Developing Positive Franchise Relations

Published on February 15, 2017

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Franchise relations is a term used to define the state of the relationship between a franchisor and its franchisees. In addition to growing the franchise network and increasing sales and profits, building positive franchise relations is one of the more important activities that franchisors deal with.

Here are the components that go into building a strong foundation for positive franchise relations. Without these elements a franchisor will be constantly dealing with unhappy and disgruntled franchisees.

  1. The franchise must provide each franchisee the opportunity to achieve their financial expectations. If franchisees are not successful, the franchisor will be faced with franchisee turnover, litigation and other problems. Although franchise programs should be constructed so that its franchisees are financially satisfied, some franchise programs allow no margin for error. The franchisor must have a way to gauge the success of its franchisees by surveys, collecting income statements and utilizing other ways to evaluate franchisee results.
  2. Franchisor senior management should obtain feedback from their franchisees and listen to their concerns by putting put ego aside. If a franchisee has a legitimate complaint and can’t communicate it to franchisor management and receive a reasonable response, then it can lead to dissatisfaction. It’s may not be necessary to have a F.A.C., especially for smaller franchise companies, but there had better be a process in place to obtain franchisee feedback.
  3. There should be a process to monitor franchisee satisfaction through field reps, surveys, meetings or conference calls. The greatest mistake a franchisor can make is to be out of touch with its franchisees.
  4. A number of franchisor CEOs have a process for staying in touch with select franchisees. Even in a large system there should be a way for the franchisor leadership to maintain contact with certain franchisees and know what is taking place within the network

Positive franchise relations are an important part of a successful franchise system. Following the steps that I’ve outlined can establish a foundation for positive franchise relations.

 


About the Author: Ed Teixeira
Ed Teixeira is a recognized franchise expert with over 35 years experience in the franchise industry. He has served as a corporate executive for franchise firms in the retail, manufacturing, healthcare and technology industries and was a franchisee of a multi-million dollar home healthcare franchise. Ed is the author of Franchising From the Inside Out and The Franchise Buyers Manual. He has participated in the CEO Magazine Roundtable Meetings with business leaders from around the country and spoke at a number of venues including the International Franchise Expo and the Chinese Franchise Association in Shanghai, China. Over the course of his career, Ed has been involved with over 1,000 franchise locations and launched franchise concepts from existing business models. Ed can be contacted at 631-246-5782 or ed.teixeira@franchisegrade.com.
23.05.2016 effective leaders ed full

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