Conflict is not pleasant, but it seems to be part of all relationships at one point or another. In franchising, if conflict is left unchecked it can escalate to the legal arena where communication no longer can heal the differences. Therefore, like it or not, we must deal with conflict and seek ways to resolve it.

• Prevent differences from escalating to conflict.

The answer to dealing with conflict is not to avoid it, instead it is to prevent it. Avoiding conflict can paralyze a person and a company; and, it may also lead to secrecy and lack of communication.

When we avoid conflict we generally create a much bigger mess. Take for example the franchisor who refuses to move ahead with a needed change in the organization because the franchisees may get upset. His or her lack of action is sure to ignite the discontent of proactive franchisees who desire the change. And, the franchisor who keeps information from franchisees to avoid conflict is bound to face a higher level of discontent. We all know that secrets do not stay secret for very long and that franchisees will find out and resent the lack of trust and honesty.

Preventing conflict is about communication. Keeping franchisees informed of what you are doing and the reasons behind your actions and inaction is the only way to keep differences from escalating to larger issues.

• Catch it before it goes to the written form.

If you can’t prevent conflict, at least catch it before it soars. If you allow differences of opinion with your franchisees to go to the point of being discussed in a written format you have let it go too far. When franchisees begin to write down their grievances you may be just a few step away from legal action. And, those franchisors who tend to answer any and all complaints with references to the franchise agreement invite such move. The key is to resolve the differences while you are still talking with each other and the only way to do this is to proactively check the morale of your franchisees consistently and often.

• Seek common ground.

Conflict can only exist when you and your franchisees are pulling in different directions. When dealing with conflict, find the common ground between you and your franchisees. Start the conversation by talking about those things that you agree upon and let these shared values, needs, interests and beliefs be the starting point of your discussion.

• Actively seek a solution.

Franchisors seeking to resolve conflict must contemplate the fact that they may not have the best answer. To be actively seeking a solution means that you are willing to ask your franchisees and to listen openly to their positions and to their proposed solutions. It requires that you give these proposals an honest chance, at the very least in your mind.

• Listen.

Conflict can never be resolved if we don’t listen. If franchisors or franchisees keep thinking about their own needs while the other shares theirs, no listening can take place; and thus, no room for conflict resolution exists. When discussing different opinions we must rescind our need to convince our franchisees that we have the answer, at least long enough to hear them out.

To find common ground and find solutions we must be able to sincerely elicit input from franchisees and truly understand their points of view. We need to put ourselves in their positions. We will never be able to do this if we do not listen. Remember, hearing the words is not listening for the latter requires our full attention AND our embracing the possibility that we may not be right or may not have the best answer.

Related posts:

1. 3 Simple Ways to Create Strong Relationships with your Franchisees
2. 3 Things Your Franchisees Expect From You
3. What to do if your franchisees are venting anger in Twitter?

From time to time I find interesting news happening in the world of franchising so I have decided to share them with my readers in this format. I hope you enjoy this new addition to the Small Biz Franchising Blog. They will have the same title and the same graphic and, of course, they will be a new category.

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Announces New Website

Pizza Hut recently announced the launch of a new site solely dedicated to their franchising efforts. I love this site, it provides great information in a very simple and succinct manner. I think it is very effective.

I believe this move by Pizza Hut speaks to the power of SEO. As companies look for new ways to bring their franchise offerings to the forefront of searches by potential franchisees, they realize their websites need to be more focused. The Pizza Hut (http://www.pizzahutfranchise.com) is one example of how franchising companies are playing the SEO game well!

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Hosts Franchisor Networking Event in September

Today more than ever franchisors are searching for leads, and an effective source for more qualified ones are referral sources. The Entrepreneur’s Source (TES) is the leading career and business coaching firm specializing in introducing potential franchisees to franchisors.

TES will be hosting a franchisor networking event next month. The objective of this gathering is to educate franchisors about the benefits of working with TES. The event will take place on Wednesday, September 15, 2010 at the Marriott Harbor Beach Resort in Fort Lauderdale, Fla.

Brian Miller, President and CEO of The Entrepreneur’s Source said about this event:  “We want to give franchisors who have yet to discover the benefits of working with TES a glimpse into the growth programs we have in place to help them achieve their goals.” He encourages interested franchisors to contact Lisa Powell before August the 26th at (203) 405-2114 or LPowell@FranchiseSource.com.

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Paul Segreto, CEO and Founder of franchisEssentials, has a great article about Social Media in this month’s edition of Franchising World an IFA publication. Do you want to learn about Social Media? This article is a MUST. Don’t know where to go from there? Simple, just give Paul a call!

Related posts:

1. Social Media: How does it apply to franchising?

In more than one occasion I have been called a Franchisee Advocate; and although this may not have been said as a compliment, I have taken it as such. I fought for their rights and what I thought franchisors owed to them, and this got me in trouble more than once. Today my approach is much more balanced but my strong feelings for franchisees remain the same.

I was first exposed to franchisees in 1986 and since then I have trained and supported thousands of them. I have always dealt with franchisees who are owner-operators, running their own businesses. And, I have found these franchisees to be very special people, totally different from employees and from true entrepreneurs, or investors. Of course, franchisees are unique individuals but, in my experience, they share many characteristics with each other. I can’t say that all my interactions with them have been 100 percent pleasant, but from the very beginning I simply loved them and here is why:

• Franchisees are courageous. They leave the known for the promise of a better future, yet they do it with care and choose a less risky road.
• Franchisees have taught me much of what I know today about franchising, and a lot about life and human relations. My toughest interactions with franchisees always left me with more skills, more knowledge and more understanding.
• Franchisees are compassionate.  Franchisees have shown me unique compassion when I have needed it the most. I treasure those memories.
• Franchisees can connect in deep ways. Perhaps it is the fact that franchisees have to go through personal transformation which places them at an emotional state that gives them a unique ability for deep personal connections. Whatever the cause, franchisees can connect deeply with and care about their clients, their franchisor and other franchisees.
• Franchisees are humble enough to know they need help. This is not always the case nor does it sustain, but at least when they first join the franchise system they know they need to learn a new way. They are not always able to do it, but most of them try.

I guess most people are capable of showing the above characteristics but as a group, franchisees are uniquely strong in all them. So, from the very beginning, they made their way into my heart.

What do you love about franchisees?

Related posts:

1. 3 Things Your Franchisees Expect From You
2. Are Your Franchisees More Interested In Being Right Than In Being Successful?
3. Franchising: a Love Affair by Lizette Pirtle

Understanding the makeup of a franchisee is critical to your success as a franchisor. The first most important thing you must know about franchisees is that they are not like you; they are usually not true entrepreneurs. In fact, in general, true entrepreneurs do not make good franchisees because entrepreneurs are pathfinders and not good followers. Individuals chose to become franchisees to:

• Reduce risk by investing in tested processes and models.
• Have a clear path of action and direction provided to them.
• Belong to an organization.
• Be in business for themselves but not by themselves.

So what’s in their make up? Franchisees are people who:

• Are normally risk averse,
• Need and want direction,
• Desire to belong to a team,
• Wish to own a proven business, and
• Seek to have more control over their destinies.

Does this sound like you? If you are a franchisor, probably not (except for the last point).

People who are considering franchising are searching for an organization to which they can belong; an organization that matches their own value system and that has an opportunity that matches their objectives. Although manifested and expressed differently, their needs normally fall in three categories: need for recognition, need for belonging to a family or team, and need for control of their work environment and decisions about their lives and businesses.

Individuals seeking to become franchisees are generally former middle or senior level employees used to a structured work environment, interpersonal interactions and recognition for their efforts. They are people in transition and as such they are subject to great internal upheaval. In many cases they are the middle-aged people who have been laid off, retrenched or down sized and their egos have been bruised. Fear of failure is a strong emotion in new franchisees.

People who choose franchising are looking for a lifestyle change. Lifestyle quality is measured in terms of: income and what it can buy, control and flexibility over one’s own time and the activities devoted to personal versus business as well as the sense of being your own boss. Franchise companies can foster a greater lifestyle quality by:

• Setting structures that allow franchisees to clearly define and achieve their personal goals without impeding the reach of company goals.
• Matching personal goals with territory size.
• Providing guidelines, direction and leadership within an environment of trust, support and flexibility.

Understanding the makeup of a franchisee is crucial to your success as a franchisor. Don’t make the mistake that many make seeking people like them. Franchisees should never be like you, the franchisor; to be successful franchisees they must be different.

Related posts:

1. Is it true that veterans make great franchisees?
2. Franchisees: Are Your Fears Sabotaging Your Dreams?
3. Do You Know Who Is Your Ideal Franchisee?

Fledgling franchisees and franchisors across the nation have a lot to juggle, from the new financial and time commitments to the potential strain on family and friends. In some registration states such as California, Illinois, Maryland and Virginia, new franchisors have an additional challenge. When they submit their FDDs for approval, state examiners may deem that franchisors can’t take money from franchisees until the initial training program is completed or until the franchise commences operations. Franchisors, however, often have other two options:

• They can put the money in an escrow account, or

• They can purchase a surety bond.

Surety bonds are crucial risk management and mitigation tools that have become increasingly important in recent months, on the heels of new demands for consumer protection. The shock-waves of economic scandals and crisis have made proper bonding all the more important — not just from a legal standpoint but a competitive advantage one, too. Surety bonds can also serve as credibility-boosting agents with prospective consumers. They can also help franchisees set themselves apart from competitors in their sphere.

The Surety Bond Basics
In essence, surety bonds help ensure that companies follow applicable laws and regulations. They also give consumers and other stakeholders a way to seek economic redress in the event they’re harmed. Surety bonds are three-party agreements between a surety company, a principal (the company doing the work or performing a service) and the obligee (the recipient of the work or the entity requiring the bond).

Here’s a quick example. Health clubs, in most states, are required to post a surety bond with the state Attorney General’s office. The bond basically ensures that club members can recoup membership fees if the club shuts down unexpectedly. That’s an important benefit because many clubs charge large pre-paid membership fees. So, if the club goes belly up, members can file a claim against the bond and seek to recover their money.

Why Bonds Matter
Health clubs are one of hundreds of business types and industries that require surety bonds in order to operate legally. It’s important for franchisees to understand the costs and requirements going in. But it’s equally important for them to know the benefits.

Surety bonds aren’t always required for entrepreneurs. But these tools can go a long way toward boosting consumer confidence and creating some separation from competitors. The reality is that stamping the phrase “properly bonded” on a business card can make a world of difference for consumers hungry for protection and beleaguered by financial scandals and a shaky national economy. On top of that, surety bonds can protect franchisees themselves. There’s a whole vein of bonds geared toward insulating business owners from harm in the event their employees commit acts of theft or otherwise harm consumers. These fidelity bonds can be a life saver for franchisees.

Surety Bond Costs
It’s difficult to pinpoint an exact cost for surety bonds because it will vary based on the type of bond you want and your own financial standing. Purchasing a surety bond is somewhat similar to obtaining a loan, in that there’s an underwriting process involved. Surety underwriters will look at an applicant’s credit history, finances and other pertinent information before rendering a decision.

Bond amounts will also change depending on where you live and the type of bond. For an example of New York surety bonds, consider the health club bonds mentioned earlier. A health club in New York state is required to purchase a $50,000 surety bond if it offers consumers a 12-month membership. That bond amount rises to $100,000 for a contract of 12-24 months.

It’s important for franchisees to remember that they’re not shouldering the entire bond amount. Instead, bond purchasers pay a premium, typically 1 to 3 percent of the bond value. That rate will increase for applicants with credit or financial problems. Insurance companies and surety bond carriers can issue surety bonds. Some low-impact bonds can be processed within a matter of hours. Others might require a bit more time.

A Final Note
Franchisees should put together a complete financial application when the time comes to apply for surety bonds. New entrepreneurs can struggle at times to find competitive rates when they lack a significant fiscal record as a business owner. That’s where the franchisor can help make the difference.
At the same time, franchisees should explore all of their options when considering bonding companies. Rates can shift among providers, who will all bring a slightly different underwriting approach to the table. It’s best to shop around for the best rate while making sure to work with a professional, trustworthy surety agent.

To learn more about surety bonds go to http://www.suretybonds.com/edu/faqs/

Related posts:

1. Integrity Health For Women franchises
2. Sustainability of the Franchise Relationship — THE 4 Keys
3. Challenges of Selling the First Franchises

Not all franchise opportunities lend themselves to casual wear, however most do. Of course this is not a strong reason to quit your job and buy a franchise. There are many more important reasons why doing so can be the option you’ve been seeking.

In my experience, there are many traits typically attributed to women that make us ideally suited for franchising. The first that comes to mind is sometimes made into a joke, but joke or not, it is true that most women don’t mind asking for directions. This trait is critical in the success of a franchisee. Yes, I am generalizing, but as women, our egos are usually not so big as to prevent us from accepting when we don’t know something; and thus, from asking for help when we need it. These strengths make women able to fully take advantage of the greatest benefits of franchising.

Franchising is a proven model; that is, a business that has been demonstrated to be successful. In uncertain financial times it is even more important to reduce our risk of failure, and this is exactly what franchising does. Here are three reasons why:

• A franchise business has been proven (to do so the franchisor already made and learned from all the costly mistakes that an independent business owner will invariably make to arrive at a successful business formula.)
• A franchise business has been systematized so most people can easily replicate its success (to do so the franchisor has spent financial resources as well as time and energy developing the operating systems that increase revenue and control expenses; an independent business owner will have to go through the same process to create a sustainable business.)
• Franchisors exist to support and guide franchisees in the successful implementation of the franchise system (they have the experience and expertise to do so; and, the moment they became franchisors their mission changed to one of recruiting and supporting successful franchisees. Therefore, unlike an independent business owner, a franchisee is has someone on her side!

Women who desire to go out on their own will do themselves a disservice if they do not consider franchising as an option. If you are willing to follow a system; if you are willing to learn, work hard and persevere; if you are not afraid of asking questions; if you want the assistance and support of others, then franchising offers significant less risk than going on your own.

Another aspect of franchising that makes it especially appealing to women is the opportunity it presents to work in teams and to make contributions beyond our business. The camaraderie and support of women in franchising is evident in many franchise related organizations. One in particular comes to mind: WEBB (Women Empowered by Business). This organization is the brainchild of Lori Tyll, a franchise executive for FSBI, and Judy Stoleson, a franchisee and former franchise regional developer. WEBB offers webinars and many other learning and support opportunities to women who want to learn more about franchising and business ownership. In addition WEBB is doing a remarkable job at  raising money for the Susan Komen Foundation. Inspired by how many of the lives of FSBI franchisees have been affected by cancer, Lori and Judy decided to make a difference; and these two very special women most certainly are.

What I’ve liked the most about franchising has always been the feeling of belonging to a team and a family which makes it appealing not only to us, women, but also to men. This ability to be independent but to belong to a caring and close network of other small business owners is special when it comes to franchising.

Time to trade those suits for jeans… anyone?

Related posts:

1. Is Franchising a Good Exit Strategy for Small Business Owners?
2. Is the Name of your Business Protected?
3. What’s the Makeup of a Franchisee?

Our beliefs create the world we experience. I see it all the time in my own life and the life of others. Franchise success depends on numerous factors many of which I have discussed in this blog. However, one critical element to success often overlooked is whether or not franchisors hold beliefs that support their success. Here are some of the beliefs that successful franchisors share:

1. Franchising this business is the right thing to do. I have no doubt that I will be successful and that I will give people the opportunity to also reach their financial dreams.
2. One of the most important parts of my job as a franchisor is to ensure that we are always ahead of the game; that our products and services are competitive in every way possible.
3. I want and will make money as a franchisor, but I also want my franchisees to prosper financially and in other areas. I must find ways of reducing their costs and increase their revenue sources so that they enjoy higher profit margins.
4. If my franchisees succeed so do I; and, I will do whatever I can to make that happen. We are a team; our success is interdependent.
5. Competition is a good thing. It keeps us on our toes.

On the other hand, franchisors that can’t seem to make it happen tend to share the following beliefs and doubts:

1. Franchising is going to make me rich. I don’t care whether or not that applies to the franchisees; I know it applies to me and that’s what matters.
2. We must get everything done as inexpensively as possible; give them the minimum support we can get away with.
3. My job as a franchisor is to tell franchisees what to do, to make sure they do it and to take their franchise away if they don’t follow my system, period.
4. If some of my franchisees are successful that proves my system works for everyone. They just need to have the money for the franchise.
5. I am not sure if franchising is going to work. I wonder if I have what it takes to be a successful franchisor.

Beliefs are nothing more than thoughts we repeat over time and with which we identify. They are not bad or good but if unchecked they can sabotage our success.

We take our beliefs as the only truth and unfortunately this blinds us from contemplating new perspectives that can lead us to the success we seek. Some of our beliefs may have half truths in them, some may be correct in some circumstances and not in others; but when we identify with them we normally don’t embrace the possibility that they may not have anything to do with reality. Instead, we search for the evidence to support them and to make us right. The result: we miss the mark. Franchisors who want to succeed will benefit from reviewing the beliefs they hold as they will create their results.

Related posts:

1. What makes a franchisee successful?
2. Are Your Franchisees More Interested In Being Right Than In Being Successful?
3. Do the beliefs of franchisees affect their success?

Whether or not we should, whenever we enter a relationship we have expectations; and, your franchisees are not any different. Franchisees are individuals, and as such, they will have somewhat different types of expectations, yet there are some common ones to which you should pay attention. In fact, one of the most important steps you can take to ensure a positive relationship with your franchisees is to know and respond to their expectations.

1.  Franchisees want to be treated as professionals and as people, not just as a store number or franchise location.

Franchisees want to know you care about them. They want you to solicit and respect their input and to create an environment where they can share. They want to be recognized for their accomplishments whether they are in their businesses or in their lives. They expect you to remember their names and their personal lives. They expect you to care.

2.  Franchisees want to trust you and you to trust them.

Lack of trust is a major factor in poor franchise relations. Your franchisees want and expect open, frequent, and honest communication from you, both formal and informal. Franchisees want you to trust them and to believe in them; and they want to place the same level of belief in you. Lack of, or simply poor quality communication erodes trust.

3.   Franchisees want you to take care of innovation and to be ahead of the competition.

Franchisees want to take care of today which involves operating their business. They expect you to take care of tomorrow through innovation and research. They want you to help them be ahead of their competition through technological, product, and process improvements as well as tools that can increase their efficiency, productivity, and bottom line. They expect you to earn the royalties they pay you every month by providing value to them.

There are many other types of expectations which vary from individual to individual but all franchisees want you:

• To care about them,
• To communicate with them frequently and honestly, and
• To provide value to them.

Related posts:

1. Franchising: a Love Affair by Lizette Pirtle
2. 3 Simple Ways to Create Strong Relationships with your Franchisees
3. What Gifts do Early Adopters Franchisees Offer?

Last month I was interviewed by Paul Segreto on his radio show Franchise Today. During this interview I covered some important topics to consider when franchising a business. This post which I am revisiting expands on the topics I covered during the Franchise Today Interview.

Are you considering franchising your business? If so, start by exploring the questions below. Don’t know where to start?  In this blog you will find many answers so make sure to explore it carefully.  Still lost?  Seek the assistance of experienced consultants, but make sure to check their credentials and talk with their clients before engaging them.

Step 1:  Do Your Homework – Learn about franchising

• Is my business suitable for franchising?
• What does franchising offer me that other methods of expansion don’t?
• Should I consider other growth avenues, or am I restricted to franchising?
• Am I ready to franchise my business? That is, am I ready to assume the responsibilities of a franchisor?
• Do I want to grow a brand new business?
• Am I ready and able to spend the resources needed to franchise my business?
• What value can I provide to franchisees as a franchisor?
• Would I be able to add value to franchisees in an ongoing basis? How?
• What types of problems may I encounter in dealing with my franchisees? Will I be able to respond to them?
• Will I be able to handle growth? What must I do to be able to do it effectively?

Step 2:  Getting Ready – The Financial Projections

• Can my franchisees make a decent living? What will their income and expenses be?
• Is the demand for my products or services going grow in the future?
• What will happen to franchisees during slow economic times? Would they be able to survive?
• What conditions must be present for my franchisees to thrive?
• Will my franchisees make a reasonable return on their investment?
• How will I be compensated for my efforts and investment as the franchisor?
• What expenses will I have to grow the franchise network?

Step 3: The Operations Manual, the Training Program and the Franchise Agreement

• Do I have the systems and procedures in place to make my operations efficient and easy to learn?
• Are these systems recorded in an easy to follow and simple to understand manner? If not, could they be?
• Which systems do I have to create?
• Do I have to automate any portion of my operations? Should I? If so, which one?
• How do I design a winning training program for franchisees? How many days should it last? What should I teach? Who should teach it?
• What topics besides those about running the business do I need to cover?
• Do I need to provide field training? How do I do that?
• How do I choose the best location for training franchisees? What materials should I provide?
• What’s included in a franchise agreement? How will it protect me and how will it protect my franchisees?
• Will my franchise agreement reflect my way of doing business? How much does that really matter?
• Does my franchise agreement provide for multi units? Should it?
• What are regional developer agreements? Do I need one?
• How do I know how much my franchise is worth to a potential franchisee? What about royalties, how much should I charge?
• How do I determine which territory size I assign to franchisees?
• Do I need to comply with any state laws?

Step 4: Recruiting Franchisees

• What should I include in a marketing and franchise recruiting plan?
• How do I generate interest in my franchise offering? How do I get franchisees?
• When can I start marketing the franchise?
• What should I say in my website about offering franchises?
• Do I need a first response brochure?
• How do I collect information from franchise prospects?
• How do I evaluate franchisee prospects?
• How do I conduct the presentation of my franchise opportunity?
• What questions should I ask prospects?
• Are there any questions I should not answer or ask?
• Are there legal constraints around how I present information to prospects?
• Should I use brokers to sell my franchise?

Step 5:   Supporting Franchisees

• How do I help franchisees get started?
• How much do I need to get involved in site selection? What about facility design and outfitting?
• Should I be providing financial assistance?
• Should franchisees buy the equipment and supplies they need from me? What’s the best way to handle these transactions?
• How much guidance do I need to give franchisees so they can open their locations? What about the marketing their locations?
• What services can I provide franchisees and how much should I charge for them?
• Do I include them in my website?

Step 6:   Administrating and Managing the Franchise Business

• What procedures are needed to communicate and manage the relationship with my future franchisees?
• What records do I need to maintain?
• How should I set up franchisee files?
• How do I manage the initial and ongoing training sessions?
• How do I train my staff to communicate with and support franchisees?
• What additional talent do I need to add to my organization and when?
• Where do I go to find people with franchise experience?
• Can I use independent contractors instead of full-time staff? Where can I find them?

Step 7:  Franchisor-Franchisee Relations

• How is the franchise relation different?
• What do I need to do to ensure I have successful relationships with my franchisees?
• How do I get my franchisees involved in the decision making process? Do I have to do that?
• What’s the best method of communicating with franchisees?
• How often should I communicate with them?
• Do I need incentive programs?

The list above is comprehensive but by no means complete; there are many other questions that need to be answered during the process of creating a franchise company. Further, your type of business will have some unique issues to resolve. You do not have to have all the answers before you commence the process, no one does. However, you need to have an understanding of the magnitude of this endevor and the types of issues you’ll have to answer.

There is no question that you have a lot to think about when franchising a company, that’s why the process usually takes between 4 to 6 months to complete and that’s just getting you ready to offer your first franchise. The first three years of the life of your new franchise company will be spent improving your offering and finding better answers to the questions.  Just make sure you find a consultant or coach with the required experience and who cares about you and your business to help your through this process.

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1. 7 Reasons to Franchise your Business

Many people hold some erroneous beliefs about franchising which can mislead them and create a lot of unnecessary pain.

 Myth 1:   If I franchise my business I will make tons of money.

Yes, there is a good probability that franchising a business will result in significant financial gain. But, unfortunately, this is not always the case, at least not in the beginning. To be successful, a franchise must have a viable and sustainable business format (See earlier Blog entry on Sustainable Franchising). It must also be properly marketed so that the franchise network can grow before substantial gains are received.

A company contemplating expansion via franchising needs to be prepared to make a sizable upfront investment. Depending on the initial franchise fee, this investment can be recouped after selling the first few franchises; but the trick is that to sell those first franchises is not as easy as many people think.  (Refer to the Blog entry about selling the first Franchisesfor more information on this subject.) Time and money must be invested to attract the right candidates before monetary gains can be enjoyed by the franchisor.

Myth 2:  If I franchise my business I won’t have to work as hard as I am working now … I can just retire.

In most cases franchising a company will simply change what the owners do rather than reduce their workload. That is, franchising calls for different work from that previously required to run the business; and, while different, it is still work. Moreover, successful franchising requires a lot of effort especially in the first few years. During this time, the founder is in learning mode which calls for a lot of energy expenditure and a strong resilience. However, once a franchise company has the ability to hire an effective management team, the founder can take it easier. In most cases, with today’s technology, all that is needed to run the franchise company from home, a mountain cabin or the beach, is a way to access the Internet and a reliable telephone line. But it takes time to get there.

Myth 3:  Once I teach a franchisee how to run the business I do not have to do anything else for them. After all, they signed an agreement to pay me royalties for a long time.

Many people considering franchising their business are under the impression that because an agreement exists between them and franchisees they do not need to be concerned with innovation and value added services to franchisees. Yes, the franchise agreement exists for the protection of the franchisor as well as all franchisees. Yet, if franchisors do not continually provide value, they will have disgruntled franchisees that will thwart the growth of the company and some will stop paying royalties and other financial obligations. The franchise agreement gives franchisors the right to enforce the agreement and begin legal action against the delinquent franchisees, but this is a costly enterprise. The most effective franchisor philosophy is to thrive to serve franchisees by creating cost savings as well as new products and services that can augment the profits of franchisees and help them become more efficient.

Myth 4:  All franchisees are highly motivated. They have paid a lot of money to buy the franchise; they are going to do everything they can to make it work.

Another fact that can be shocking to a new franchisor is to realize that not all people making a large investment are automatically highly motivated to succeed. New franchisors tend to project their own values onto their franchisees. It can be an unpleasant discovery to find that many people are not self motivated and to be able to succeed they need high degree of encouragement, detailed instructions and a strong support and accountability system.

Myth 5:  My franchisees should have no problem learning the business and doing all that needs to be done to open it and manage it successfully; after all, I am doing so much for them.

Many new franchisors fail to understand that franchisees are not true entrepreneurs; that they are not like them who had an idea and just made it work. Franchisees see the value of paying the franchisor so they can learn and avoid mistakes; they are more risk averse than the founding franchisor.

Some franchisors simply can’t accept that most franchisees will be overwhelmed with all that needs to be done to start the business. They also tend to forget what it was like for them when they first started. The latter is natural, but it is critical for franchisors to understand that the first 3 to 9 months in the life of franchisees are very difficult. During this time franchisees are truly out of their comfort zones and fear prevents them to be at their best.

Smart Franchisors take it slow and are patient. They break tasks down so franchisees can absorb what needs to be done and implement the franchise system successfully. They remember that if franchisees can’t conquer tasks they will feel like failures which creates more fear and prevents them from getting in the mental state that engenders success.

Related posts:

1. Franchising – Federal (FDD) vs State Registrations
2. 7 Reasons to Franchise your Business
3. Franchising: a Love Affair by Lizette Pirtle