Leadership, with Steve Whiteside

What Affects the Quality of a Franchise Relationship?

I have spent hundreds of hours working on what affects a quality franchise relationship. Over and over the same answers were revealed. Although all franchisors and franchisees feel they have problems that are unique to them, I found that their problems are not so unique. Yes, they may look different from the surface, but they are all grounded in some major themes.

From my research, four major themes emerged that directly affect the quality of relationship between the franchisor and the franchisees:

• expectations versus perceptions of the franchisor and franchisee,
• collaborative communication and how communication can be effective,
• communication barriers reduce the ability of the franchisor and franchisee to work together effectively, and
• trust and its effect on franchisor/franchisee relationships.

Expectations versus perceptions of the franchisor and franchisee:
When franchisor and franchisee expectations are not aligned, they will be working towards different goals. In many cases, you can see this when a franchise organization does not appear consistent or unified. If the franchisor's goal is to sell the highest quality food, but the franchisee's goal is to sell the largest quantity of food regardless of quality, many issues will arise from accusations of poor product quality to differences in advertising methods.

I found that the forming of expectations and perceptions starts during the first contacts between the franchisor and the potential franchisee. In most cases, perceptions are already set from the experiences the potential franchisee has had as a customer with the franchise organization, but the real expectations start to be made at the first meeting between the potential franchisee and the franchisor.

The more qualifications a franchisee must go through, the more in-line expectations seem to be. An example would be Tim Horton's, which is a popular franchise in Canada and it is moving across the United States. They interview and look into any potential franchisee in depth. They look for very specific qualifications. When they find the right franchisee, the relationship has already been set in many ways through the exhaustive interview process.

Ultimately, finding the right franchisee for the right franchisor is the key. This will only be done by complete honesty, openness from both franchisor and franchisee, and making sure that both parties understand their full commitment to each other.

The best franchisors know this, live by it, and grow like crazy. Other franchisors look for the fast sell and seem to be more busy putting out fires than actually growing the organization. Some organizations will never learn, but the good news is: Most will.

Collaborative communication and how communication can be effective:
I have found that there are many communication problems between franchisors and franchisees. Some of the issues are a lack of effective communication and the need for collaborative communication, in the form of open and honest flow between the franchisor and franchisee and their respective staff.

My research showed that franchisors and franchisees wanted better communication and were willing to create better communication. So why is effective communication so elusive? Mostly because we do things that hinder our communication. We assume others know what we are saying, we expect others to read what we write, we even expect that others understand how we feel. All of this leads to poor communication, then eventually to a break down in communication.

I have also found that, when communication is done in collaboration with all stakeholders, it is much more effective. When all parties feel they are a part of the change or policy that is being developed the buy in is much more complete.

Communication barriers reduce the ability of the franchisor and franchisee to work together effectively:
One of the largest communication barriers I have come across in my consulting occurs when the parties communicating feel they are not on an equal footing. In many cases, franchisees feel they can talk until they are blue in the face, but they feel their franchisor will do whatever it wants in the long run.

On the other hand, I have come across franchisors who will not make choices if there is no backing from a majority of franchisees. In these cases, the franchisees know this and want to give input as they feel their input makes a difference.

Things are always unequal if one party feels that its input has no sway or power to influence. This is why I have always tried to have franchise organizations develop ground rules that make it plain what is up for discussion and what is not. For instance, in a franchise organization where public safety is paramount there are things that just can not be changed and must be followed, but on the other hand, items like marketing should always be up for frank, open, and honest discussion.

Breaking down barriers will allow collaborative communication to take place, and from there, many good things will follow. Many times it helps to bring in a third party, like a consultant, to find out if and where the barriers exist, as it is often hard to see the barriers that we have helped to create.

Trust and its effect on franchisor/franchisee relationships:
Much has been written about trust, so I will not go into the definition of trust in an already long blog posting. What I will say is: I have found that trust is one of the most important elements of a franchisor/franchisee relationship. Without trust, you have no way to ground your relationship. You can not have effective communication, and you most certainly can not effectively collaborate on anything.

Interestingly enough, my research showed that most franchisors did not even realize that there was a problem with their franchisee's trust. In some cases, when the franchisor found out there was a lack of trust, they were offended at first, but trust is usually a combination of expectations not being met and poor communication. When we fix our communication breakdowns, we can usually improve our trust factor.

Trust is not something that comes naturally for most; it must be earned. Just because a franchisor has a franchisee sign a contract will not mean they are building trust. Trust comes from events and conversations, where trust is built from outcomes. So, whether you are a franchisee or a franchisor, ask, "What have I done lately to build trust in those around me? What events or conversations have I been a part of that have built trust?"

If you keep some of these ideas at the forefront of your mind when working with your franchisees or franchisor, I believe you will build a better relationship as well as help your company be much more successful.

Steve Whiteside is a consultant specializing in organizational development within franchise organizations and educational organizations. You can contact him at The Franchise Leadership Center, 604-568-9686.

Copyright © 2009 Steve Whiteside

Feedback is only good if you use it!

In the past we have all received surveys asking our opinion about a product, a stay in a hotel, or some such thing. The information collected in these types of surveys is useful as long as the information is actually used. In my experience there are two factors that are key to making surveys useful. 1. make them as ‘user friendly’ and easy to fill out as possible. 2. ensure that information is collected and collated in a way that will enable the outcomes to be used to make positive change(s) in your organization.

All too often surveys ask for a ‘narrative’ on how you feel. In most cases this is ineffectual. Most people prefer to answer multiple choice questions, wanting the choices to be simple, such as a number scale 1 to 10. Last year I purchased a boat and about six months later I received a survey in the mail. After taking a brief look at the survey, it went straight in the trash, as there were over 10 questions that required me to provide a ‘narrative’. I just did not feel like writing a book. It is hard enough to get me to make posts on my blog! On the other hand, if there would have been 20 multiple choice questions with perhaps an option to write an explanation if I chose to, I probably would have taken the time to fill out the survey.

Once your clients have filled out the surveys and you have taken the time to collect the information, make sure you use it. Too often I have seen businesses collect survey information, take a fast look at it, and never actually use it, or refer to it again. I was working with a one company and they collected surveys from all their clients. When I asked them what they do with the information they collected they said "we file it here in the cabinet". I then asked them what they do with it then, and they replied "nothing, but if the government asks for it, it is here".

What a waste of time and energy! Always use the information you collect. Ask yourself "what positive change have I made, or can I make, using this information?" If you can not think of anything then you are not nearly done with the survey information, or you did not ask the right questions. If we know and believe that our clients will almost always have better ideas than us, then we had better use them.

Lastly, thank your clients for taking the time to complete the survey, that is, if it is not confidential. Always send out a thank you and they will remember that you cared enough to do so. If you are using a confidential survey, try to use something like an online survey such as Survey Monkey at www.surveymonkey.com. Make sure you program the confidential survey in a way that will thank them for taking the survey and explain how much you appreciate it.

Remember, information (knowledge) is power, but only if you use it!