The rewards of the franchise business model are reaped by two parties: the franchisor and the franchisee. The success of one relies on the other, so maintaining a good working relationship is essential.
As a leading coffee franchise in the UK, we’ve seen firsthand how valuable a strong franchisor-franchisee relationship can be for achieving goals and finding ongoing success.
What is the Relationship Between Franchisor & Franchisee?
At its core, this relationship is a partnership, and both sides must uphold what’s required of them to thrive.
The Franchisor: The original company that allows individuals to operate under their name, providing the brand’s trademarks, products, and business strategies, along with the benefits of built-in customer loyalty and brand recognition.
The Franchisee: The entrepreneur who runs the business under the brand’s name for an agreed-upon franchise fee and royalties while still keeping a large percentage of the profit.
Ultimately, the franchisor is responsible for supplying the solid foundation of a franchise business, and providing security and support, while the franchisee is responsible for the day-to-day performance of their franchise store. It is a mutually beneficial relationship that works best when both entities are on the same page.
The Importance of a Good Franchisor-Franchisee Relationship
A good working relationship means good communication. When franchisors and franchisees have open dialogue and a consistent line of communication, feedback and concerns can be shared more easily. This means potential issues can be highlighted by both parties more rapidly, cultivating a culture of trust and proactiveness.
Without a strong relationship, a franchise store will likely not reach its full potential, meaning neither franchisor or franchisee will achieve their business goals.
Here are some of the key ways both sides can maintain a productive franchisor-franchisee relationship.
1. Set Clear Expectations
Exactly what is expected of both parties and their respective responsibilities should be clearly defined during the initial stages of the franchise journey. This ensures new franchisees and the franchisor are on the same page from the very start.
Setting the exact terms without any room for interpretation or misunderstandings will give franchisees the confidence and clarity they need to work towards realistic goals while providing franchisors with the assurance that their brand image and reputation can be upheld.
2. Maintain Open Communication
Both parties should aim to maintain open and honest communication, with regular meetings to discuss performance, changes, or concerns.
Communication channels should be facilitated by the franchisor and made easily accessible to ensure franchisees can get in touch with a representative of the franchise. Equally, franchisees should remain easy to get a hold of and willing to meet with the franchisor when required.
Consistent communication from the franchisor, whether this is through in-person meetings, phone calls and video calls, franchise-wide conferences or regular newsletters and reports, shows a commitment to individual franchisee’s success and builds that vital sense of trust, paving the way for a more trusting two-way relationship.
3. Prioritise Transparency
Another thing that’s at the heart of every good working relationship is transparency and openness. Maintaining direct communication and updates on both sides will go a long way to encourage this.
4. Share Insight
One of the franchisor’s responsibilities is to provide ongoing support and industry expertise. This means maintaining regular dialogue with franchisees about industry-wide trends or best practices that will support a store’s performance, contributing to the overall success of the franchise system.
On the franchisee’s side, this may mean sharing new ideas for improvements or highlighting concerning patterns to show franchisors where they may need to change.
5. Establish Conflict Resolution Procedures
Much of the work establishing and upholding the standards for this business relationship will fall to the franchisor. A good franchisor should have robust conflict resolution procedures in place if the franchisor-franchisee relationship ever does break down.
Having clear procedures ensures any issues can be resolved swiftly and in a way that’s beneficial to both parties. Ideally, conflict resolution won’t be necessary, but this preparation can help protect both franchisees and the franchisor.
6. Live Up to Expectations
Both parties should remain accountable and live up to the expectations set at the beginning of the partnership. Franchisors should be able to guide franchise partners and ensure business consistency while still allowing them the freedoms highlighted in the agreement.
On the franchisee’s part, it means taking ownership of the unit’s daily performance and management. They should work towards the goals agreed upon by the two parties and flag when these may not be realistic, remaining honest about when it may not be possible to meet expectations.
7. Provide Ongoing Support
This is mostly down to the franchisor. Ongoing support in the form of training, updated business practices and regular access to marketing materials is important as it not only bolsters franchisee performance but also makes them feel more valued and builds satisfaction.
Franchisees should take advantage of extra training opportunities or other areas of support – not only to obtain the benefits but also to show their commitment to the franchise system and maintain an ongoing rapport with the franchisor teams.
8. Acknowledge Success
The success of one party is the success of the other, so franchisees and franchisors should acknowledge and celebrate success together. Sharing achievements and progress creates a sense of teamwork and shows an appreciation of the mutually beneficial relationship between the franchisor and their franchisees.
Without maintaining a strong, lasting relationship, franchisors and franchisees won’t be able to build an effective partnership, which is a key strength of the franchise business model.
Here at Esquires, we understand the importance of cultivating a trusting and productive relationship with each of our coffee shop franchisees.
If you’re intrigued and want to embark on an exciting franchise journey in the coffee shop industry, apply today, and our franchising team will be in touch!
