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Log In / Register | Feb 9, 2010

Three Ways to Prevent Franchisee Unrest

Posted Sat, 2009/06/20 - 09:32 by Darnelle White

Franchise owner-operators share their thoughts on what would have turned their frown upside-down at UnhappyFranchisee.com. Here are three top ways franchisors can create happier franchisees.

  1. Do not encroach on franchise territories. It hurts the franchise store's business when the franchisor sets up a shop down the block or oversells to the point where there is a glut of franchise shops.

  2. Build brand awareness and image. Advertise.

  3. Create a franchise agreement that is fair for all parties

Honorable mention: Enforce compliance standards equally for all franchise owners

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One more would help... by Guest
Submitted by Guest on Sat, 2009/06/20 - 21:25.
Great list. I agree completely. I'd just add one more...don't redefine the brand to the point where your store is no longer located in the correct location for the concept. In my case my franchise targeted upscale customers and I paid heavily to locate in an upscale location. Now the concept is branding itself as the cheap choice and I'm losing my investment.
Darnelle I agree with many of the solutions you suggest by Barbara Jorgensen
Barbara Jorgensen's picture
Submitted by Barbara Jorgensen on Sat, 2009/06/20 - 12:00.

will help.

l.  Encroachment problems:  The only way to solve this at the very beginning.  If an FDD says no territories, insist adding an addendum to the agreement.  "Territory rights with a 5 mile radius."

2.  Advertising funds in rogue systems will insist they have complete control.  Most FDD;s will tell you where the advertising funds will go.  It is written with less than concrete language.  "We intend to advertise."  Then they say it may go for business travel.  Keeping up the website of the company is another thing they will say.  Truth the money is at their disposal.  

3. Create a franchise agreement that is fair:  This will be the ultimate achievement in the world of franchising. 

 If a franchise is selling a proven system and most of the zees are failing, especially the first generation there needs to be an easier way out for the zee.  The way it is now bankruptcy is the only solution.

The zor needs to prove he or she has battle tested their system.  Not they have developed a system but they have indeed used their own money and reached success on their own in several locations. 

Many times zors will use public figures to sell their franchises.  If they do the FDD needs to be clear about their involvement in the franchise.  Endorsing is not enough for me.  People need to know the CEO knows how to build the choice of business you go into. 

Discussing the FDD could take hours. 

Darnelle I agree with your blog. 

Is this all there is? by Guest
Submitted by Guest on Sat, 2009/06/20 - 23:47.
things have 'err shrunk in these parts. See you in a few weeks.
Franchisee Unrest by John Power
John Power's picture
Submitted by John Power on Sat, 2009/06/20 - 14:18.
The franchisor/franchisee relationship must be mutually beneficial in order for either party to be successful. In addition to the suggestions mentioned, it is also important that: 1. The franchisor constantly look for ways to use the buying power and clout of the system to improve the franchisee's methods, procedures, and sourcing, to the benfit of the franchisees. This should be one fo the basic efforts of franchisors. 2. The franchisees must feel that the franchisor has a sincere interest in their success and will make a significant effort to help them be successful. 3. There must be ongoing communication with questions answered quickly, complaints resolved where possible, and small problems addressed before they become big problems. 4. Every success, every achievement, ever noteworthy accomplishment by franchisees must be recognized. 5. Franchisors must be open to new ideas, better ways of doing things, beneficial changes, and system enhancements suggested by zees. It is not possible to adapt every suggestion, but implementing them where possible will help keep the group happy. There are other elements. These are just a few thoughts. John Power Biltmore Franchise Consulting www.biltmorefranchise.com
John Power Biltmore Franchise Consulting
Nice ads for Biltmore by Guest
Submitted by Guest on Sat, 2009/06/20 - 23:50.
But... your website shows that you have no clue regarding franchising. The great attempts of BMM to advance franchise quality are poorly used.
We call this ... by Ray Borradale
Ray Borradale's picture
Submitted by Ray Borradale on Sun, 2009/06/21 - 03:58.

We call this collaboration, ethics, mutual benefit, accountability and transparency.  If we are going to educate franchisors then we can go to the fundamentals.

If we want to provide examples of how to create the franchisee network from hell then we can go to the multitude of historic examples.

All you franchisees can agree with the examples and you franchisors can ponder 5 critical needs and if you need them broken down to examples then you should not be in business.  Where does the 5 sit in your franchise?

The more things change; the more they stay the same.

Re: We call this ... by Guest
Submitted by Guest on Mon, 2009/06/22 - 10:16.
At the end of the day, the most ideal situation is to have the franchising industry itself, police the rogue franchisors. Why would the hard working and collaborative franchisors, who are ethical, put up with the fly-by-night frachisors who give the industry black marks? I agree that the Golden Rule is the best measure for success. Just keep hammering away with your message, and hope that more and more perspective franchisees read this and other blogs, and come to learn the difference between the good guys and the rogues, by understanding the FDD's. Thanks for all you do here to inform.