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Establishing Processes for Maintaining Good Franchisee Relations Starts at “Home”

By Mark Siebert, CEO, iFranchise Group

The post-pandemic economy has not only introduced us to a whole new lexicon, including “the great resignation” and “quiet-quitting,” but also new management realities, such as allowing people to work from home at least part of the work week.

And while most of these trends address workers in office settings, franchisors should be cognizant of them when setting up protocols for maintaining franchisee relationships –especially since they need to have an effective support staff at headquarters to service franchisees.

Running a business has become more of a challenge post-pandemic, due to a shortage of workers, higher wage demands, customers’ lingering fears of large group settings, inflation and disruptions in the supply chain causing shortages and higher costs for goods and services. A franchisor’s “parental” role calls for setting a good example and helping set up systems for dealing with change and unprecedented market conditions.

Franchising is not like a traditional employer-employee relationship, since the franchisor-franchisee relationship is governed by a contract and franchisees don’t serve at the pleasure of the “employer.” The franchisor cannot hire, fire or discipline the franchisees’ employees. But that doesn’t mean franchisors can ignore what their franchisees are experiencing.

These same challenges may be impacting the franchisor’s ability to offer services to its franchisees, since they may be having trouble hiring enough field reps to keep that critical portal of two-way communication open. It’s important to have a “real person” answering calls from franchisees, and as a franchisor, reaching out personally to franchisees to check in on them and offer solutions goes a long way to establishing and maintaining a strong bond.

Since franchisors are responsible for maintaining the brand, it’s paramount that they set up systems and procedures to streamline operations, that their system documentation and operating manuals are continually updated and distributed effectively to franchisees, that they continue to innovate with new products and/or services and establish best practices so that franchisees continue to receive value and while the brand continues to evolve to meet market needs.

Strong leadership is a touchstone in the franchise relationship, but in these trying times, providing a sense of security is paramount. Lead, but allow input from franchisees. After all, they are the ones in the trenches dealing with customers every day. Set up effective franchisee advisory councils and listen to their input and implement when you deem it in the best interest of the system. Nothing creates more dissatisfaction than asking for input and then routinely ignoring it. So, while you should absolutely reserve the right to make the business decisions you believe are in the best interests of the company, if you are rejecting the input of franchisees be sure to explain the business case behind your decision.

This also applies to ensuring the franchise support team, from marketing associates to field reps, are top notch and living the culture you as the franchisor have established.

Be transparent; don’t make franchisees guess why you’re asking them to add new products, discount popular products or change vendors. If you’re transparent, franchisees will have less opportunity to speculate and repeat hearsay to others in the system, and they’ll more than likely buy-in to the proposed changes.

As a good franchisor, just like any good “parent,” you should:

• Set reasonable boundaries;

• Deal with franchisees, not as equals, but as professionals;

• Follow through on what you say you’re going to do;

• Keep in regular contact;

• Be proactive.

Despite the current challenges, now is a perfect time to take stock of how well you are, as a franchisor, maintaining your franchisee relationships. Turn to experts in the field to help determine if there are ways to improve your communication, if there is a need to update your system documentation, if your support protocols are best-in-class, or if other changes can help you improve your franchisee relationships.

The upside of all this is that happy franchisees are your best bet for ensuring system growth. Well-supported franchisees who joined you in year one may be ready to add new units by year three or four, will ultimately pay more royalties, and will be less prone to litigation. So, maintain solid relationships and give your franchisees a system they’ll want to grow with. And don’t forget: satisfied franchisees are your best “salespeople” for selling new franchisees, as well.

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Mark Siebert is CEO of the leading franchise consulting firm iFranchise Group. Reach him at 708.957.2300 or info@ifranchisegroup.com. His book is Franchise Your Business: The Guide to Employing the Greatest Growth Strategy Ever.

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