The franchising relationship between franchisor and franchisee is one of the best examples of interdependence. It all starts with sharing a common set of principles and values. When people evaluate franchise opportunities they’re usually attracted to those companies with whom they share common principles and ethics. This commonality becomes a crucial aspect of their final decision making. Likewise franchisors look for a similar set of values in the prospects they evaluate.
Once the relationship commences with the signature of the agreement, franchisees and franchisors become mutually responsible to each other. The agreement that binds their relationship dictates the obligations and rights of each party, but beyond these legal constraints the franchise relationship only works when both parties recognize that their own success is inter twined with the success of the other part. In other words: franchisors can’t be successful without successful franchisees and vice versa. Truly understanding this dynamic brings about a high level of respect for each other and an equal level of responsibility with both parties assuming the fact that their actions and inaction have significant repercussions for the other party.
Interdependence calls for cooperation, for a sense of community, for interconnectedness. In interdependence there is a sense of equality, a leveling of the field. On the other hand, dependence implies the subordination of one party to the other. Franchise relationships suffer when either party believes that the other is or should be dependent on them, when they treat the other party as a subordinate. Unfortunately some franchisors fall into this trap assuming a position of power. It is true that the responsibilities of the franchisor include protecting all of the franchisees which means that a level of control over the operations is needed and expected of the franchisor. Yet, the manner in which the franchisor carries on the responsibility influences greatly the quality of the relationship with the franchisees. Franchisors have to walk a fine line.
Which kind of relationship are you forging with your franchisees?
Bingo!
Successful franchising revolves around two very important ingredients:
1. Franchises have to love what they do. Being a franchisee (I’ve been one) is hard work. To hit the home run all franchisees want to hit takes risk and lots of rejection. THe only way to survive this is to really enjoy what you do. Be happy = half of success.
2. Franchisees have to make a good profit. As long as your franchise is profitable, you can stay in business forever. If you love what you do, you will. Make Money = the other half of success.
Franchisors who understand this communicate often, bring people together on a tight team and work hard to make sure both of the above are always top of mind.
It’s worth the hard work, too. Franchisees outperform small businesses by a large margin. In my industry, Home Staging, the average Home Stager grosses $40k a year. My average franchisee grosses $229 a year (Item 19 in our FDD.)
It’s worth the work to focus on the relationship!
Thomas Scott
http://www.showhomes.com