Franchise relationship management: 5 key ways to manage it

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Franchise relationship management: 5 key ways to manage it

In successful franchises, the franchisor and franchisees must develop robust relationships. A franchise relationship management system is important for the growth of a franchise brand, and ensures that franchisees get the most out of the franchise.

Many franchise brands are spread across the whole of the UK and operate from numerous locations. Therefore, franchisors need to be able to communicate effectively with all franchisees and franchisees need to be able to communicate effectively with each other.

After all, customers expect to get a consistent experience, regardless of which franchise location they purchase the product or service from. You wouldn’t expect a McDonald’s hamburger to taste differently at one of the Manchester restaurants than from one in Birmingham. Similarly, nor would you expect one of the Costas in South London to have a different menu to one in the north of the capital.

Therefore, to make sure that customers are happy with their experience and remain loyal to your franchise brand, as well as maintain franchisee satisfaction, it’s important to address operational communication between you and your franchisees.

Franchise relationship management: 5 key ways to manage it

Below, we consider five key ways that franchisors can improve relationships with and between their franchisees.

  1. Keep to your word. It is important to deliver on the support you outlined in the franchise agreement. Franchisees will feel dissatisfied and resentful if they are paying ongoing royalties and other fees in exchange for an inadequate support network that falls short on what was promised.
  2. Get feedback through surveys. Gather your franchisees’ opinions about how effective they think the marketing strategies are, how they rate the level of training and support, if they would make any changes to operational processes etc.
  3. You could also create open lines of communication through networking groups, town hall meetings and by making time for franchisee interactions at the end of conventions. Franchisees will feel more supported if they can share ideas and experiences with each other and are given the opportunity to engage directly with the franchisor.
  4. Create a collaborative culture. It’s important to make sure franchisees feel appreciated and valued. To ensure they know their contributions to the franchise are taken on board, franchisors can work with franchisees to solve any issues that arise rather than simply dictating what they should do.
  5. But ultimately, for the optimum franchisor-franchisee relationship, franchisors need to be selective in the recruitment process. It’s important to choose entrepreneurs who share your vision as well as just having the required capital, as this will save you time, money and stress further down the line. In the recruitment process, ask plenty of open-ended questions and only give the go-ahead if you are fully confident about the decision.

In the next section of the article, we focus on relationships that are crucial for franchisee success. So, if you’re an existing or aspiring franchisee, read on to learn more about the relationships that are essential in running a lucrative franchise business.

Important relationships for franchisees

Setting up a new franchise, or even taking on an established operation is the opportunity for you to run your own business, but with a little extra support to help you succeed. The most successful franchises depend on one key ingredient – great relationships. You’ll need to work as part of a team to ensure your franchise really takes off and develops into a strong venture with great potential for continued growth.

To do that, you need to understand the key relationships you’ll encounter along the way, from your first franchisor and franchisee meeting, to dealing with customers and staff.

Relationships that are key to your franchise’s success

1. The franchisor

Your most important relationship will be with your franchisor. Remember, it’s not just a matter of whether the franchisor likes you, but whether you like them as well. Ask yourself some key questions when looking for the best franchises in your chosen area:

  • Does the franchisor have the same core values as you?
  • How do they work with other franchisees? (Try to talk to other franchise holders to find out what kind of a relationship they have with the franchisor)
  • Do they offer the support and training you’ll need to make your venture a success, or are they more of a ‘hands off’, silent partner?
  • How identifiable is the franchise brand and how does the franchisor promote their business? Is there room for you to develop your own marketing campaigns or are you tied to a set format?
  • Does the franchisor have a short-term strategic plan (three to five years) to ensure sustainability?
  • Who are your franchisor’s rivals and what are they doing better (or worse) than your potential business partner?

What your franchisor will be looking for

A relationship is a two-way process, as is the franchisor and franchisee interaction. While you may have your own checklist of what you’re expecting from the relationship, so will they. They’ll be looking for:

  • A franchisee that’s committed and holds the same core values as they do.
  • Someone who is willing to work hard from the outset, beyond the normal nine to five, Monday to Friday office hours.
  • Someone who is passionate about the franchise, whether it’s a fitness and gym venture, a high-street food outlet or any other kind of franchise.
  • Someone with real business sense. You may not necessarily be experienced in running your own business, but if the franchisor feels you have that spark and the acumen for successful management, they’ll be far more likely to consider you a good fit.
  • Someone who can work within an established framework, but is also willing to contribute their own ideas and innovative touches to really send the business to the next level.

The most successful franchises are achieved through a symbiotic relationship between franchisor and franchisee, where both partners are on the same page from the outset.

2. Your customers

The best franchises succeed because they offer customers something unique, something special, and, most importantly, something the marketplace wants. Without customers, your franchise will not succeed, no matter how much time and effort you pour into it. There are several key elements to ensuring your customers like your franchise and keep coming back:

Brand awareness – With a franchise, some of the consumer trigger points may have already been taken care of through the franchisor’s brand identity. For example, major food franchises may have a very high profile through advertising, and consequently have built up a strong following and a dedicated customer base. Your franchise needs to take advantage of that brand awareness and expand on it by delivering an experience the consumer expects from that particular brand. Fail to deliver that and not only will you damage your own chances of success, but you could end up polluting the overall brand as well, which will not please your franchisor.

The customer experience – We’ve already touched on that briefly, but it is the one thing that all the best franchises have – a great customer experience. A friendly, welcoming atmosphere from the moment the customer walks through the door, to the moment they leave is the only way to ensure they keep coming back and, just as importantly, tell others about their positive experience. By looking after every single customer who walks through your doors, you’re solidifying your business foundation and creating a customer base that’s loyal to not only the franchise brand, but to you as well.

Managing expectations – Customers who are aware of a particular brand have what is known as ‘learned behaviour patterns’ based on their previous experience of that brand. This means they will have certain expectations of any business carrying that brand identity. Your job as the franchisee is to understand what those expectations are and manage your business so that it meets (and, if possible, exceeds) them.

3. Fitting in with other businesses and your community

It’s important to recognise that no matter how big the franchise brand name, you are still a ‘local business’ and, as such, you will need to establish good working relationships within your community. From the way you work with tradespeople to employing local people and how you interact with other similar businesses in your area will all contribute towards your success. The most successful franchises recognise that they have a part to play within a community, and will do everything they can to fit in.

Get involved in community events

A good way to show that you’re not simply another ‘big brand outlet’ is to become active within the community, whether that’s holding open days or taking part in local challenges to raise money for a community centre or hospice. By showing the ‘human’ face of a franchise, you’ll reinforce the fact that you are a local business. This, in turn, can do wonders for your reputation, and by return, your bottom line numbers.

Conclusion

The most successful franchises are not just based on great advertising, excellent business acumen, and a highly visible brand identity. They’re primarily based on strong relationships, firstly between franchisor and franchisee, but also with customers and the community. Build strong relationships, and you’ll build a strong business.

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