The Kimono Conundrum – Healthy Franchise Relationships Tip #101

If you have ever worked with Greg or read any of his pivotal books on how to build and sustain healthy franchise relationships, you already know the conversation always seems to lead back to the franchise system’s culture.  Building a culture of support, mutual trust and respect and open communication is the foundation of any healthy system.  In this week’s Healthy Franchise Relationships 2-Minute Tip #101, Greg gives us his insight into a healthy culture and the foundation of trust that creates transparent, mutually beneficial relationships. 

The Kimono Conundrum – Greg’s Healthy Franchise Relationships 2-Minute Tip #101
by Greg Nathan 

What do you think are the key responsibilities of a franchisor? For instance, how involved should they be in the business affairs of their franchisees? I raise this because of a fascinating discussion I recently had with a group of franchisees. They were debating the extent to which they were prepared to “open their kimonos” to their franchisor. Some said they would welcome their franchisor’s full involvement with their business, while others were suspicious of the value, or wisdom, of sharing too much information. 

I personally don’t see how a franchisor can provide relevant, effective business support if they don’t understand the franchisee’s goals and performance on the key business metrics that drive profitability. Here are several other responsibilities I reckon a franchisor has: 

Provide leadership that franchisees are willing to follow. This means you must have a clear, well thought out direction for the network and a competent team to execute this. Most importantly, but often neglected, you must demonstrate you can be trusted and you genuinely care about the success of your franchisees.
Does your leadership team have this type of credibility in the eyes of franchisees? 

Understand the aspirations of your franchisees. Success means different things to different people so you need to take time to understand each franchisee’s expectations and goals. Because these will change, an annual review of priorities is probably a good idea. Ideally this would be with a field consultant but, if they’re not up to it, a senior executive may need to be involved.
Are you aware of what’s driving each of your franchisees? 

Promote and protect the brand. Your brand is your reputation. A great reputation takes millions of dollars and years of hard work by a lot of people to build. But it can be destroyed instantly by the foolish or careless actions of one person. Franchisors can’t be too vigilant when it comes to brand protection.
Do your team, your franchisees, and your franchisees’ staff understand their role in protecting the brand? 

Ensure the business model and systems work. This means they are relevant to customer needs, are consistent with your brand, and produce an adequate financial return for all parties. It also means a franchisor has to be open to change if the model isn’t up to scratch. Listening to franchisee feedback on these issues is easy to say but difficult to do because we get defensive. 
How open are you to feedback on areas that need improving? 

Ensure the business remains vital and growing. A vital business has a healthy culture. People should be glad they joined your network, collaborating with each other and working hard to grow your brand’s positive reputation and market share. Of course this comes back to good leadership because ultimately, culture comes from the top.  

A good measure of a healthy culture is people who are happy to open their kimonos because they know they won’t be taken advantage of.  

Until next time,
Greg Nathan
Founder
Franchise Relationships Institute  

We so appreciate Greg’s keen insights and relevant reminders of what it really takes to build a happy, healthy and profitable franchise system – relationships built on integrity, caring, willingness to take feedback (on both sides of the relationship), and an ability to be nimble for the good of the company.    

And THAT’s a world where everyone wins!  

More soon!  

Katrina