Virtually every article dealing with the promotion of positive franchise relations places the responsibility upon the franchisor.

In an effort to maintain positive relations with its franchisees, the franchisor is advised to maintain ongoing and open communications and to seek franchisee feedback on a regular basis. The franchisor is also urged to hold meetings, publicize franchisee accomplishments and initiate other activities that can help promote positive relations with its franchisees.

When franchise relations go astray, some of the problems that can arise include:

Needless energy spent on dispute resolution, which can include legal fees.
Certain issues or disagreements become magnified.
System growth can be negatively impacted.
New franchise sales can suffer.
Franchise resale's values can become depressed.
As someone with a great deal of franchise experience, I'm compelled to add another element to the subject of franchise relations; namely, that the franchisees also bear some responsibility in this relationship.

The franchisor and franchisee have a vested interest in a successful franchise program. Both parties have a financial stake in the relationship with the mutual objective of achieving profitable results. This being the case, it follows that franchisees have the same stake in positive relations as franchisors.

Five ways franchisees can facilitate positive franchise relations
1. For franchise systems with a minimum of 50 franchisees, the franchisees should request and urge the franchisor to help organize a franchise advisory council. If the franchisor resists, then the franchisees should take the initiative.

A franchise advisory council (FAC) is a representative body of franchises typically elected by their fellow franchisees while in some cases they are appointed by the franchisor. The primary role of the FAC is to meet with the franchisor on a periodic basis to discuss franchisee issues, present franchise system concerns and exchange information pertaining to the franchise system concerns and exchange information pertaining to the franchise market place and overall company operations.

I've seen countless examples of franchise advisory councils defusing potential problems and helping to resolve issues before they get out of hand. Yet, some franchisors resist advisory councils for fear they can become too powerful. This is not a valid reason to discourage their formation. Franchisees have every right to organize their own franchise advisory council. The franchisor should play an active role in this process in order to promote positive franchise relations.

2. Franchisees should director meaningful suggestions to franchisor staff as opposed to chirping to fellow franchisees. The value of email cannot be overstated. In today's business world, access to the highest levels of an organization is available via email. There is value in reaching the right person and documenting the message. Franchisors don't want to be in the position of defending why members of their staff did not respond to a suggestion or comment.

3. The more successful and credible franchisees should maintain contact with the Franchisor president or CEO. These executives want to have a positive relationship with their franchisees and in most cases will welcome feedback from their franchisees. If there is a potential problem developing with the franchise network, an alert delivered by a franchisee will be appreciated by the franschisor.

4. Franchisees should avoid introducing their attorney into a dispute unless and until:

a. They have exhausted all remedies with the franchisor.

b. There is compelling or urgent reason, such as franchisor financial problems. This doesn't mean that franchisees shouldn't seek advice from their attorney, but rather that they avoid taking action until necessary.

5. If franchisees have an immediate problem requiring the intervention of the franchisor, the franchisees should request a meeting or conference call ASAP. They shouldn't allow a problem to fester or spin out of control.

In summary, although the responsibility for promoting positive franchise relations is typically placed upon the shoulders of the franchisor, franchisees should take an active role toward the same endeavor. By working together, both parties will be in a better position to achieve a lasting, positive and profitable relationship.

Ed Teixeira is President of FranchiseKnowHow, LLC, a franchise consulting firm; and a managing principal in the Bridge Business Broker Franchise Company. He may be reached at (631) 246-5782 or at [email protected] or www.franchiseknowhow.com.

Source: FranchiseTrade