Top 10 TIPS to MAINTAIN a strong relationship with your franchisees
The franchising relationship: many compare it to a marriage, some compare it to a parent-child dynamic, but everyone knows that it’s one of the most important factors in ensuring longevity and success for your brand. Your franchisees are the most important part of the growth of your brand. They could be your best brand ambassadors or the reason that you can’t acquire new franchisees. Although it’s not the only deciding factor, the success of your brand in a market will depend heavily on the franchisees you approve and the relationships you establish and maintain with them, especially in challenging times. Here are 10 things to consider in cultivating a strong relationship with your franchisees:
Be willing to walk away.
The relationship with your franchisee starts from the approval process before any agreements are ever signed. We commonly hear the phrase, “I won’t work with anyone who I wouldn’t want to go on a vacation with.” While we are not suggesting that you qualify every franchise prospect based on how the two of you would fare through a Caribbean cruise together, it definitely makes it easier when you work with people with whom you share commonalities and/or a mutual understanding. This could be through similar company culture, professional chemistry, an understanding and acceptance of one another’s corporate values or a shared passion for the brand. Are you aligned on values and vision for the brand? Is there a healthy professional chemistry between your groups? Turing down a franchise deal can be a hard pill to swallow for most, or perhaps company policy makes it challenging to do. At the same time, when you spot those red flags from the beginning, going into business with a franchisee who you know is not a good fit for your brand or your company culture could prove more damaging down the line and much more complicated (and costly) to repair.Be adaptable.
When entering a new market, history has shown us that applying the copy/paste method is not always the best way to go, especially for new regional or international market entries. Conducting the proper R&D with your franchise partner to understand where adaptions may be needed on design, menu, product offering, marketing strategies and the rest, will help you find the right balance between staying true to your brand DNA and being locally competitive and relevant in your franchisee’s market. Being open to considering changes to the brand (within reason), so that your franchisee can adapt and thrive in his market, is an important part of the give and take between both parties.Trust their experience.
One of the reasons that a brand chooses to franchise is the opportunity to leverage a franchisee’s experience in their local market. As the brand, your franchisee has trusted and invested in your concept, proven operating system, training program and support team, on which they plan to build a successful business. The brand is trusting the franchisee to follow the system and apply his local market knowledge and expertise to navigate the market as they build the business. It’s not uncommon for franchisees to propose changes to the business or system, based on their experience or market knowledge. If your franchisee wants to apply a change in his market, it’s important to understand why. Before rejecting his request, take a moment to assess local market conditions. How do they differ from other markets where you operate or have operating partners? Why might the suggested change be warranted? How will this affect his local business (positively or negatively)? As a franchisor, it’s your duty to protect the brand integrity and say “no” to suggestions or requests that are unnecessary or frivolous, but the duty of listening to your franchisees and considering valid requests is just as important.Hold them accountable.
Accountability - this one can be challenging at times, but it’s an absolute necessity for franchisee success. Whether holding them to their marketing spend/calendar, not budging on staff training requirements, enforcing audit scoring, conducting business reviews, royalty/ad fund payments or anything else, don’t shy away from the tough conversations. And remember, accountability goes both ways.Go the extra mile with communication.
We are all busy. There are a million things going on and not enough hours in the day to get it all done.We get it. With all of the surrounding noise, it could be easy to let months go by without any communication between you and your franchise partners. When royalties are being paid on time and franchisees aren’t asking you for anything, it’s natural to think that they’re fine, and they don’t need anything – and this may be true. These are the times when the extra mile goes a long way. It only takes a few minutes of your day to reach out and congratulate them on a great month of sales (celebrate the wins), to say happy birthday or even just a quick, “Hi, I haven’t heard from you in a while. Just wanted to check in”. It’s easy for franchisees to get wrapped up in the day-to-day of operating a business and forget about the support system they have, the network they’re part of and the amazing people on their corporate team that they invested into when they acquired the franchise rights. Remind them, when they least expect it.Encourage their entrepreneurial spirit.
One of the consistent challenges that franchisors talk about is ensuring that franchisees to follow the system. The franchisee has invested in a proven system, so why are they trying to do it differently, right? Following the system is a standard key to success in franchising. However, we are not dealing with robots here – we are dealing with people…all kinds of people - ambitious people, creative people, entrepreneurial people. And these people are on the ground, every day, operating your brand and competing in their local markets – markets that are fluid, constantly evolving and different from our own. What if Ray Croc (McDonald’s founder) had told Jim Delligatti (franchisee) to forget about developing the Big Mac and just stick to the current menu offering? Where would McDonald’s be today? Where would the world be today? Instead, Ray allowed his franchisee the freedom to create a burger that would initially fail on its first two attempts (it debuted as the Aristocrat burger and then the Blue Ribbon burger) and only finally prove successful when the official Big Mac launched at Delligatti’s restaurant in 1967. One year later, the Big Mac became a permanent fixture on the nationwide McDonald’s menu. Over 50 years later, we can thank Jim Delligatti’s entrepreurial spirit for this oh-so-coveted burger today. Anyone who’s been in this industry for long enough will tell you that some of the best ideas come from franchisees.It’s not always black and white.
Yes, there is a legal contract in place that clearly spells out the rules, regulations and responsibilities of this relationship, and it’s important both parties to fulfill their responsibilities. With that said, there are occasions where it’s more about the relationship than the contract. For example, your franchise partner, AA Restaurants Ltd., is an A+ franchisee in the 5th year of their 10-year development agreement. They have met their development schedule for the last 4 years, paid all royalties on time, passed all audits with flying colors and have a strong relationship with the corporate team. All of a sudden, in Year 5, they have fallen on difficult times, can’t meet his development schedule requirements, misses royalty payments and can’t cure the default within the legally permitted amount of time. He’s given you 4 amazing years of stellar performance and been a model franchisee. Would you terminate him, as per the contract, and roll the dice to try to find another franchisee who may or may not be able to fill John’s shoes, or would you give John some leeway to get him through this difficult time and get him back to where he was before? If the last year has taught us anything, it's that coming together in difficult times for the mutual benefit of the business and the brand are a crucial part of the longevity of this relationship.Aim to find a win-win.
Like any relationship, there are going to be disagreements and differences of opinion. There is a common goal of success that exists between you and your franchisee. If you share the same goal but differ in strategy on how to achieve it, then it’s time for an open conversation to get on the same page. This does not mean to compromise your brand values or policies in order to appease your franchisee. It’s more about making sure they know they are heard and finding a solution that works for both sides to continue working towards your common goal.Create opportunities to leverage the network.
One of the reasons your franchisees have joined the system is the opportunity to leverage the brand and its network. Many find comfort in knowing that they are a part of something bigger and that they have a support system and network (whether large or small) that they can leverage. Make sure they have opportunities to maximize on this. Monthly newsletters, an online interactive portal, franchisee annual conferences, monthly conference calls, franchisee mentor programs, franchise advisory council (FAC) and regional meetings all provide opportunities to foster communication and interaction between the franchisees and corporate office, and reinforce their connection to the brand, the business and the network.Show them they are valued.
No matter what kind of relationship it is, valuing the other party and showing appreciation goes a very long way. Whether it’s sharing a post about them on social media, honoring them with an award, asking them to sit on the Franchise Advisory Council or Ad Fund Board, sending them a gift of recognition or recognizing them in front of a group, there are many ways to reinforce your relationship with your franchisees by showing them the value of their efforts and contribution.
Franchisees are people or companies run by people - individuals from all different backgrounds and experiences. Some of them are just starting out in the industry, and others have been in it for a lifetime. Like any relationship, there are going to be ups and downs, hard times, differences of opinion and unexpected bumps in the road. Some say, “The best franchise agreement is the one that stays in the drawer, after signing,” and many in our industry would agree that there is truth to this. Maintaining that strong relationship with your franchisees will help instill that strong foundation on which to grow your franchise system. That foundation will be part of what helps you all thrive and persevere through this oh-so-rewarding journey that is franchising.