signing an accord with their franchisees. Established brands make sure they undertake rigorous measures and agreements before signing a deal. For instance, Subway starts its communication by sending a Franchise Disclosure Document (FDD) first.
Brand Image
Brand image is the key area of concern for any franchisor. Mc Donald’s, Starbucks and other renowned brands took ages to earn a name, which is too fragile and can easily get tarnished by any negligence. Therefore, brands are highly precarious with their image. Rakesh Rana, General Manager, Subway, says, “Providing great customer experience is essential in building the brand.”
Choice of Location
The area of an outlet only adds to the brand’s image. Franchising heads choose the location as per their target audience and whether it is in malls, shopping centers, or near cinema halls, they have to be very selective and wise. “The factors we research before joining hands with a franchisee are the potential customer base, traffic patterns, proximity to strong population back-ups, visibility, and parking,” Rana states. Moreover, a franchisor prefers to keep its franchisees under close connection. “A location should have a nearby business and residential community,” says Rana.
Flexible Model
With the changing trends, laws, time and consumer feedback, the franchising model has to be flexible so that the brand can skip the repercussions. The Italian mobile repairing company Phonup considers India as a vast and diversified country. “Hence, in our view, FOFO (franchisee owned franchisee operated) is the recommended model,” says Amit, Chief Operating Officer, Phonup. A number of franchisors including Kioda have decided to enter the market with an investment model. “We will be retailing in multiple categories in our stores,” says Karthikeyan Vishnu, COO, Kioda.
Timely Inspection
If there is a loophole in the quality of the product, all fingers will be raised towards the parent company; therefore, they have to make a timely check on certain things. If it is a restaurant franchisee, then the food quality, surroundings, hygiene, etc. need to be inspected frequently. For example, Subway assures that it keeps on innovating and improving with the surroundings of its restaurants chains.
Building Relationships
Franchisors and franchisees share a very fragile relationship which needs to be enriched by healthy communication for mutual trust and confidence. If there are healthy negotiations, then the franchising brand can rise up through thick and thin. “We consider our franchisee as a ‘partner in progress’. We believe that a long-term relationship is built on mutual trust and support. The journey to such a relationship starts from a stringent franchisee and vendor selection process, 360-degree guidance and support during set-up, marketing, operations, product assortment, customer care, and repairs,” says Amit.
Franchisors think that the relationship is not only strengthened by communication but also commitments. Karthikeyan Vishnu, COO-KIODA, India, says: “If we deliver whatever we promise to our franchisees it will help us in building credibility for the brand. Once we get into the process of consistently delivering and providing them an opportunity to generate revenue, it helps in building a long-term relationship with the franchisee.”
Innovation
Innovation, research and development are all co-related to each other. The franchising head of Phonup thinks R&D leads to innovation and innovation leads to better product and services while better products and services lead to effective operational planning. Corroborating the fact, Vishnu says, “In today’s time and age, a dynamic business environment with innovation in systems and process is the key. Also, adapting and introducing new technology builds a robust operations system to service the franchisee network.”
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