Conflict avoidance in a franchisee-franchisor

In spite of all the dos and don’t s, it still happened and now it’s threatening to blow away your business. Typically this is how conflicts take place in a franchisee- franchisor relationship. Such conflict can often lead to a termination of the franchise contract, hence shatter your dreams. In such cases it if often advisable to keep your emotions aside, and deal with logic. In such a dynamic business, conflicts are inevitable. Today, we give a few tips in order to avoid conflict.

• Business partners It is very important that the franchisee and the franchisor view each other not as individuals in isolation but as business partners. This view results in mutual benefit. It is important that both the parties work in tandem with each other. Only a holistic and an all-encompassing approach can lead to franchise success.

• Interact!! It is very important that the franchisee and the franchisor interact on a regular basis. The franchisor should try and understand what the franchisee expects from him and vice-versa. This can be done through scientifically administered questionnaires and also through one-on-one interviews. Both should try and understand each others needs and expectations. This helps in establishing a strong relationship.

• Generate ideas together Research suggests that most of the successful ideas prevalent in the franchise system are put forward by the franchisee. Since the franchisee is in direct contact with the consumer, they often have an insight which the franchisor doesn’t. Hence the franchisor should let the franchisee participate in the development of the business. For this it is very important for the franchisor to LISTEN to the franchisee.

• Constant monitoring The franchisor should insist on getting periodical reports of the franchisees business. This will help the franchisor analyze areas that need to be improved and then he can use his expertise to deliver solutions. Even the franchisee needs to be aware of all the changes that are taking place within the franchise. This can ideally be done by publishing an in-house magazine for the franchisees.

• Rights and Obligations In order to avoid conflict, it is essential for both the parties to be aware of their rights and duties. These should clearly be stated in the franchise contract. Also both the parties should hire a lawyer and sign the contract only when all the terms and conditions are acceptable to them.

• Communication An oft-repeated yet the most ignored point. It is very essential to have an efficient communication network.