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Mar 20, 2024

Challenges of the relationship between franchisor and franchisee

franchisors

There is often a shared fear of failure between franchisors and franchisee. Franchisors may feel skeptical that their franchisees will not meet their agreed sales numbers, which can make franchisees feel stressed and unsupported.

The lack of trust and communication between both parties exacerbates this cycle, with franchisees of global brands like McDonald's, Dominos and Subway having very public disputes with their franchisors.

All these issues exacerbate challenges that can hinder potential success. Therefore, it is worth addressing these issues professionally to ensure a healthy business relationship for many years to come.

Whether you own one or a hundred franchisesit can be difficult to establish and maintain communication with your franchisor.

Lack of communication can have serious consequences for franchise owners, particularly when it comes to resource management or major changes affecting the business. Changes can move from a corporate level to an individual owner level without clear communication or feedback from those owners. This restricts franchisees' abilities to voice their concerns and provides limited time to carry out the necessary adjustments to the servicein sales forecasts and operations.

In 2017, a group of Canadian Tim Horton's franchisees formed an association to fight the "mismanagement" of the brand since its sale to Restaurant Brands International in 2014. One of the main complaints was a "lack of transparency" in how the company was using advertising funds paid for by franchisees.

For franchisors: Establish formal and informal communication channels between you and your franchisees. Holding meetings on a regular basis, location visits, and being open to feedback from franchisees are some of the best ways to establish solid communication.

For franchisees: Be proactive in communicating with your franchisor. Take advantage of meetings and take the time to ask questions, express concerns, and make suggestions about how you both can be successful.

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