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The Franchisor-Franchisee Relationship

In a franchisor-franchisee relationship, both parties have to walk the fine line between doing what seems best for themselves and what's actually best for the relationship.  And this should start even before the relationship formalizes.  When negotiating the contracts that set up the relationship, it's important for the franchisor to remember that the franchisee is going to be the one running the store, restaurant, gym, or whatever it may be.  Likewise, it's important for the franchisee to realize that the franchisor has a larger business to run and likely has seen franchisees both succeed and fail.  It's important for each party to remember that the other isn't an adversary.  Concessions may well need to be made in contract drafting, but at the end of the day, both the franchisor and the franchisee are reliant on one another.

The best franchisors will institutionalize the hockey stick effect by working with franchisees from day one to begin growing their businesses. A brand’s field support team should not just be policemen, looking out for errors or missteps made by underperforming locations.


business digest, investor finance