A franchisor's guide to resolving conflict

13/06/2018 18:00 | Start a business

Franchisor  - how to deal with franchisee conflict

As a franchisor, you'll have to learn how to deal with conflict in a quick, practical, and polite manner. A good working relationship between franchisees and their franchisors is integral to the success of a business and franchisors will have to develop a talent for spotting and stopping conflict before its allowed to escalate too far. Here, we take a look at how franchisors can work to resolve conflict before its too late.

How, where, and why conflict develops

In the vast majority of cases, conflict arises for one of the following reasons;

  • A perceived lack of support, guidance, and assistance.
  • Poor performance on behalf of the franchisee and unrealistic expectations on behalf of the franchisor.
  • Issues surrounding performance targets or standard operating procedures.
  • A lack of communication.
  • Concerns about franchise, royalty, management, and marketing fees.

Though conflict can arise for any reason and at any time, the five factors mentioned above are probably the most common sources of discord. Most franchisees will start by trying to resolve an issue with a telephone call, followed by a face to face conversation. If neither of these options results in resolution, theyll begin filing official written complaints. Finally, if theres no other course to take, theyll resort to legal action.

How to resolve conflict

Most successful franchises have a set of conflict resolution procedures that will be followed in the event of any significant issues. However, they arent always the most practical or useful of procedures. Franchisors will typically have to rely on their communication and management skills if theyre to prevent a conflict from rapidly escalating into something more than it needs to be. Here, we take a look at six ways you can try and resolve disputes before they cause problems for the franchise.

1. Take a preventative approach
Rather than having to worry about conflict resolution, try to stick to a policy of conflict prevention. This may be easier said than done, but it will help minimise the headaches you experience in the long run. The principal means of preventing conflict is through open and honest communication. Be a franchisor whose franchisees are happy to ring up and talk to you. Let them know that youre willing to talk about any concerns or issues that they may have. Also, recognise that avoiding and preventing conflict are not the same thing. If you push crucial issues aside and brush them under the carpet, they only fester. Prevention is about communication. Avoidance is just delaying the inevitable.

2. Dont always refer to the franchise agreement
Though the franchise agreement is the document that defines the franchisor/franchisee relationship, you have to resist the temptation to refer to the franchise agreement every time theres a complaint. The franchise agreement is overwhelmingly loaded in the franchisor's favour you know that the franchisee knows that, everybody knows that. This means that, no matter how right you are, its incredibly frustrating if you use the franchise agreement to justify a decision every time there's a complaint. It appears as though you're not engaging in dialogue and that you don't care about resolving the franchisee's issues.

3. Dont let it reach written complaints
Once a franchisee starts putting their complaints into writing, its time for you to try and rapidly de-escalate the situation. Written complaints are one step away from legal action and usually signal that the franchisee is putting things down formally so that they can be used as evidence at a later date. While it may be necessary to take legal action against a franchisee, you need to ensure it's a last resort. Not only is it a long and drawn out process that distracts from the important task of running a business, but it can also be damaging for the franchise's reputation.

4. Look for the things you agree on
However much the franchise and franchisee work well together, theres always going to be some things you dont agree on and some things that you do. While those issues you dont see eye to eye on may cause conflict, its often the things you have in common that form the foundations of a solution. Let your shared interests, beliefs, and ideas direct the conversation and look for ways that these common ideals can be introduced as a way of progressing your conflict resolution process. If youre at constant loggerheads, theres little chance either one of you will back down. If you can find something that unites you, de-escalation has already begun.

5. Try and find a solution or compromise
This may sound obvious, but it's incredible how often neither the franchisor nor the franchisee is trying to find a solution or compromise. Instead, both are rooted in inflexible and unhelpful attitudes that prevent either from backing down or even trying to find an understanding. If you want to prevent and resolve conflict, it's necessary to act as though you do. Don't get stuck in unchanging and unresponsive attitudes and positions, try and find a middle ground and to understand where the franchisee is coming from.

6. Listen
Finally, one of the critical skills a franchisor can learn to develop is the ability to listen. In far too many cases, franchisors only hear what they want to hear and will disregard the rest. If you're going to resolve a conflict, the best way to start is by really listening to the franchisees issues. You may feel that theyre completely unfair, or that they clearly want something that violates the franchise agreement, but you still need to hear them out. Just listening demonstrates that you care about them as a partner and value their time.

If the franchisor is to become a talented conflict manager, they need to ensure that they're always on the lookout for potential problems, are willing to listen to their franchisees, and want to try and come to some kind of compromise or find a solution. If conflicts and disagreements are allowed to get out of hand, they can cause enormous damage to a franchise, with its reputation at risk in particular.

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