In a franchise transaction, the relationship doesn’t end at the point of sale. In fact, the relationship continues for the duration of the business agreement. Much like a husband-wife relationship, both contribute to the failure or success of the company. There are plenty of ways that either party can affect the relationship. Here, we will discuss a few behaviors that contribute to the success or failure of the business.
“The most fair and equitable relationships exist when franchisors install their system as promised and franchisees execute it as promised. It’s no more complicated than that.”
Typically the franchisor will keep tabs on the franchisee to ensure success. The franchisor’s main objective in selling a portion of their business to a franchisee is sales. When a franchisor sells a franchise, they are trusting the franchisee to continue as an extension of themselves. They give them use of the brand and trademark. Without proper training, mentorship, and a business model to follow, the business owner is left to figure it out themselves and it becomes their own business.
Good mentorship means that the franchisor guides and coaches the franchisee into believing in their business and business model. Good mentorship requires constant follow up. The best franchises have continual training for their franchisees. Success of the franchisee means success for the franchisor.
Relying on Branding
One of the most common relationship mistakes in a franchise is when the franchisee relies on the branding success of the business and doesn’t put effort into building the company. Most franchise failures occur because the new business owner believes that the reputation of the trademark is enough to sell the product. Often times when this happens, the business owner lets marketing and employee standards fall by the wayside.
Relying on brand recognition is also evident when a business owner completely changes policies and business practice. The reason a person should buy into a franchise is that they believe in the business as a tried and true company, not because they thought they could change the company completely. The reasons customers visit franchises is for consistency. Everywhere they go, they expect the brand to be the same. If it changes, it is no longer the same brand, it just carries the name, and is doomed to fail because customer expectations are not met.
The sale of a franchise is a business transaction and must be regarded as such at all times to ensure success. All too often, business owners let their emotions get in the way of successful business ownership. When businesses have difficulties, it is human nature to blame. The franchisee may blame the franchisor for a failed brand or selling them an already failing business. A franchisor may blame a franchisee for changing practice or sabotaging sales. Either way, blaming is counterproductive to a healthy business relationship.
Franchisor-franchisee relationships depend on trust and honesty between both parties. Both parties must keep promises and communicate with the other party. It is important for both the franchisor and the franchisee to do their homework on the other party and make sound investment choices. Since the relationship is ongoing and success is dependent on both parties, it is essential for both to be committed.
At Sign Me Up Signs and More Franchise, we offer continual training and support to our franchisees to ensure success. We want you to be a part of our team and we want to be the business opportunity you select. After all, your success is our success! If you are looking for a business opportunity, contact us today!