Is Your Franchise Aligned or Divided?

Jan bio photo
Jan Muhleman
August 14, 2018
August 14, 2018

I was fortunate to hear Doc Cohen speak on the franchisor/franchisee relationship at the FaegreBD Franchise Summit in Minneapolis on August 22-23, 2018. The title of his keynote presentation was, “Together a Franchisor and Its Franchisees Can Accomplish Almost Anything: Divided Leads to Conflict and Struggles.” While this title might elicit a “Duh, isn’t that what franchising is all about?” from some, Doc’s talk was anything but commonplace. He brought the perspective of a multi-unit, multi-system owner and the delivery of an ace storyteller. Like sitting at the feet of a wise man, I couldn’t wait to hear what he had to say next.

Red and blue rope tied in a knot

It is a basic tenet of franchising that the strength of the system is dependent on franchisees and franchisors working together toward common goals of growing the brand and individual unit sales. When franchisees are aligned around those goals and understand and support the strategies to achieve them, you have harmony in the system. When there is disagreement regarding the goals or strategies, system growth can grind to a halt and conflicts arise.

No business operates in a vacuum. Competition happens and consumers change. It is a mistake to think that what works today will still work tomorrow. Both franchisees and franchisor must acknowledge that their businesses need to change and evolve with the market. Their relationship can become contentious when franchisees don’t embrace change or franchisors fail to hear their cries for help. Franchisees are kind of an early warning system. They often detect market changes and threats sooner than the franchisor would.

We have had the opportunity to work with a great franchise system, Right at Home, and help them navigate a significant change in their approach to marketing. They were alert to changes in their market and listened to and acknowledged the concerns of their franchise community. They headed off conflict by creating an ad hoc committee and enlisting their most outspoken franchisees to work together with the corporate and agency team to come to a unanimous decision to implement change. Key to our mutual success was objective, third-party, consumer, franchisee and competitive data that clearly defined the situation and helped identify an agreeable solution.

The results have been positive increases in unit sales and general franchisee satisfaction. However, their new approach was implemented three years ago. During that time, competition has grown more heated, but not just for customers; the current and future battle will be for employees. Fortunately, Right at Home has the structure, approach and trust in place to address those and any future challenges together.