Ties that bind: franchise relationships, like marriages, are products of conscious effort

Fifty percent of all marriages end in divorce, they say. But as an honest look at most franchise relationships will tell you, rough times aren't limited to wives and husbands.

As a former area developer for a national sandwich chain who is now a relationship consultant to the franchise industry, I've witnessed firsthand the good and the bad of franchise relationships. Our company's latest national survey, "Franchise Relationships: The State of the Nation 2003," revealed that 39 percent of all franchisees rate their franchisors fair or poor overall. Nearly half would not recommend their franchise to a friend or family member. And 44 percent--more than two in five franchisees--would not purchase their franchise again if they had known then what they know now.

It's obvious that many franchise relationships are in need of repair--even major overhaul. Yet how do things get like that, in light of the fact that the franchisor-franchisee bond is so crucial to success? Isn't there a way to build a positive, trusting environment?

There is. But the place to start isn't the place most people expect. Take the Uniform Franchise Offering Circular, or UFOC, for example. That disclosure document is supposed to indicate the terms of the relationship, describing the rights and responsibilities of the parties. Yet the legal implications of the UFOC requires companies to put in the kitchen sink. Instead of putting both parties at case, the form usually creates mistrust.

Nor are internal mediation committees likely to do any good. Sure, airing grievances before company execs and key franchisees sounds good, but seldom are relationship problems "single-issue" conflicts that can be dealt with by committee. The real problem is not who forgets to put the top on the toothpaste. The net result of mediation committees is often too much talk and too little progress.

So what are some wise pathways to success? One of the best strategies is to head off problems before they start by creating avenues for meaningful franchisee participation. Franchise advisory councils and policy boards--when they have some teeth--can be beneficial for both franchisees and the company. After all, who understands the potential effects of price changes, new advertising programs or store redesigns better than frontline people?

Giving franchisees advance say in store policies and procedures also is a good idea. Consultants who write operations manuals, for example, can be grossly out of touch with real-world issues. I know employees with an eighth-grade education who have more operational insight than the so-called experts from the home office. What's more, early franchisee input helps gain the buy-in so necessary to procedural change.

Franchisors need to remember that one of the most important rules is simply to follow through on your promises. In any organization character and integrity start with the chief executive and filter down. Establish an environment of respect, and you'll find that every problem gets easier to solve.

Of course, franchisees have their own part to play in improving relationships. Topping the list is the importance of letting go of old grudges and biases that have nothing to do with the people and situations at hand. Who cares about that french fry machine incident from 1979? Let it go. Chances are the executives involved aren't even at the table anymore. Even if they are, you really have only two choices: waste time rehashing the past or look forward to future possibilities.

Franchisees also need to realize that the franchise contract they signed, in virtually every instance, is structured to favor the company. Instead of wasting time fighting that lost battle over and over, find new and better ways to influence the relationship. Ideas that help the entire system nearly always are appreciated.

If, after everything else, you decide that an outside consultant would be beneficial in resolving rifts between the company and its franchisees, I find the best application of that person's resources is as an adviser. Don't expect your consultant to be the hero who rides in, issues a fancy report and solves all your problems. Give that person a coaching role; allow him or her to work behind the scenes, analyzing situations and identifying issues and solutions.

Your consultant's task should be to get the real issues on the table and then set a course for improvement. Your adviser, working hands-on with the franchisors' staff and directly with franchisees in a teaching and mentoring role, can provide the necessary training to ensure a long-term solution.

The best franchise organizations are those in which mutual trust and shared objectives are the norm. Achieving such a condition is not impossible. What's required is the open, resolute and ongoing application of specific policies that affirm the value of each side's goals and abilities. When franchisees and their franchisors join forces to each other's mutual benefit, the pie only can be enlarged. And everyone will get a slice.

This article does not necessarily reflect the opinions of the editors and management at Nation's Restaurant News.

Jeff Johnson is president of Lincoln, Neb.-based Johnson Franchise Consulting Inc., a consulting company specializing in franchise relationship consulting and mediation. An outspoken advocate of franchising, Johnson spent 16 yearn on the front lines of franchising as a master franchisee and franchise representative.

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