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The Franchise Relationship

When successful companies expand through franchising, they forge special relationships with their franchisees. Each party recognizes they can achieve more working together than they can working separately. The franchisor is seeking highly motivated and talented individuals to assist in the distribution of the business' products and services. At the same time, the aspiring business owner is seeking affiliations with successful companies with proven business concepts. The relationship recognizes that franchise companies focus on ensuring the future, while franchisees serve the current needs of customers each day.

The relationship is contractual in that a formal legal document commonly referred to as a Franchise Agreement establishes the obligations and rights of each party as well as all other terms and conditions. However, most importantly, the parties accept that one cannot prosper without the other also prospering; they recognize they have entered a classic win-win relationship.

In this special franchisor/franchisee relationship, the Franchise Company has contributed the entrepreneurial spirit, which embodies the time, energy, effort, money, and most significantly, the risk of creating, testing, and refining a successful business model. The other party, franchisees, wanted their own businesses but, for them, reducing the possibility of failure was pivotal in their selection of business opportunity.

As in all cases where parties form alliances, each enters the relationship with unique expectations. The eventual success of the franchise union depends on how these expectations are ultimately met.

Franchising companies are focused on expanding the sales of their products and services and judge individuals as potential franchisees based on how well they will contribute to the company's mission. Individuals are more singularly focused on learning how the franchising relationship will contribute to their individual success.

During the franchisee-recruiting period, companies and prospective franchisees judge the other's capability to contribute to their dreams and missions. From the very first introductions, both parties begin addressing the issues important to them. Thereafter and throughout the recruiting process, the parties discern the abilities of the other to fulfill these expectations. Only when both parties conclude that a franchise union will satisfy their interests are franchise agreements entered into and the franchise relationship begins.