The Importance of Feedback in the Franchisor-Franchisee Relationship

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Feed back from franchisees

Have you overlooked the value of feedback in the past? Constructive criticism - and praise - can go a long way when creating a strong franchisor-franchisee relationship, so it’s important both parties engage in productive discussions.

Creating a strong franchisor-franchisee relationship is vital when it comes to growing a franchise business. Franchisors need to be able to communicate their strategies effectively, and franchisees rely on the franchisor’s ongoing support. And the best way to make sure the partnership is productive is to provide constructive feedback. 

Remember, feedback should go both ways, with both the franchisor and franchisee providing their thoughts and communicating openly. 

Why is feedback important for managing the franchisor-franchisee relationship? 

1. You can have more constructive conversations

Research shows that if 26 customers have a complaint, just one will raise it with the company (Esteban Kolsky). So, franchisors and franchisees are unlikely to get a full picture of the business just going by customer interactions. Both parties can offer the other extra insight into the aspects they’ve discovered are working well and the areas with sticking points. 

2. It improves both parties’ productivity and profitability 

According to Gallup, businesses with managers who receive feedback are 12.5 percent more productive and 8.9 percent more profitable than those with managers who don’t. 

Both the franchisor and franchisee stand to benefit by learning how to give feedback. And the more successful the franchise becomes as a result of discussions, the more they’ll appreciate the value of feedback and effective communication. 

3. It establishes an open and transparent culture 

If honest feedback is a key part of the franchisor-franchisee relationship, both parties will become accustomed to working together to improve the business. Making the first move and raising negative points can be nerve-wracking initially, but once it is a regular feature of franchise meetings, the business can become a more open place. 

Everyone wants to work somewhere they feel they can talk honestly with a business partner who is transparent in their communications. Plus, providing feedback will promote a culture of trust, which is always beneficial. 

4. You can work together to create new ideas

In providing feedback, you can delve deeper into your thoughts on a topic, which sometimes leads to new ideas. Being able to explore new concepts and opportunities is a great way to foster a productive franchisor-franchisee relationship, and should improve the franchise in the process. 

5. Franchisees are more likely to enjoy their time and renew their contract

One added advantage for franchisors is the chance to foster long-running relationships with their franchisees. If an investor feels dissatisfied with their time at a business, they’re unlikely to renew their contract. As a result, the franchisor has to spend their own time and money recruiting and onboarding a new franchisee. 

Low-quality feedback is not useful, positive feedback is undervalued, and negative feedback delivered unskillfully can actually cause physical pain… When delivered thoughtfully, however, feedback can provide leaders with the actionable data they need to become more effective.
—Jennifer Porter, Managing Partner of The Boda Group

Franchisor tips for providing ongoing feedback

1. Encourage transparent feedback methods 

It can feel scary being truthful with someone, especially if your comments are negative. So, to promote the importance of feedback in a franchise, you need to create a culture of trust, openness and honesty.

Once you’ve got the culture right, your franchisees will feel empowered to give feedback as and when they feel it’s appropriate. After all, they’ve invested in your franchise model and sharing their thoughts could result in positive changes to benefit the whole network.

2. Don’t just wait for feedback - ask for it

Being an approachable franchisor may not be enough to encourage franchisees to come forward with criticism. Without putting anyone on the spot, ask questions such as:

  • If you were me, what would you change about the franchise and why?

  • What feedback are you getting from customers or employees?

  • What do you like most and least about being a franchisee?

  • How can I help you to become more successful?

If you’re going to persuade franchisees to be open with you, you’ll need to convince them you can take criticism well and use it constructively. Show them you can receive thoughts, comments and opinions with an open mind.

3. Lead by example

It’s all well and good asking for feedback, but you must be able to give it too. Your franchisees also stand to benefit from your thoughts and ideas.

One way to give your opinion tactfully is to ask if the other person wants to receive feedback, rather than just giving it. Asking for their permission will make them feel like they’re in control of the situation and they’ll probably be more willing to accept your ideas. 

Again, you’ll need to foster a culture of trust and openness if you’re to deliver direct and honest criticism effectively. Rather than shy away from giving feedback, you should lead by example and give it out as you would wish to receive it.

4. Act on the feedback you receive

You’ll quickly discourage franchisees from providing their thoughts if you never act on the feedback you receive. If your franchisees have been honest and brave enough to give some home truths, you should show them respect by responding. 

Franchisees work closely with customers and sometimes have a better understanding of consumer demand. So, not only will implementing some of their suggestions strengthen your franchisor-franchisee relationship, but it could also prove to be highly lucrative. After all, the McDonald’s Big Mac was developed by a franchisee. 

Find more helpful business guides right here at Point Franchise

Every day, we publish data-driven articles to support franchisors, franchisees and other entrepreneurs in their quest to build successful and profitable businesses. Browse our recent guides or use the search box to find more information.

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