Building the Best Franchisor/Franchisee Relationship Possible

We have all heard the expression to be married to one's work. In the case of franchising, it is an accurate analogy. Entering into a franchise agreement is a serious decision, involving a lot of time, energy, and resources.

A franchisee/franchisor relationship requires an ongoing commitment, with each party expected to uphold its end of the bargain through active communication, common goals, and mutual respect. Some people think that prenuptial agreements mean you are planning for the worst but just as in business arrangements, sometimes contracts are a necessary evil. The idea is that if you have to refer back to the contract, the relationship has gone off track. In order to prevent either party from pulling out the contract, both the franchisee and the franchisor need to understand and carry out their respective roles under the agreement. The ability to do this revolves around sharing a vision, maintaining professionalism, support, training, and open communication.

Most franchisee/franchisor relationships that do not work out result from a franchisee misunderstanding the franchising model and the franchisor failing to set expectations and/or the franchisee not understanding them at the outset. A common mistake is when franchisees view their position as a traditional entrepreneurial endeavor. Franchising provides the opportunity for business ownership under an established brand name and existing operating standards. Franchisees typically do not have creative autonomy to make changes to the way business is conducted. Sometimes franchisors make the mistake of viewing franchisees as customers, rather than as partners who share the common goal of growing brand loyalty.

These pitfalls can be avoided from the beginning by the franchisee and the franchisor asking the right questions of each other. Franchisors should inquire about a prospective franchisee's desire and ability to conform to the franchisor's business model and operating systems, and the franchisee should thoroughly review the company's finances and business plan, as well as talk to existing franchisees about their level of satisfaction with the franchisor.