Navigating Through Conflicts In A Franchise Relationship

When two parties go into a relationship, disagreements and disputes are inevitable. For franchising, such scenarios will result in a strained relationship between the franchisor and franchisee. Unless irrevocable and severe damage has been done, franchisors don’t want to lose franchisees while franchisees don’t want to give up on their investment. So how can these two reconcile when conflict arises?

Related: Expectations In The Franchisor-Franchisee Relationship


Ask Questions

For everything that happens, there has to be a reason behind it. To gain an understanding of the situation, the most straightforward method is to simply ask the other party about it. But its important to be inquisitive first, not critical or condescending, because the latter just pours oil into the fire.

See The World Through Each Other's Eyes

Disagreements typically arise from a conflict of interests between two parties, stemming from different purposes and perspectives. Franchisors, being the leader of the franchise system, focuses on building the franchise brand with macro-level development that could have transcending effects nationally, over countries or even regions. On the contrary, franchisees focus on unit-level operations, centering within the radius of their local territorial market. Taking the time to understand why certain decisions are made on either parties’ initiative and how it can prove beneficial might soften the blow.

Recognize The Potential For Knowledge

Without the experience of the franchisor, franchisees could easily fall into business or operational pitfalls. Correspondingly, without the local knowledge of franchisees, franchisors could meet with difficulty in implementing local market entry or advertising activities. Looking past the conflict might allow each party to continually tap into each other’s knowledge resources.

Focus On The “Win”

Both franchisors and franchisees go into a business arrangement because of a common ultimate goal - to make money. While this may not necessarily be the only reason, it does contribute to the decisive factor during consideration. Unless one party is being blatantly willful and refuses to talk reason, instead on dwelling on what has already happened, focus on what can be done next to get the original money-making plan back on track.

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