Paul Sharpe, General Manager at FranConnect ANZ.
One of the crucial factors that contribute to the success of any franchise lies in building and maintaining a strong relationship between the franchisor and the franchisee.
Open communication and trust are the pillars that support a successful franchising model, and effective communication is essential to creating a strong foundation for franchise growth. Open communication helps both franchisors and franchisees understand each other’s priorities, challenges, and expectations for the future. In this blog post, we will discuss the importance of this vital business skill and how to establish open lines of communication and trust between the franchisor and franchisee.
Importance of effective communication
Effective communication is the foundation of any successful business relationship, and franchising is no exception. When there is a lack of clear communication between franchisors and franchisees, it can lead to a host of issues, including misunderstandings and unfulfilled expectations. This can result in a breakdown of trust and a strained franchise relationship, which can ultimately lead to franchise failure. By fostering transparency and openness parties are able to exchange information regularly and work together towards a common goal. This can then enable them to provide feedback in a non-judgemental way to improve the franchise system. Effective communication also ensures that both franchisors and franchisees have a clear understanding of their roles and responsibilities, ultimately promoting accountability and helping to avoid conflicts. In short, effective communication is essential for building a strong and successful franchise system.
Laying the foundations
The foundations of the relationship between franchisors and franchisees can be considered to be the policies and guidelines both must follow and it’s important to get communication around these correct from the start. These guidelines can include regular check-ins and updates with franchisees, setting a specific time each week for a catch-up, and ensuring that all parties have access to necessary information. For franchisors, regular check-ins with franchisees can be a valuable practice for maintaining clear and approachable lines of communication. Franchisors can stay informed of any challenges or concerns that franchisees may be facing and provide guidance and support as needed. Many franchisors still lack a system to monitor and control field execution and performance, and technology tools to keep communication consistent can be especially helpful in facilitating these touchpoints.
All systems are different, however having a range of features like centralised communication channels and customizable reporting, ultimately helps franchisors stay organised and track important metrics on their units. Also having a mobile-friendly system allows for easy access to real-time data and communication from anywhere, making it convenient for Franchise Business Coaches (FBCs) to stay connected and communicate with franchisees on the go.
On top of keeping communication consistent, it’s also essential to communicate in a manner that’s easily understandable, straightforward, and respectful, and to always be empathetic and patient with each other’s concerns. Effective communication helps both franchisors and franchisees understand their respective points of view, and creates a sense of community and ownership, promoting teamwork, and strengthening the overall organisation. This will inevitably result in increased sales, higher customer satisfaction, and a reduction in conflicts or misunderstandings over the long run.
When franchisors and franchisees work together, they can help improve operational efficiency, share ideas, grow the brand, and ultimately increase revenue. A social network-like platform can further enhance collaboration and communication among all stakeholders in a framework team members are familiar with and know through their personal use of the global social networks. Franchisees in the community can then learn from each other, all while feeling like their opinion matters when making decisions about what’s being distributed within the company.
Building and maintaining trust
Trust and communication pretty much go hand in hand when it comes to business. Building trust can take time and effort, and it’s important to establish trust as soon as possible. As many know, for franchisors, the Franchise Disclosure Document (FDD) is the essential first step in establishing and maintaining trust with their new franchisee.
It is crucial that franchisors to keep the FDD transparent and up to date to maintain the trust of their franchisees and this can demonstrate their commitment to open and honest communication.
Failure to disclose material information or provide updates to the FDD can lead to legal and financial issues. Additionally, a lack of transparency can lead to a breakdown of trust between the franchisor and franchisee, which can ultimately result in a failed franchise.
Communication is crucial
Many franchisees found that they’ve been left out of the loop when it comes to company communications. This is an issue because a lack of communication can lead to poor brand consistency among franchisees, which in turn leads to lower customer satisfaction and higher levels of attrition. To increase engagement with franchisees and promote better brand consistency, organisations should consider including a communications centre or hub for franchisee use. A well-designed communications centre will provide all relevant materials in one centralised location so that they are easy to find and understand. It also provides the opportunity for franchisors to get feedback from their franchisees on how well these materials are understood as well as any other issues or concerns about them. The result? Increased understanding among both parties about what is happening within the company, and a more cohesive brand.
A good way to measure communication effectiveness is to look at the number of franchisees who are engaged on your technology solution (measured by KPIs such as open rates, click-through rates, conversion rates, etc.).
In conclusion, the success of a franchise business heavily depends on the relationship and communication between the franchisor and the franchisee. Effective communication is the foundation of a strong franchising relationship and it’s crucial to establish open lines of communication and trust. With regular check-ins and updates, clear communication guidelines, and actively listening and responding to concerns, franchisors can build and maintain a positive relationship with their franchisees. By promoting effective communication and building trust, franchisors and franchisees can grow their franchise brand and achieve success together.