Your best mate is your confidante, partner in crime, and go-to in a crisis. But should you buy a franchise with them?

Jason Gehrke, director at the Franchise Advisory Centre, says that the benefits of partnering with a best friend in a franchise is that it “spreads the risk” and “reduces the amount of capital you need” to invest. Teaming up with a mate also gives you someone to rely on to run the business when you’re not there. 

However, it’s not that simple. Gehrke says that partnerships with a best friend can be unpleasant “when you don’t have a partnership agreement in place”. He believes that without the agreement, there is no way to see how the roles are clearly delineated. Franchise partners should be aware of what is expected, business goals, and their respective KPIs aligned with those business goals.

If this doesn’t happen, the attribution of blame can occur if the franchise fails. Gehrke says that challenges rise when expectations are too diverse, where one friend could be keeping an eye on the risks while the other has an idealistic approach.

“Complementary skills do better,” he advises.  “You don’t even need to partner with a best mate or start as a best mate.”

As long as you “share the same values, see the same opportunities for the business”, and acknowledge and trust each other’s skills, partnerships can be fruitful.

His key points of advice are to:

• Always do a business plan
• Track performance of business against the business plan
• Make sure to have a partnership agreement
• Ensure to have a clear idea of each partner’s role in the business

Rob Toth, partner at Marsh & Maher Lawyers, says there are both benefits and challenges to franchising with a best friend.

“Partnering can be financially and operationally helpful,” he says.

Toth outlines the benefits of franchising with a friend as:

• Funding: franchising is a substantial investment. Partners can share the burden of upfront costs and the risk.
• Roles: partners can help with managing and sharing work hours (particularly relevant in retail).

However, he warns that franchising can make or break a friendship because “perception is everything”.

Challenges that come with partnering with a bestie:

• Decision making: it’s important for both friends to enter a franchise on equal footing, because problems can occur when it comes to the distribution of profits.
• Managing expectations: guidelines should be set about roles to ensure there aren’t “too many cooks”

“Business is business,” says Toth. “It’s a different headspace from friendship.”

Sometimes partnering a best friend turns out to be not what was expected by both parties, and is also not simple to exit legally.

Toth advises against franchising with a best friend unless “lines are drawn up front”.

“There will be potential risks to the friendship, think carefully, and be upfront. A partnership agreement is key.”

So who is making it work?

Professional building besties: drawing the line

Adrian Willingham and Brenton Simpson are two mates who come from construction backgrounds and are joint franchisees at Hotondo Homes Ballarat.

Willingham finds the best part of franchising with a best friend is that it allows you to “have a clear understanding of both your skills and attributes”.

Teaming up with a best friend enables franchisees to spread out the responsibilities, develop professionally, optimise both sets of skills, and share different opinions.

However, the challenges are delineating each person’s role, and managing a work life balance.

“It’s pivotal that you’re both aware of the role you’ll each play,” he explains.

He also highlights the importance of communication and says “having the same (business) goals is crucial”.

“Business is business and friendship is friendship. Don’t blur the lines,” advises Willingham.

Zaraffa’s Coffee: a united front

Current franchisees of Zarraffa’s Coffee Richlands in Queensland are Brett Kochner and Terry Fleming, who became best friends when their kids started preschool. The pair has also worked together in the past. 

Kochner says the best part of franchising with a best friend is that they can both celebrate the wins and get through the challenges together.

“I am very lucky, Terry is like a brother to me,” he says. “I can share anything with him and be supported and never judged.”

Kochner believes that working with a best friend has simplified to task of franchising because he is able to rely on Fleming if he went on holiday.

“You have nothing to worry about because you have someone running the business with your best interests at heart.”

He says that like any relationship, franchising with a mate can come with challenges, but nothing that can’t be sorted out.

“The important thing in my opinion is to have the same value system and moral code. Terry’s values and moral code are just like mine,” explains Kochner.

His advice for potential franchisees thinking about teaming up with a best friend is to trust them and manage expectations.

“Trust your mate’s judgement, never take things personally and don’t expect your mate to be perfect, because I know I’m not.”