Franchising is not just a relationship business.
While it is a popular cliché most speakers say that franchising is a relationship business between the franchisor and the franchisee, it goes beyond just mere partnership and the gesture of pleasing each other. After all, we should be guided with another popular cliché, WIIFM (“What’s In It For Me’) and exert efforts to ensure both parties achieve their individual objectives in signing the Franchise Agreement.
Mutual Benefits for Franchisor & Franchisee
We recall the basic relationship why the franchisor and franchisees enter into a business partnership through the franchise agreement.
- The franchisor expands his successful and years of proven business model through other people’s Organization, Time and Money.
- The franchisee uses the proven business formula and take advantage of the strong brand name of the franchisor in serving & penetrating a continuing need of the local market.
Both parties should be clear about what one has that the other party needs. Beyond doubt, each party should be able to establish their strengths and what they’ve got that the other party is excited to partner looks for.
What Can Hold Them Together?
There are 3 circles we should try to address in trying to sustain an exciting and sustainable business relations among the 2 parties, namely:
There can be a long list of franchisor objectives with respect to its vision, mission and strategic directions however not all of these may appeal to the franchisees. On the other hand, out of the countless personal and business objectives of the franchisees, only a few of them may be relevant or can be achieved through the franchisor’s business concept. Both parties should recognize the common areas they can work together as a business partner.
However, to keep the business going, both of them should ensure they offer products and services relevant to the customers that (only) their business concept are serving. The check mark on the common spot, if properly defined and deliberately worked upon, is the Win-win spot that can sustain a long term business relations to both parties.
Understanding the Perspectives
If the franchisor is not able to recognize the franchisee’s perspectives and interests, the franchise company would likely just implement programs with various degrees of reactions from the franchisees. Worse, we hear a lot of stories where in a Franchise assembly, conference or meetings, franchisors are barraged with a lot of resenting concerns from franchisees. I have attended a meeting that seemed like a bull-session.
A quick capture of the diversity of the stakeholders’ perspectives
It is a challenge to the franchisor to take the initiative to discuss the above openly with the franchisee. This may be done in formal workshops or can be a good agenda in an informal yet personal dinner meeting with the franchisee in the course of field visits of the Franchise Operations Manager.
Famcor is the pioneering business consultancy in Cebu that specializes in long-term hand holding programs such as preparing family businesses for expansion through franchising. Beyond the common practices of today’s business consultancies in Cebu and other regions, it is Famcor’s thrust to ensure a proper franchise growth from start to finish, and that includes establishing clear relations between entrepreneurs and their franchisors or would-be franchisors. In a landscape where—more often than not— business is personal and family businesses face the growing expansion question, the need for these open conversations have never been more vital.
Let’s talk about growing your business. Leave us a message at firstname.lastname@example.org!
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