Andrew Benefield | Managing Director | Mrs Fields
"The relationship between a franchisee and franchisor is often described as being similar to a marriage. It is a partnership in business, where neither partner will succeed with out the other.
Before getting married most of us spend hours with our prospective partners ensuring that they share similar thoughts to our own on the future, how many kids, where will we live, how much money we will make, who will do the housekeeping? It is all about setting expectations.
However having spent most of my professional life coaching franchisees and small business owners, I wish I had a dollar for every time one of them expressed disappointment or frustration about some element of their business not living up to their expectations, whether it be an employee, a supplier, the location or the profit they earn. Whilst most of them a quick to blame someone else it often comes back to how clearly they communicated what they expected before they employed the person, purchased from the supplier, chose the location etc.
It is very important to ensure that both parties have a clear understanding of each others expectations, not only on business performance, but also such things as behaviour, communication and responsibilities. I have worked with a franchisor that set their internal budgets based on revenue growth of 20% per store each year, yet I remember one franchisee who was going to be very comfortable if they just maintained the same revenues every year. They never shared their goals and at the end of the year one was ecstatic with growth of 8% and the other frustrated.
So how do you research and set expectations in a franchise relationship?
The franchise agreement governs the relationship between franchisor and franchisee, however it often only sets out the franchisors expectations of what not to do, or what will happen in the event of a dispute. Further the Trade Practices Act and other regulation often restricts the amount of financial and statistical expectations that can be shared between partners before they enter business.
However there is a lot that can be done outside of these documents. The key to sharing expectations is getting to a position where you can have clear and honest communication between partners.
This can be difficult to achieve when you are in the "courting" stage of selecting a new franchise, however just like getting ready for marriage nothing beats spending time with your partner. I know one successful franchisee who spent time as an employee in eight different franchise systems before he selected the one he wanted to be a part of as a franchisee!!
Don't be afraid to ask what the franchisors expectations are of you.
At Mrs. Fields when a new franchisee joins the team we prepare a detailed initial 90 day plan for them, which attempts to set down our expectations of what they will be doing in the 90 days leading up to commencing business, from marketing the business, recruiting team members and dates to placing orders and make payments. It also sets down what they can be expecting us to do, construction deadlines, agreements etc. We believe this works well in setting our expectations on the franchisee during the commencement phase although we continue to learn every time we go through the process.
Then once their franchise is up and running we use regular franchise meetings to ensure all our franchisees are aware of our goals and aspirations for the business. By doing this they are clear on what is important to us and how we will prioritise time. We are slowly encouraging them to share their own goals and targets with us so we know what is important to them.
There are many marriages that have broken down because of a lack of communication, and a franchise relationship is no different. Expectations will change over time and it is important for each partner to keep sharing theirs.
A new franchisee has high expectations on a franchisor for support and the franchisor is certain that they will spend most of their time working in and on their new business. However after several years of running a successful franchise both will have very different expectations of each other.
A franchise relationship can be likened to a marriage however it generally more difficult to terminate a franchise agreement than to get a divorce. So setting clear expectations between partners is a vital ingredient to success."
To find out what franchisors would expect from you if you were to become a franchisee, pick the franchise systems you are interested in from the A-Z Franchise Listing page and add them to your contact cart. Once you made your selection, click on the contact button and ask the question in the query field.