Opening in several countries at the same time without the proper planning and support structure will inevitably cause the franchisor to miss certain key elements of the relationship, including that personal touch.
Franchising World October 2011
By: William Le Sante, CFE
In attending different franchise exhibits, conferences and recruitment programs around the world, the word “relationship” is used or overused by many attempting to convince a potential candidate that their opportunity is the best option in the market. One might wonder if the meaning of the word is really understood as it applies to a venture in which one is about to embark.
It is sometimes difficult to hold back our enthusiasm when presenting our concept and that is good. After all, it would be difficult to sell an idea that one really doesn’t feel a certain passion for or have a strong belief in the legitimacy of an offering. The problem is that more times than not, companies tend to over promise and under deliver. Some of the blame falls on the master franchisee candidate who usually has higher expectations of the level of support and lower ones of the requirements and rigors of the business he has just acquired.
Avoiding Fractured Relationships
On several occasions, this author has intervened to try and save a fractured relationship before lawyers became involved. In every single one of these instances, the two most common words utilized by the defense of the master franchisee, were support and relationship. These, along with the words communication and partnership, were also among the other overused words.
Truthfully, there isn’t a single instance where the franchisor’s intentions were anything but honest; however, somewhere down the line, someone skips a step or two and the relationship heads down a slippery slope. The franchisor gets totally overwhelmed and bogged down with growing the brand. Opening in several countries at the same time without the proper planning and support structure will inevitably cause the franchisor to miss certain key elements of the relationship, including that personal touch.
The advancements in technology have been a godsend in assisting all of us in expanding further and faster than one could ever imagine. However, the ugly downside is that these great technological advancements have also made us busier in maintaining and enhancing the personal relationships that were originally forged when the company wasn’t so big and first made the deal.
E-mail could never replace a handwritten note, voicemail cannot replace an actual phone conversation, and one must always remember the powerful impact of seeing one another and sharing a meal with each other’s families. Additionally, there are challenges in dealing with a partner halfway around the world, living under a different culture of business protocol.
There are some franchise representatives who are strictly business-minded and too occupied to spend any of their off time, be it vacation or social time, with their partner. Some even hesitate to have a night out with or without their families. A strictly business attitude makes it difficult to build any relationship, more so with international partners.
Now that the personal side of the relationship has been covered, there is still a need to pay the bills and support the growth of your brand. Therefore, a workable balance must be found on the business side, the need to have enough to sustain the deal.
It is always a mystery, and an all-too-common flaw, that some franchise businesses frequently overlook and don’t require a detailed business development plan with financial projections from prospective master franchisees. The fact is that these master candidates have little clue as to what the expectations might be and should look to the franchisor to guide them through the process. This step may leave as large a gap as the relationship void since the financial performance of the master franchisee’s business model is critical in maintaining that the relationship is optimal.
So, how can these pitfalls be avoided? First and foremost, build the relationship. This step does not come with a manual, as each individual is different, particularly since most come from different parts of the world. Learn the likes and dislikes of your potential partners. Make certain that everyone shares the same values; otherwise, it is difficult to maintain any relationship.
Goals are important, but these can be adjusted according to the area, concept and market conditions. One can work around these continuously through the tenure of the deal and should.
The initial support structure is always critical and is usually executed effectively and with the utmost professionalism on the part of the franchisor. There is much left to be desired in the follow-up phase. This is where relationships begin to fragment into another deal.
Throughout the course of my business, several trips are usually made to meet with a master franchisee that was brought into a system by me. Unfortunately, after typical pleasantries, the interviews usually hold many similarities.
“We’re not getting the support we expected.”
In many instances, the franchisor stops monitoring reports from the field. Even under circumstances where the franchise company may look at the reports coming from their field representatives, it rarely verifies or quantifies the findings with the master franchisees.
In a recent interview with a master franchisee in South America, it was learned that the person who was responsible for the operational visits showed up at the restaurant only to question where they were going to have dinner that evening and ask about popular dance clubs in the city. This was a real turn off for the foreign partner who opted to ignore the request, and walk through the rest of the visit with high skepticism as to the qualifications of the person in charge of supporting the operation. This is not a great way to grow the relationship. On a side note, many times the culture does not allow for the foreign partner to voice these concerns, and a good number of times the master franchisee will only bring up any issues when it may be too late to salvage the relationship.
There are challenges in dealing with those called Generation Y, those ranging in age from 18-37 years old; however, in an era of high unemployment, there is enough good talent from which to choose the second most important person in representing your brand in the field.
“Have not had communication from the franchisor in months.”
The wonder of technology has allowed for franchisors to rely more and more on it to get the word out and, although effective in saving time, technology tends to lose the personal touch with partners. Master franchisees feel they are an important extension of your business and look upon automated dissemination of information as necessary and expected, but far from fulfilling the needs of the franchisor/ master relationship.
In my 25-plus years of assisting franchisors in exporting their brands to more than 64 countries, there have seen some failures, particularly in the early years when the lack of communication and support efforts were prevalent. Visits and contacts were maintained with individuals in each of these failed situations. By continuing to visit with each other, in their home turf or ours, each considered the other friends. In many cases, they trusted my judgment to bring them into a new venture to take back to their markets. It’s all about the relationship.
Looking at the big picture, here are a few simple steps to a successful formula:
- Identify the ideal partner and make them feel special because they are.
- Make certain that both parties understand their expectations and responsibilities. Insist on compliance from day one.
- Collect enough fees so as not to feel resentment when it’s necessary to go the extra mile to support a friend in need or bail them out from disaster.
- Communicate in both a business and personal mode. The idea that a visit, calls, or e-mail from someone in your organization is enough is not valid. It must come from the top.
Bearing in mind the many advances in communications, our world is getting smaller and much more accessible. Information crosses borders instantly, with a click of a mouse, making it easier to legitimize the true players in the field.
The good news is that today more franchisors are cognizant of the requirements and challenges of their potential partners and more are taking the necessary steps to make certain that these measures are in place prior to taking the plunge into new markets.
William Le Sante, CFE, is CEO of Le Sante International. He can be reached at 305-387-5840 or email@example.com.