Importance of the relationship between the franchisor and the franchisee
Establishing a successful franchising business, and maintaining it on a long term basis, requires a good relationship between the franchisor and franchisee. When the franchisor transfers the responsibility of a business unit to the franchisee, the idea should not just be about making money. The franchisor should be able to make the franchisee aware of the principles, ethics and values of his company. This is a very critical aspect as most franchise businesses fail due to this lack of business connect.
Once the ‘connect’ is established and the core business values match, it will be easy to take the relationship forward. Here are some critical factors which will help establish a long term relationship in a franchise business.
- Clear communication channels between the franchisor and franchisee
- Understanding of the business by both the parties on the same level
- A sense of ownership of the business should be imparted to the franchisee
- Regular monitoring, clarification and matching of business objectives
- Establishing mutual trust and credibility
- Ethical business transactions
- An association based on transparency and candor
- Alignment of the franchise with the core company
- Striking a common ground on the business objectives and goals of the franchisor and franchisee
- Advise each other on growth strategies and about how to improve the functioning
- Constant motivation and encouragement towards building a profitable business benefiting both parties
Profitable, smooth running of the business demands commitment from both the parties and a strong relationship will help in ensuring the same.