The relationship between the franchisor and franchisee surrounds, confounds and many times overwhelms the business relationship envisioned under the franchise agreement between the parties.
In order to create a relationship that works, or as we say at FranchiseMind™ ‘having an effective relationship’, the franchisor must take responsibility for the relationship.
As Al Ritter a world-renowned coach on relationships says, "I’ll take 100% responsibility, you do the same, we can’t miss."
Let’s First Define The Two Important Words Here:
Effective: Successful in producing a desired or intended result.
Relationship: The way in which two or more people regard and behave towards each other.
Utilizing different success metrics, both the franchisor and franchisee seek success from their relationship. How they regard and behave towards each other will determine the effectiveness of the relationship.
The 100/0 relationship principle developed by Al Ritter is to be applied to relationships that are too important to react automatically or judgmentally. It certainly applies to the franchisor-franchisee relationship.
The paradox of the 100/0 principle is that when the franchisor takes authentic responsibility for the relationship, more often than not the franchisee will also choose to take responsibility. Consequently, the 100/0 relationship soon transforms into a 100/100 relationship and this is when great things begin to happen.
The FranchiseMind™ relationship model consists of three parts:
- Achieving business goals.
- Franchisor leadership role.
- Applying the underlying “Influence Factors” that impact the relationship.
Lets take a look at each one of these important parts of the model.
Achieving Business Goals
While the franchisor has goals and expectations of the franchisee, the importance here has to be placed on the franchisee achieving their set business goals.
The franchisee tends to look at these business goals from two perspective:
Achieving Lifestyle Aims
- Number of hours to work in the business.
- Satisfaction from: the type of work, types of employees, types of customers.
- Ability to work with family.
- Balance different life priorities.
Meeting Financial Objectives
- Making desired profits.
- Having the ability to grow the business.
- Having the ability to expand the business.
Achieving business goals is fundamental to the relationship. If lifestyle and financial goals are not met, no matter how great the product, the people, the organization, none of it will matter. As such, irrespective of the franchisee responsibilities outlined in the franchise agreement, the franchisor must take a proactive approach to ensuring that the franchisee meets business goals.
Franchisor leadership, especially senior leadership has a huge impact on the success of franchisees. Somehow, franchisees develop a sixth sense of what is happening at the corporate office.
The franchisor attitude towards the success of the brand and the success of their franchisees is a huge determining factor in propelling the franchisee towards success.
Different leadership styles are required at different stages of the franchise unit’s lifecycle. A franchisor must be aware and flexible in using the appropriate style at the appropriate time for maximum effectiveness.
Passion & Commitment
If the franchisor team cannot demonstrate a strong commitment to the business or an enthusiastic passion for what they are doing, how can they expect the same from franchisees? They shouldn’t. The franchisee is closely watching and listening to what the franchisor is saying and doing rather than paying attention to their own business. This distraction makes them take their ‘eye off the ball’ impacting results. As such, the franchisor must be vigilant in maintaining the correct public posture.
(These influence factors have been adapted from the work of Anthony Robbins)
The six influence factors have the greatest impact on how a franchisee feels thus having a direct impact on the franchisor-franchisee relationship and a corresponding impact on business results.
From franchisee to franchisee the importance of the six influence factors will vary and the franchisor once again has to be alert on the changing priorities of the franchisee at different stages of their business lifecycle.
- Certainty: The franchisee is seeking certainty in the relationship. The business model and associated systems and processes cannot be in a constant state of change or flux. The vision of the brand, the direction, the staff, the suppliers etc. need to remain stable. Stability gives the franchisee a sense of certainty in the business.
- Uncertainty: While consistency is an anchor, the franchisee also seeks a certain amount of positive surprises once in a while to ‘spice up their business life’. New programs, new products, new initiatives, new promotions, new awards are some things that can keep excitement in the business.
- Significance: Franchisees seek significance, importance. They want to know and experience that they are important to the franchisor and to the franchise system. In many ways this creates a sense of self-worth for them. Through both words and deeds the franchisor will need to demonstrate to the franchisee their significance to the franchise system.
- Connection & Love: Franchisees have a need to feel connected and loved (as family) by the franchisor and other franchisees. Recognize them as individuals, as people you care about, celebrate their personal and business special-occasions, celebrate their joys and victories. At the same time be available to listen to their woes, be compassionate and empathetic when they need it but always help them re-focus back on their business. While this is primarily a business relationship, the human interaction cannot be ignored.
- Progress: Us human beings thrive in an environment of progress and success. Franchisees want to be in an environment where both the franchisee and the franchisor are progressing. The franchisor can demonstrate progress by the introduction of new products, new programs, new services, additional employees that support franchisees, new franchisees and new markets being opened.The franchisor must also proactively be involved in ensuring that the franchisee is making progress and growing their outlet.
- Contribution: With their strong identification to the franchise system, the franchisee wants an environment where they can provide feedback, suggestions and ideas for improvement and growth of their business and the entire system. This does not mean that the franchisor has to accept everything a franchisee suggests but rather the culture of the company must allow for contribution by the franchisee. Who knows, the next billion dollar idea may just emerge from this kind of environment.
The franchisor-franchisee relationship is complex and ever evolving. It is the franchisor that has to take greater responsibility for the success of the relationship. It is the franchisor that must embrace the 100/0 principle, giving 100% to the relationship and not expecting anything in return, if done with sincerity, sooner rather than later, the relationship will be transformed into a 100/100 relationship.
At a practical level, with the appropriate leadership style, attitude and passion the franchisor must ensure that the focus remains on the franchisee becoming successful. The success of the franchisee is a pre-requisite for the relationship to take root. However on the long run, the relationship will only blossom if it is nurtured by the six influence factors. In order to be sustained, the relationship must become effective-producing results in a harmonious manner.
I welcome your thoughts.
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 firstname.lastname@example.org.