Lesson 2: The Franchise relationship, some franchising myths.

5) What are the roles and the goals of franchisors and franchise owners?

Franchise owners in any system need to recognise the natural tension between the Franchis or and Franchise owner.The Franchis or wa nts to spend his money attract ing more franchise owners.Dav id Levin, Action International says 'the Franchise owners want more help getting leads and more clients.If franchisors spend all their money getting more franchise owners, they are not helping you '.

Remember the most common reasons for failure to make franchises a success are that the owners are not fully prepared, they are abs ent owners and mistakes are made which are not addressed earl ier enough ; the businesses fail to recover. Successful franchisor s have been through the experience and survived. The road map they provide to survive those challenges is part of what franchise owners pay for when they buy the Franchise.

The Franchis or has a very important and justifie d reason for providing his best assistance. The whole franchise network must grow, prosper and produce profits.His goal is to provide a great system ; his Franchise owners do well, make money stay in business, expand their Franchise and continue paying fees.As the Franchisor's brand value increases and becomes better known, more people grow to rely on it and more people seek out the brand at the new Franchise outlet ; more people show an interest in becoming eventual franchise owners selling the brand.

Who makes up the Franchis or fraternity ? Often the owners are large public or private compan ies with their founders.Sometimes former franchise owners who have bought their compan ies from the ir original founders.Equally they could be large conglomerate s or international companies.Franchisors can start with a great deal of franchis ing experience, enabling them to pass the experience on to their networks ; or franchis ors may have little or no experience, rely ing on experience gained in their networks wi th just one or two franchise owners.Every franchise is not the same, so the relationships vary.The relationship may well change as a business develops and grows.

Problems lie ahead if a franchise owner is not prepared to absorb the complete Franchisor's business model, contained in the operating manuals and starts to operate differently.

When relationships sour between franchis ors a nd franchise owners, they can be healed but both parties must be willing to negotiate and w ork together in good faith.

As a franchise owner who has invested time and money, you will want assurances that the Franchis or will be around to provide support over the long term.

• Look for values and integrity in your first dealings with your potential franchisor.
• It is great to pick an activity you like and have a passion about, but it is even smarter to fit this scenario in the right market place with the right Franchisor.
• Select a franchise with your head not just with your heart.

How can the relationship be defined?
Partner, yes, but not legally.They are in this business arrangement together ; each partner has a role and each partner depends on the performance of the other. But they are not equal partners; because only franchisors can make system wide decision changes, they are the senior 'partners '.

Franchisors provide the system ; the Franchise owners the capital and the labour ; but in the best systems, discussion takes place and the network moves forward.Remember franchisors have a responsibility to firstly look after their own best interests and then second ly the Franchise owner's best interests. Of course one cannot succeed without the other and in the best Franchise networks their mutual relationship has been well developed.

Who are the kinds of people franchising attracts? People like yourself, who enjoy the business environment with its successes and its challenges. Perhaps recent managers and executives, who appreciate the work commitment of their employees, are familiar with budgets, market and strategic planning are the most prevalent.

However, you can expect that the most successful new business owners are those that have matched their experiences, their strengths and their interests, to an activity and to a particular network that was able to identify these positives and use them. Remember, if there is disquiet between franchise owners and their franchisors, customers may well hear about it and take their business to a less contentious competitor.

In dealing with franchisors and franchises, always consider your own interests, the skills and experience you have accumulated over your working life and then identify the type of business activity that will be right for you.

• Can you sell; can your skills be improved?
• Corporate UK has become unattractive, you are weary of actual or threatened redundancy, and you feel you now want to be directly involved in your own security and future earnings.
• You want a more ' hands on ' involvement in business.
• Perhaps you do not want to be fully entrepreneurial; you are a hard-working independent personality and would appreciate the supporting framework the Franchis or could supply.

When selecting a franchise do not just look at the industries wh ere you have work ed before, consider your transferable strength s and skills.Remember you will not be just working in the fast food industry or the engineering industry you are working in the Franchising industry.

• You may be strong in operations and management.
• You may prefer a business with few employees, more reasonable operating hours.
• You may want to avoid technological franchises or feel you do want to be selling to businesses where you feel you have had no prior experience.

Before finally selecting the Franchise, take a real hard look at the business area you want to be in a nd where you feel you will be really happy working in. You may have very relevant business to business skills. Do you want to be working through the night or at weekends? There is a chance here to match your personality, previous experience, future goals and life style choices to an opportunity, giving you increased income, security and job satisfaction. 

Do not be persuaded by the low cost of the initial fee w hen mak ing your final selection.Look for quality in a franchise set-up and its products or services.Go for earnings potential.The products offered should not always be sold on price alone; look for well made products and services completed on time.

• Do not join up with a mediocre company.
• Do not invest in a particular franchise simply on the basis that you can afford that one.

Because a franchise system covers a large area, information collected can more accurately support the Franchisor's claims of his proven marketing success. Always keep reality in mind, when face-to-face with franchis or companies, try ing to sell their franchises. The y will always put the best interpretation on the opportunities. Remember you are buying a system, not a franchisor's presentation.  For many small franchises, their customers are buying on the basis of a good product and the relationship and reputation you have built up with them.  Do not always believe the hype given; it will take persistence, the Franchise 's reputation, client satisfaction, to achieve some of the results, which the Franchisors ' for ecast. You need to feel comfortable in your early discussions with franchisors you approach ; do you think a sense of belonging can immerge with any of those you short listed?

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