The craft of franchise relations.
Like any set of skills, it takes continuous effort and practice to develop and improve the art of crafting strong relationships. The good news is that unlike art, which usually consists of some innate talent, the skills and talents required for building strong relationships can be learned.
The franchisor's relationship with the franchisee begins with their initial impressions, maybe advertising or word of mouth, which are created within the first contact. Long before someone actually becomes a franchisee, perceptions about the franchisor and the franchise company, either good or bad, are forming that will affect the development and entire relationship process.
Reality Check Time
Many times in the early stages of communications with a prospective franchisee, the franchisor's intent to present the most positive image of their future business relationship will result in unrealistic expectations by the franchisee. This courtship or honeymoon period is common, but soon the reality of the day-to-day challenges set in and put a strain on the relationship. Sometimes franchisees will feel misled or even betrayed.
It is important to recognize that franchisors and franchisees are viewing things from opposite perspectives. For example, the franchisor looks at and drives results from the top down making their percentages off the gross revenue. The franchisee is interested in net profits, or bottom-up results, because the net profit is income.
The fact that they maintain opposite financial perspectives and goals can often be the underlying cause of conflict.
Although there are many reasons lot disputes, the most common reason is unrealistic or unaligned expectations. Other common examples are when the franchisee expects more continuous support than the franchisor is willing or able to provide, or when a franchise reaches profitability and has the feeling that they no longer need the franchisor. The franchisee expects to see continuous added value from the franchisor with a, "What have you done for me lately?" attitude and may ask themselves what their royalty check is actually "buying" for them. At the same time the franchisor may feel that once the franchisee is trained, up and running, and either profitable or close to profitability, they require minimum assistance.
First and Foremost
So, how can the franchisor best nurture and develop their business relationship with the franchisee? First and foremost, the franchisor must select franchisees that they are able to partner with, and form a solid working relationship that enables both parties to build their respective businesses and achieve success together.
In order to achieve this, the franchisor and franchisee must communicate. Excellent communication is essential to any effective business relationship, and open and frequent communication is the key to maintaining good franchise relations. Without a commitment to periodic communication, the franchisor and franchisee are unable to function as partners, or remain involved and manage conflict effectively. It is important to encourage positive, open communication based upon respect for one another in a non-adversarial environment. The franchisor must be committed to the success of the franchisee and vice versa.
Conflict is a natural and vital part of any relationship. People often have different perspectives or points of view, based upon their life experiences, background, cultural diversity and financial goals. Disputes of varying degrees of severity will therefore occur. If the parties treat disputes as a natural part of a franchisor-franchisee relationship, then the disputes become simply another business challenge to overcome. They can be resolved more effectively and with less emotion.
Listen, Observe, Respond
During times of conflict it is incumbent upon the franchisor to be an empathetic listener. As a good listener, he is observant, responsive and pays close attention to the franchisee and his needs. On the other hand, an effective speaker measures words, and considers how the other person will interpret those words. The franchisor must also speak to the franchisee with respect, empathy and honesty in all aspects of the relationship including conflicts. Often disagreements stem from a lack of respect for the other party or their ideas, and that can undermine even the strongest relationship. Providing the franchisee with an opportunity to vent their problems and the inevitable emotions that accompany conflict will allow both sides to move ahead to the next step--collaborative problem solving.
The franchisor must make every effort to understand the franchisee's point of view. In this way both parties can attack the problem together to achieve a solution that both sides can live with. After discussing a problem and diffusing its emotional components, the process of resolving the conflict can begin. Creative problem-solving with the goal of a mutually beneficial outcome fosters stability in the relationship. This approach further develops the franchisor's and franchisee's problem-solving skills, enhancing future dealings with one another as well as with other franchisees and customers.
Mentoring: An Important Tool
Mentoring is another important tool in the development of the franchisor-franchisee relationship. Franchisee advisory boards or councils provide a forum for mentoring and addressing the needs and concerns of a broad range of franchisees. Board or council members are elected by franchisees and are therefore accepted as their spokespersons and mentors, facilitating positive franchise relations. This is particularly helpful in dealing with cultural, ethnic and socioeconomic differences. The board or council provides the opportunity for franchisees to share experiences, information, and to learn from their counterparts who face the same challenges.
The art or craft of franchise relations begins with the selection of the franchisee, and requires a commitment by the franchisor to develop open lines of communication, respect for his business partners, and provide a forum for addressing issues, conflicts and mentoring for franchisees. By integrating the franchisee advisory board or council into the decision-making process, the franchisor facilitates positive franchise relations which can effect positive change and future growth within the entire organization.
Rick Robinson is president of Jani-King Southwest. He can be reached at email@example.com.
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|Title Annotation:||The Art (And Craft) Of Franchise Relations|
|Date:||Sep 1, 2003|
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