Expectations In The Franchisor-Franchisee Relationship

Life is an echo - what you send out comes back
— Chinese proverb

An effective Franchisor-Franchisee relationship is one where the parties achieve the intended results in a harmonious manner.

In order for such a relationship to be created and nurtured, it is important for both parties - the Franchisor and Franchisee to understand and appreciate the goals and expectations of the other party in the relationship.

Lets take a look.

ExpectationsFranchisor-FranchiseeRelationship

Franchisor Goals And Expectations

In a nutshell, the Franchisor expects the Franchisee to follow the plan that the Franchisor has laid out for the Franchisee to run the business and achieve success.

To the Franchisor, success is measured by using several criteria:

  • Delivering a high quality product/service to the customer.
  • Ensuring that the customer receive the intended experience.
  • Franchisee participates in company events.
  • Franchisee extends cooperation and collaboration on all programs introduced by the Franchisor.
  • Franchisee achieves intended financial results.
  • Franchisee provides good validation to prospective franchisees.
  • Increasing sales of the franchise unit.

FranchiseMind identifies four stages in the Franchisor-Franchisee relationship:

  1. Pre-franchisee stage.
  2. Pre-launch stage.
  3. Launch stage.
  4. Operational stage.

In addition to the above mentioned criteria which the Franchisor considers as ‘success criteria’ for a franchisee, the Franchisor has two additional ‘expectations’:

  • Launch stage: During the opening of the business - the launch, the Franchisor expects the Franchisee to learn the business and follow the plan outlined for its growth. The Franchisor does not want a Franchisee to offer suggestions for ‘improvement’ no matter how well intentioned they may be.
  • Operating stage (consisting of 4 phases: Confidence, Ego-driven, Resentment and Inter-dependent): During the last phase, when the Franchisee fully appreciates the inter-dependent nature of the relationship and has achieved success with their own business, the Franchisor hopes and expects that the Franchisee will ‘pay forward’ by mentoring other franchisees.

Franchisee Goals And Expectations

Unlike the franchisor, whose expectations of the franchisee are somewhat similar throughout the relationship, the franchisee has changing expectations at different stages of the business. Lets take a look:

Stage

Expectations

Pre-franchise

Franchisee considers the franchisor to be the expert and as such expects that the franchisor will guide them and help them to achieve success.

Pre-opening

Franchisee continues to have positive expectations of the franchisor. While the franchisee is extremely eager to learn, if they have any experience or expertise in any of the areas critical in the pre-opening stage such as site selection, financing or human resources, as a minimum they expect the franchisor to hear them out and explain to them how their past experience is connected or not connected to the requirements of the franchise system.

Launch

The franchisee expects that at the launch stage of the business everything will go smoothly and business will come at least at the pace of an average unit if not higher. At this stage the 1st cracks in the relationship can appear if the franchisee’s expectations are met with disappointment as it relates to smooth operations and increasing business.

Operating:
Confident Phase

As the franchisee gains confidence with business growth, they begin taking credit for their success and expecting the franchisor to do more and more for them.

Operating:
Ego-driven Phase

With more success, the more the franchisee feels that this success is due to their efforts and not the system and as such their expectations shift to ‘What have you done for me today?

Operating:
Resentment Phase

The franchisee feels that they know the business better than the franchisor. As such, they expect the franchisor to do something exceptional for them, something they are not capable off doing by themselves. Since the predominant thought in their mind is that they don’t really need the franchisor for their success, they place an undue burden on the franchisor to do something significant to demonstrate value in the system.

Operating:
Inter-dependent Phase

Expectations shift as the franchisee becomes more collaborative and recognizes that both sides need each other and each brings value to the relationship. While the expectations for the franchisor to deliver a high value remain they are tempered by the franchisee’s acceptance that not everyone is perfect and as such limitations are acceptable within reason.

Final Thoughts

It is the responsibility of both parties—the Franchisor and Franchisee to develop a clear understanding of the goals and expectations of the other party to ensure that the relationship they have entered into is effective in that it produces results for both parties while maintaining harmonious relations.

While the goals and expectations of the Franchisor may seem straight forward, a Franchisor must remember that those expectations may be a tall order for a Franchisee, especially one that may have never been in business before.

On the other hand, a Franchisee evolving through the various stages and phases of the relationship develops a different set of expectations at each level and makes the job of the Franchisor to decipher the expectations a little complex.

Both parties have great reasons to be in the relationship and need to strive to get to the inter-dependent stage where an appreciations for each other and the roles they play are mutually appreciated.

I welcome your thoughts.


HarishBabla.jpg

Harish Babla, Managing Director of Franchise Mind Corporation based in San Diego, USA.

Harish is a successful entrepreneur, a business visionary, an inspiring franchise leader, a mentor to many companies and a growth strategist who has honed his franchise skills in various capacities since 1983. Harish is passionate about growing franchise companies and helping others achieve their dreams of building successful global franchise companies by ensuring the highest standards of franchise excellence with a strong focus on growth and operating results.

Harish is a Certified Franchise Executive as designated by the International Franchise Association and conducts learning events and mentoring for numerous companies all over the world.

Harish can be reached at harish@franchisemind.com.


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