Written by Faraz MJ                                                                                  April 7th, 2021

The franchisor-franchisee relationship is unique and requires effort from the two sides.

You can understand the relationship between a franchisee and a franchisor with the help of different forms or arrangements like a parent-child relationship, professor-student bond, marriage, etc. Actually, with any organization, it requires effort from the two sides to make it work.

Both parties have specific duties and depend on one another for progress. They are limited by the particulars of the franchise arrangement, which are explained and settled upon before a franchisee gets training and gets started.

The franchise arrangement is a lawfully binding record between the franchisor and franchisee and is signed only after the franchisee has had at least 14 days to audit the franchise disclosure document (FDD). There is a valid reason the 14-day rule is in effect. The FDD is a completely tough read. A massive, intimidating document, it reveals broad data about the franchisor, including a franchisor's commitments to the franchisee and the franchisee's commitments to the franchisor.

The data in and FDD is separated into 23 classes called "items." These things ought to be examined cautiously by a proposed franchisee before signing the franchise. Surprisingly, many planned franchisees avoid the FDD and are shocked later on when they hear they are liable for specific things (which were explained in the FDD), like paying specific charges or using only authorized sellers, for example. The FDD secures both parties and gives transparency when it comes to each party's duties. A franchise lawyer can assist you with understanding the better points of this colossal read.

With a franchise, you are investing in your own business and getting bound up with an organized brand, which usually follows training, support, and different advantages. In return, the franchisee is expected to work the business by following the franchisor's playbook, As described in an activities manual given by the franchisor.

So what makes an excellent or undesirable franchisee or franchisor?

4 Tips for Building Great Franchisee/Franchisor Relationships :

1. Research:

Doing your research is the first and most significant tip to building an extraordinary franchisee/franchisor relationship. Why?

Since research will assist you with deciding whether you're mutually a good match to go into a business association with. Doing your research will also assist you with understanding what the franchisor's relationship with current and past franchisees is like. Questions, for example, such as whether or not the franchisors have at any point been linked with a lawsuit with franchisees, and what it was about, help tell a tale. 

Your research should include meetings with current and past franchisees, data which is commonly simply found on the franchise website and in the Franchise Disclosure Document (FDD).

The franchisor will also research you with a similar aim of determining. What kind of relationship they might be going into with you. They will generally do a record verification, and study your own and financial background to ensure you're a solid match for the organization's brand.

2. Clear Communication and Trust:

In a franchisee/franchisor relationship, openness is of the most importance. All associations try to improve communication, and this can be hard for franchisors that need to give data to independent business owners across a broad network.

The duty of communication doesn't fall only on the franchisors. Should you become a franchisee, it is also your responsibility to put effort to keep updated on the thing that is being communicated from the corporate office. Most franchise associations will have online communication access that is used to store and scatter inward data and resources. Most will also deliver a month-to-month newsletter to highlight the significant data and updates in the entry.

Some make communication a couple of steps further with periodic webinars, peer meetings, and in-person meetings. Every one of these channels is created to give franchisees the data they need to run and develop their organizations effectively. They take a lot of time and care to put together, and it will be to your greatest advantage to keep refreshed with this data.

On the franchisor side, opening a two-route line of communication is to the greatest advantage of everybody. When franchisors can get bits of knowledge and new accepted procedures from the field, they can use the resources of the whole franchise corporation to test it and afterwards carry it out to other franchisees—therefore improving the probability of success for all. This is only one of the specific benefits of putting resources into a franchise corporation that offers exclusive regions. This way, franchisees are not in rivalry with one another. Instead, they are sharing accepted procedures and instructing to help everybody.

3. Emotional Intelligence:

The capacity to react to any circumstance with emotional insight is significant on both ends of the franchisee/franchisor relationship. There might be times all through your tenure as a franchise business owner when emotions run high. You may be caught up in a “bandwagon" movement among a group of franchisees. Or on the other hand, the franchisor may carry out another initiative that you are not in favor of. 

Then again, you may end up in situations where your business is performing very well, while others might be battling with a variety of business or monetary problems.

Being capable to navigate any kind of situation with a great level of emotional intelligence will eventually help you in your business, just as in your relationships with other franchisees and the franchisor. Ensure you're reacting thoughtfully, instead of responding emotionally, to successes and difficulties that you find yourself in.

4. Commitment and Accountability:

The importance of understanding and possessing responsibility and accountability on each side of the franchisee/franchisor condition is an important part of building a good relationship.

Sometimes, franchisees go into a franchise agreement with unreliable assumptions for what the franchise corporate office will give. Then again, there are times when the franchisor doesn't set those assumptions properly and all things realistically. Oftentimes, it is in the zones of franchisee/franchisor commitment and Accountability that the requirement for open communication and emotional intelligence is highest!

From your research, you ought to have a smart thought of which territories of the business you are responsible and accountable for versus the franchise office.

 At last, with regards to buying a franchise, you are an independent entrepreneur—for certain guardrails introduced to secure the brand and product/services quality.

 Ensure you are prepared to own and perform these duties before choosing to buy.

The franchisee/franchisor relationship is a basic achievement factor for your business, just as for the franchise corporation as a whole. Building and keeping up this relationship is a two-way road and requires respect and effort. 

As in any relationship, things will not regularly go easily. Having the option to deal with your relationship with research, open communication, emotional intelligence, and a clear understanding of responsibility and accountability will provide great outcomes for you personally and your business.

Problematic relationships

Many situations may prove to either build or break the relationship between a franchisee and a franchisor. Let us have a look at these circumstances.

Franchisee mistakes

Changing the logo/branding:

The force of branding is solid, and it's one of the primary reasons people invest in franchises. A McDonald's franchisee, for example, can't simply change the golden arches to blue. Consistency is key for solid branding. 

Adopting a weak strategy:

This may appear simple; however, possessing a business requires effort. You need to work on it. Since you're becoming joined up with a proven system, there's no assurance of success. In certain brands, particularly locally established ones, it is on the franchisee to get out and hit the pavement to create a business. 

Without a physical place, by what other means would potential clients realize the business even exists? If the franchisor suggests approaching nearby entrepreneurs, promoting on announcements, or if, using guerrilla marketing strategies, there is likely an excellent explanation. There is likely a very good idea. If you're buying into a proven system.

Straying from the plan of action:

It would appear to be insane for one Dunkin' Donuts store to offer back massage administrations and another to serve tacos. Franchisees can't simply change the plan of action immediately. It's conflicting and detracts from the brand's integrity. 

Franchisor mistakes

Understaffing the support group : 

Explosive development is amazing in a franchise brand; however, support is the way to upbeat franchisees. Ensure the size of the corporate group is by the number of franchisees. Ask current franchisees if their interests and questions are being addressed and if they feel supported and appropriately prepared. 

Selling franchises without appropriately reviewing applicants:

Vetting is pivotal for finding a quality candidate. Franchisors who aren't exacting regularly address the cost with a powerless system. Search for franchisors who are specific about franchisee selection. If the franchisor is offering franchises to simply anybody as opposed to granting domains to a picked not many, that's a red flag.

Resting on their laurels:

Franchisors ought to consistently look toward what's to come. Brands that accepted innovation early were prepared and ready to remain in front of the pandemic. Hope to put resources into a franchise that makes progress toward consistent improvement and that qualities advancement and forefront innovation.

Any Query?

Get yourself registered at https://www.franchisebazar.com/entrepreneur-registration or call on 9844443200 for further help and inquiry.