For franchise systems that are past the start-up phase in their growth cycle and have some experience in managing a franchise system, issues related to relations between the franchise company and its franchisees often emerge as critical to the success of the system.
After all, the strength of any franchised brand is dependent, in large part, on the degree to which the franchise system and franchisees can cooperatively exploit competitive opportunities, gain market share, build the value of the brand and enhance the profitability of operating units, whether franchised or company-owned. A franchise system which is crippled by internal dissension, units that fail to present the franchised concept appropriately or have human and financial resources diverted to dealing with disputes, will probably be at a significant competitive disadvantage, as compared to systems with good relations and not facing those issues.
Itâ€™s these hard-nosed business realities that ultimately justify concentration on the skills and resources needed to have good franchise relations, not simply a desire to ‘feel good’ and have pleasant business relationships, as valuable as those may be by themselves.
Attitudes and perceptions play key roles in how a franchise system is viewed. ‘Managing attitudes and perceptions and sending the right messages from top management to staff makes a difference for good business and economic reasons, aside from the benefit of simply creating a comfortable working relationship,’ recommends Holmes & Lofstrom‘s David Holmes in September’s Franchising World. Get a few more clues here.