Couple of weeks ago I was asked about the importance of business relations. My answer is definitely a big YES. Start-ups and so with mature establishments, relations are vital. In fact companies heavily invests on having Customer Relations Management.
Franchising is no exception. The relations begin between the franchisor and franchisee. The handshake is a sign of acceptance and start of the relationship.
As in any relationship there are stages, which both parties undergo.
Honeymoon Stage: From the time the parties signed the Franchise Agreement, they will be in a getting-to-know-each-other mode. The agreement must be thoroughly understood especially by the franchisee. It is a contract, which contains details and obligations by both parties. This is where the franchisee abides as well as the franchisor in building the relations. This includes having the initial training, hiring of employees, construction, and initial operation of the business.
Adolescence Stage: Having operated for several months, the franchisee learns the business. There are now questions on various areas from the delivery of goods, type of training to the frequency of visits of the franchisor or his representatives. However the franchisee still adheres to the standards of the company.
Independence Stage: Reaching this stage, the franchisee may be always questioning if the franchisor is the right company to deal with. Operating the business for some time, the franchisee feels he or she can independently manage. The franchisee gets to feel that running the business is all because of the efforts exerted.
Resolution Stage: This is where the franchisee may begin to think of doing the business by him. There is no need to have neither the franchisor nor the franchise. Business may be good and everything appears to be operating. In franchising, what is being carried by the franchisee is the BRAND and systems established. Consumers would patronize a business with major chains. The franchisor has to draw the line. There are franchisors and franchisees that were able to discuss and plan for a much better relationship. The franchisor that fails to align everybody within the system may have difficulty in ensuring the sustainability of the brand. If on the other hand franchisee thinks and feels of independently managing the business, then the franchisor has to let go. There are things which franchisee must be aware. This is the non-compete clause in the agreement. Simply it refers to avoiding being in direct competition for certain number of years.
How can then relations be strengthened?
1. From the side of the franchisee, understand, clarify and document issues, which may arise. Keeping quiet and taking things for granted may lead to bigger consequences.
2. Establish a good working relations with the representatives of the franchisor. In franchise, there are people called field support. They cover from the operations of the branch, training and development of branch employees, advertising and promotions and research and development. A visit of any of the representative is important and issues are to be addressed.
3. Reread and understand the Franchise Agreement. Often due to the nature of the business, the role and obligations of both parties may have been forgotten. If and when there is a need for assistance, always alert the franchisor. There are franchisors where a direct line is provided.
4. From the side of the franchisor, select, train and constantly brief the staff assigned to service the franchisees. They must be made to understand that franchisees are partners and independent business people. They are never to be seen as employees of the company. It must be remembered too that there are different needs of each franchisee. This may be according to the locations and as well as the culture.
5. There will always be things to be solved or planned. What may be vital is to keep an open line of communication. There are people who believe that merely sending SMS or Text to each other is sufficient. I beg to disagree. Franchisor and Franchisee must have a face-to-face meeting. The frequency can be twice a year. There are set talking points sent ahead of time. There are companies who set a yearly general conference for all the franchisees. Briefing can take place on the directions as well as strategic moves.
Remember that by definition of Franchising, it is to be in business for yourself BUT not by yourself. The relationship is to strengthen each other to bring out the best for all. Oftentimes, I refer to this as having a Synergistic RELATIONSHIP.