What's The Ideal Relationship Between Franchisor And Franchisee?

by Vanessa Lovie 1st of May, 2024

What's The Ideal Relationship Between Franchisor And Franchisee?

The relationship between a franchisee and franchisor is a vital to how sucessful your location can be. Unlike traditional businesses, franchises are highly dependendant upon the systems of the franchisor, so this relationship is key. Recognizing this dynamic early on when assessing franchises for sale could help you make a better decision.

Franchises are built on the idea that replication and systemisation can lead to financial success for the franchisee and franchisor. The products and services offered by franchises are streamlined and cater to their customers - so no matter where the customer is, they will receive the same product and service. In order for this system to work, everyone involved has to be on the same page.

While there's a host of due diligence to carry out before buying a franchise, what's the ideal foundation for a relationship between franchisee and franchisor?

A Commercial Marriage

When two parties make something great together.

The Franchise Council of Australia explained that the best arrangements start with the right kind of contract. The terms of such an agreement can be over any given time period, but most will typically settle for one that lasts for between three and five years. Its important to have an independent solicitor read over the franchise agreement. Never sign a franchise agreement without independent legal advice who can explain all the terms clearly to you.

These contracts are very important for the franchise as a bad franchisee can impact the wider business interests of the overarching company. There are alot of rules to the operation of a franchise. Consequently the Franchisor also has to be held to a level of standard to prevent the franchisee from suffering from bad management.

There's certainly a balance to be struck, with the most healthy franchise relationships set on shared high standards.

Getting Communication right - Franchising

Getting Communication Right

Communication is often reserved for the digital space in today's world, but Entrepreneur contributor Mark Siebert explained that it's best to have as much face-to-face dialogue as possible in the franchise environment.

If you're looking at becoming a franchisee, assessing whether there'll be direct links with you and those in charge of the parent company is a must. A lack of communication can lead to failure, and those that have a solid network to offer their partners with will be the most effective franchisors.

Effective communication between franchisees and franchisors is a must. Its also good to have positive and engaging communiction with fellow franchisees so you can ask help and get assistance.

Providing Room to Breathe

While the parent franchisor can occasionally step in and lend a helping hand if need be, the quality of any franchise is dictated by the business decisions it makes. MSA Worldwide suggested that it's best to create an environment where the franchisee doesn't feel stifled, and is able to make choices of their own accord.

It's important to remember that there's a contractual agreement at play, but a business is always evolving and a franchisee needs to feel they have an input in some way. Especially if their location starts to suffer for some reason, such as covid-19 lockdowns or a road re-development.

Getting Enough Support and Guidance

The franchisor should provide ongoing support and guidance to franchisees, including training, marketing support, operational assistance, and ongoing communication. Franchisees should feel supported in all aspects of running their business. If a franchisee is left feeling uncertain and not sure where to go to get the answers, this can lead to lack of trust and support.

If all franchise locations are to flourish, franchisees need to feel supported and connected. So evaluate the training and whether their are additional fees and what the attendence requirements are. You want to be sure that not only you are receiving adequate training but that all franhisees are on-board.

So Where Should You Start When Buying a Franchise?

Overall, a strong foundation for the relationship between franchisee and franchisor is built on trust, communication, support, and a shared commitment to the success of the franchise system. When both parties work together collaboratively and respectfully, it creates a positive environment for growth.

If you are looking to buy a franchise, talk to other franchisees, ask them about their experiences. Get online and do some research. You want to know what current and past frachisees are saying. Ultimately the decision to buy a franchise needs to be backed up by a thorough due dilligence completed with the assistance of professionals.

Tags: franchising franchises for sale franchises