Whether you’re attracted to franchising for the brand recognition, existing customer base or strong support network, none of these benefits guarantee your success without a healthy franchisor and franchisee relationship. In this article, we are going to consider five tips for maintaining a healthy franchisor and franchisee relationship, then we’ll provide 20 questions you should ask the franchisor before committing to the franchise. But first, let’s take a more in-depth look at the current state of UK franchising to see exactly why this route to business ownership is as exciting as it is lucrative.
>> Read more:
- 10 Key Questions to ask Franchisors
- Meeting the Franchisor: First Impressions Count.
- Franchisors and Franchisees: Know Your Obligations From Day One
- Why it’s Important for Franchisors to Visit Franchisees.
- How to develop an effective relationship with your franchisor
- What support do franchises offer?
- What do franchisors look for in a franchisee?
According to the British Franchise Association/NatWest Franchise Survey 2018, there are around 50,000 franchise businesses operating in the UK. Collectively, they employ more than 710,000 people and contribute over £17 billion to the economy. The BFA’s chief executive, Pip Wilkins, said: “Thanks to franchising, more people are starting their own business and more jobs are being created. These figures show that whatever your background, with the right attitude and ambition you can thrive.” So, before you start your own business in an industry that is evidently thriving, it’s advantageous to understand what makes a good franchisor and franchisee relationship and how it can be maintained.
5 tips for maintaining a healthy franchisor and franchisee relationship
A big part of having a successful relationship with the franchisor is impressing them to begin with. If they don’t respect you or take you seriously, there isn’t grounds for a trusted, mutually beneficial relationship. Therefore, our first two tips will focus on how to impress the franchisor.
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1. Research the opportunity in detail
Franchisors want candidates who do their homework first. You need to demonstrate that you have taken the time to research the opportunity and know that questions you are going to ask. Of course, you can query anything the franchisor says in response, but having a list of questions before you go will make sure you have covered everything you need to while proving to the franchisor you are serious about the opportunity. To see some ideas for questions you might want to ask, keep reading till the end of the article.
As well as proving to the franchisor that you are a worthy franchisee, researching the opportunity in detail is important for you to find a franchise culture in line with your personal beliefs. It’s important that the franchisor shares the same values as you, otherwise you could risk having an unhealthy franchisor and franchisee relationship.
2. Take it seriously - professionalism is key
Knowing about the opportunity in detail will only get you so far, you also need to show the franchisor that you are professional, motivated and can be trusted to run a unit of a franchise they have worked so hard to establish. Try to find the balance between listening carefully to what the franchisor says and being enthusiastic enough to show your sincere interest. You might want to dress smartly too.
3. Communicate with each other openly and honestly
Being a business owner can be tiresome and you’ll have to make difficult choices at times. If you have any issues, take them directly to the franchisor rather than gossiping about them with other franchisees. Whilst this may give you some satisfaction at the time, it isn’t going to solve anything. It’s only going to make the franchisor hostile and untrusting.
The franchisor will probably communicate through a number of channels, including meetings, webinars, newsletters, internal portals and seminars. It’s important to participate in these and give feedback, as without authentic and consistent communication, it’s likely that the franchisor and franchisee relationship will deteriorate.
4. Take responsibility
As a franchisee, you are responsible for:
- Managing your employees
- Participating in training and following systems
- Reporting your sales figures to the franchisor
- Maintaining high standards
This list isn’t extensive either. To find out more about the obligations of both the franchisor and the franchisee, click here.
5. Follow the business plan and respect the franchise agreement
Problems are bound to arise when franchisees don’t stick to the terms of the franchise agreement. Ultimately, the franchisor is in control of how the business is run and makes important decisions for the brand. If you don’t want to have anyone to answer to, franchising might not be for you.
Questions you should ask a franchisor before committing to buy a franchise
The British Franchise Association (BFA) suggests that there are around 30 questions you should ask a franchisor before buying a franchise. We have picked out 20 that we deem the most important.
General questions relating to the business include:
1.How long have you been franchising for?
2.Can I speak to any of the existing franchisees?
3.Have there been any franchisee failures?
4.How do you choose your franchisees?
5.Is there a head office support team and what do they comprise of?
To learn more about the franchise’s methods, you can ask:
6.Do I have to buy products and equipment from you?
7.What ongoing fees are there and what are they for?
8.Where is the training carried out and do I pay for this?
9.Can I see a copy of the franchise agreement?
10.What happens if I want to sell my franchise unit?
11.Can I end the agreement early?
12.Do I find the premises or do you?
Then, focusing on the associated costs, you can ask:
13.How much working capital is required?
14.How much is the franchisee fee and what do I get in return?
15.Can I see financial projections that are based on the network’s actual performance?
16.Before you launched the business, did you run a pilot company?
17.If I need to, can you help me raise finance?
Finally, but equally as important, you’ll want to ask the following questions when it comes to communications and operations:
18. How do franchisees keep in contact with each other?
19.Do you provide an operations manual?
20.If I experience problems along the way, what sort of support will I receive?
The key to a successful franchisor and franchisee relationship
Investing in a franchise is a big decision that shouldn’t be rushed. When you attend a franchise interview, it’s important to do your research and come across as professional in order to impress the franchisor. Whether you’re considering investing in a franchise or are already a franchisee, these five tips should help you understand the essentials when it comes to maintaining a healthy franchisor and franchisee relationship.
If you’re still concerned about how to choose the right franchise, click here, and don’t forget to ask some - if not all - of those questions to the franchisor when you meet them.
Becky Martin, Point Franchise ©