If you are a franchisor, you can’t simply keep all of your franchisees happy, no matter how well you set the SOP (a.k.a. the “game plan”) and how hard you try to please your franchisees.
The cold hard truth is, “bad” franchisees will nag, whine, and even stab at your back no matter how perfect your franchise is – They simply can’t be pleased.
The truth is even worse if you are a franchisee. Your fellow franchisee that has a bad attitude toward the franchise can also impact your franchise unit.
Why “bad” franchisee is bad for your franchise, whether you are the franchisor or a fellow franchisee?
Franchising is all about brand image
As a franchisee, you “hire” your franchisor’s brand name for a period of time (5 or 10 years, even more – renewable), in a way that every single benefit it brings to the franchise company is ‘transferred’ to you.
Your business is no longer unknown, thanks to the branding (the name, the shop design, the uniforms, the SOP, etc.) of your franchise – This is why franchise fees and royalties are relatively expensive but justifiable.
If a customer or client went public on how bad the franchise is, the negative reputation hit the brand name and every entity holding it, namely, your franchisor, your fellow franchisees, and… you. This is why brand management in franchising is paramount.
Not only customers or clients, your fellow franchisees can also be dissatisfied with the franchise. Unfortunately, what should stay inside (e.g. discuss with the franchisor about the issues) can leaks outside – Thanks to the unprofessional franchisees; A dissatisfied franchisee going public can make disastrous effect, indeed, and the collateral damage is multiplied.
What impact a franchisee will impact the franchisor, too, in a much larger scale, I must say. The franchisor could lose credibility and ‘repairing’ the negative brand reputation is resource-intensive.
Why a seemingly unfair franchise agreement is actually for you to benefit from
Thankfully, more and more franchisors are aware that they need to profile franchisees: The cooperative ones and the non-cooperative ones.
More experienced franchises are laying out a strict ground rule, laid out in the franchise agreement, that enable them to sack “bad” franchisees for the benefit of the whole franchise business. This is mainly the reason why some franchisees and business experts said that franchising is not a fair business model.
The truth is, lengthy discussions are simply not effective (explaining why the franchisor should sack the “bad” franchisee is not effective, either) – Quite often, discussions could become ‘quarrels’ that are non-beneficial for the franchise.
Franchises solve the problem differently – Some are forming a ‘board of franchisees’ – A franchisee representative group, in which the member is a select few of franchisees that are obviously are more than willing to solve things for the benefit of the franchise, instead of pointing fingers. Some others are simply going face-to-face with the franchisees.
So, I conclude that being uncooperative is not the way to go with franchising. If you think you don’t like your franchisor’s idea and you simply couldn’t bear it, then quitting the franchise is the only way to go, rather than destroying the franchise from the inside (e.g. a lawsuit)
Of course, the best advice I can give to avoid all of the above to happen is by exploring thoroughly before you decide to buy a franchise.
If you are interested in exploring the “bad” franchisee, “good” franchisee dynamics, I recommend you to read this amazing book on ‘streetwise’ franchising, Street Smart Franchising by Joe Mathews, Don DeBolt and Deb Percival.
Ivan Widjaya
Being a cooperative franchisee
Image by sergis blog.
