10 franchisor mistakes that annoy franchisees

By Greg Nathan | 11 Sep 2019 View comments

What are the common franchisor slip-ups which put franchisees in a spin? Here are 10 common examples of mistakes we regularly see through our work at The Franchise Relationships Institute.

10 franchisor mistakes that annoy franchisees

  1. Making business decisions that are seen to benefit the franchisor’s short-term interests, but have no perceived benefit to franchisees. Or worse still are seen to disadvantage franchisees. For instance, reducing support office resources to save money, or selling additional franchises near their businesses which cannibalise their sales.
  2. Not passing the benefits of group buying power onto franchisees and justifying this by saying they are paying a competitive market price. Franchisees expect to get better than just a competitive price if they are part of a large buying group.
  3. Not respecting the tenure or history of mature franchisees. For instance, a new CEO big noting themselves while not acknowledging the many years of hard work put in by long tenure franchisees.
  4. Releasing new initiatives that have not been pilot tested in a range of businesses that represent the different types of markets franchisees operate in. For instance just pilot testing in a few company owned units. Or worse still not properly testing new initiatives, such as software upgrades, before releasing them.
  5. Treating franchisees like they are employees or beholden to the franchisor, rather than as independent business owners. For instance assuming they will just do what the franchisor wants them to do without properly explaining the rationale and asking for their input.
  6. Not acknowledging that franchisees survive on profits while franchisors survive on sales royalties. For instance when a franchisor boasts of overall sales growth in the network when there has been a decline in profit margins. Or promoting discounted products to keep sales up when there is no profit in these sales.
  7. Forgetting to keep franchisees up to date with the details of changes that impact on them. For instance assuming that they will be happy to hear about changes in a few months at the convention when they are worried today about how these changes will impact on them.
  8. Using longwinded corporate jargon to make strategic initiatives sound grand and impressive, instead of using plain English that addresses their day to day interests, needs and concerns. Also talking at them during conferences and not allowing adequate time for quality two-way communication.
  9. Accusing franchisees of being negative when they raise questions about initiatives that are likely to impact on them. Also when franchisors becoming defensive if they receive feedback on how they could improve their support or performance.
  10. Not paying attention in meetings when franchisees have given up their time to attend these meetings. For instance when franchisor executives sit at the back of the room on their phones or computers, or leave these meetings early, it sends a message to franchisees that they are not important.

What can you do to smooth the relationship between the franchisor team and franchisees?