George Cohon, renowned businessman and founder of...
The Franchisor - Franchisee Relationship: How Do You Know if it's Good?
With more than 1,000 franchise brands operating in Canada today according to the Canadian Franchise Association, finding the right one for you can be a difficult task. After you've narrowed your prospective franchise list down by factors such as investment, industry and financial health, it's time to take a hard look at the remaining aspects that set franchises apart, especially the franchisee-Franchisor relationship.
A healthy partnership between a Franchisor and its franchisees usually means it's a good system, so keep reading to discover the signs that things are as they should be in this area.
Franchisees are part of decision-making
Successful franchises know that they are only as successful as their individual franchisees. While the Franchisor is naturally the top decision-making authority, they should encourage and allow for franchisee input. This can take the form of franchisee associations or advisory councils and regular informal requests for feedback and consultation with franchisees. If you can't find any evidence that franchisee’s voices are heard in a brand you are considering, you may want to cross that one off the list.
There are clear lines of communication
Timely and two-way communication is a must in any business relationship, and this is especially true of the Franchisor-franchisee union. Without prompt and clear communication, the franchise system won't function properly. Look for Franchisors who have established communication channels such as telephone, email and conference calls; the more of those you find, the better. The more points of access the Franchisor and franchisees have, the better communication will be.
Training is always available
Naturally, as a franchisee, you should get all the training necessary to set up and run the business you've invested in. The Franchisor should also offer training beyond the initial set so you're able to prepare yourself for things like new products and handle situations that are unexpected, such as poor profits or a sudden market shift. A solid Franchisor will do more than just send home office staff out for compliance visits. They'll offer help and support so you can be successful in the business no matter what changes may come.
The Franchisor offers encouragement
From franchisee awards and incentives to events that foster solidarity in the franchise system such as annual conferences, a good Franchisor will always work to keep its relationship with franchisees on solid ground. A system only works as well as it parts, and the franchise system is no exception to this rule.