What's The Ideal Relationship Between Franchisor And Franchisee?

by 29th of October, 2015

Buying a well-established business can be a great way to negate some of the risks associated with starting an endeavour from scratch. Moreover, looking into franchises for sale can offer even more security due to the fact that the business is backed up by a larger overarching story of success.

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?

Most franchise contracts will stretch across three to five years.


A commercial marriage

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.

In that time, the most important factor to establish is mutual respect. A bad franchisee can impact the wider business interests of the overarching company, while a poor franchisor will have little direction and may even let quality control suffer.

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

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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.

Providing room to breathe

While the parent company 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, and ensure that each entity is allowed to operate as its own business first and a collective second.

Ultimately, buying a franchise can certainly be a savvy decision, and provide an extra safety net for those who may not have a huge amount of experience running a business. However, while it may be a touch easier to achieve success, that's only possible after establishing a solid working relationship between franchisee and franchisor.

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