Relationships between franchisees and franchisors are similar to a marriage where problems surface once the honeymoon is over and if not resolved can lead down an emotional and costly path.

Franchise Expert Tracy Eaton believes franchisees often get caught up in the excitement of buying into a business at the start then question their decision once reality and hard ongoing work kicks in.

“This can happen once the initial intense training and support period from their franchisor is complete and they no longer have training wheels on,” says Ms Eaton.

“There is no doubt buying a franchise is the safest path to having your own business because it is a proven system yet you still need to build sales, work hard and take responsibility or risk failure,” she said.

“Relationship breakdowns between franchisees and franchisors are one of the biggest challenges within the industry.”

“Partnerships either breakdown and end, continue existing because it’s too hard to get out of it or work on the issues to thrive and grow over time.”

“In 2015, depending on the industry, between 11 and 18 percent franchisees either sold or handed back franchises.”

 “Communication breakdowns, mismatched expectations, diverging priorities and lack of perspective or future vision are key triggers for problems between franchisees and franchisors.”

“Those who are succeeding in the franchise industry are seeking independent advice and mentoring to take the emotion out of their actions and gain objective perspective, allowing them to understand and accept both sides in the relationship.”

“Constant promotions by franchisors can be seen by franchisees as an added expense but they fail to realise they can leverage those promotions by turning new customers into repeat customers for long term profit gain.”

“One happy franchisee looking to become a multi-unit operator wanted to exit the business almost overnight because of a change their franchisor made to the product which greatly impacted their profitability in the short term.”

“Franchisors face a lot of criticism yet they need to stay open to feedback from their franchisees and third parties for the partnership to be profitable for all.”

Ms Eaton said franchisees and franchisors can improve their relationships to both grow their business by:

1. Independent Advice: Find a mentor who has both franchise and business experience to get an objective view on your operations.

2. Profiling: Franchisors often profile potential franchisees which could be used to help both parties understand strengths and weaknesses throughout the course of their relationship.

3. Training: Franchisees shouldn’t rely solely on initial training from franchisors. They need to network, attend relevant seminars and keep up to date with what’s happening technology and business wise.

4. Expectations: Don’t expect either party to provide or comply with everything. Have an interdependent relationship not a dependent one.


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