February 16, 2016

Franchise Management: Understanding Franchise Conflict

Franchising your business requires discipline, brand management and a consistent focus on maintaining franchisee goodwill throughout the system.  As a franchisor it requires a careful understanding for where your franchisees are in their lifecycle within the business model.  Working with franchisees to provide value given their experience and know-how as opposed to providing a blanket approach where one size fits all typically will provide the best results for a franchise brand’s growth. 
We typically see the franchisee growing in different stages:
Dating:  Lots of love in the air, passion, excitement and visions of grandeur.
Honeymoon: Discovery Days, Business Planning, FDD reviews and getting the relationship formalized. 
Infancy: The Baby is here, our lives have changed. 
Teenage Years:  Franchisee is learning how to be independent and they don’t like you.
Adulthood:  Established, set and optimal condition for growth within the system. 
Retirement: Slowing down and looking for potential exit strategies

In order to provide solid support and training, you need to have a good foundation for the franchise model to start with.  Making sure you have a solid franchise agreement and appropriate legal foundation allows you to manage the franchise relationship effectively.

“Good Fences help make Good Neighbors?” For a franchise relationship to be effective and manageable, the franchisor needs to have the appropriate and well defined relationship in place within the franchise agreement.

– Us the Agreement to your Benefit.
– Don’t Abuse

Although franchisees are independent business owners, they must operate under the terms spelled out in the franchise agreement. The franchisor has the responsibility to ensure the franchisee is adhering to the agreement, which typically covers areas such as operating procedures, use of trademarks and logos and allowable marketing procedures. If the franchisee violates the agreement, the franchisor can take necessary actions that are spelled out in the agreement.

Franchisor / Franchisee Conflict Management:
1.Acknowledge you made a mistake.
3.Take action with an acceptable temporary solution.
4.Make a promise to resolve the problem or get correct information.
5.Keep the promise.
For more information on how to manage your franchise system, email us – [email protected]

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