According to statistics, Australia is the most franchised nation in the world, with over a thousand franchises that work successfully. This model has helped several businesses grow and expand in ways that are impossible without considerable financial backing and a large number of employees.
However, it’s not easy to run a franchise business successfully; and a lot depends on the relationship between the franchisor and the franchisee. Many experts believe the relationship to be like a marriage because:
Yes, franchising is a very hands-off method of business management. You won’t need to deal with business capital, employees, and other such concerns because that would be the responsibility of the franchisee. But that doesn’t mean you don’t have any responsibility after you sell a franchise. You need to work with the franchisee to make sure the business is set up well and runs smoothly. After all, it’s still your brand name and reputation on the line. Franchising requires considerable amount of commitment on both sides.
Communication is essential for the success of any franchise. A franchisor needs to ensure the franchise follows all the brand requirements carefully, and doesn’t do anything to jeopardize the company’s reputation. If you don’t communicate clearly with your franchisee and explain what your company’s and customer’s expectations are, your franchise won’t work and your business wouldn’t succeed.
Both the franchisee and the parent company represent one brand. They need to work together to maintain brand identity and image. Both sides need to have the same strategy to deal with customers, the same marketing techniques, and the same rules & guidelines for employees. This helps keep the brand consistent everywhere and customers expect that consistency and uniformity from franchise stores.
Most business owners don’t realise just how much a franchisor and franchisee depend on each other. The franchisee needs a well-established brand with a thorough marketing campaign in place to succeed. They need the reputation and the customer base of an established brand to reap quick rewards. Conversely, franchisors need franchisees to establish a good brand reputation and expand their business presence. This dependency benefits both sides and make sure the business thrives.
Franchisors and franchisees influence each other’s success, because they’re deeply intertwined. If the brand is well-established, has a good reputation, and is successful, the customers will react positively to its franchises. They’ll trust the franchises like they trust the brand. So, the success of the brand helps establish the franchise and lets them earn good profit. However, of the brand suffers a hit on reputation or faces a major scandal, the business of the franchise would feel the brunt of it.
On the other hand, franchises are the street presence of the brand. They act as its representatives, and will influence customer opinion. If the franchise is well-maintained and offers good services, it’ll reflect positively on the brand. If the franchise offers bad service and draws ire of the customers, the brand reputation would suffer.
This is why experts in the franchise industry often consider franchising to be akin to marriage. Both parties need to work together to experience success.
If you want to know more about franchising or want some advice, feel free to get in touch with us at The Franchise Institute. You can call us on 1300 855 435or email us at shaunac@thefranchiseinstitute.com.au. You can also fill in this contact us form and we’ll reply as soon as we can.
Thanks for reading,
The Franchise Institute Team
1300 855 435
