New research from the Franchise Relationships Institute (FRI) has highlighted the importance of effective support systems in the franchise sector.
The report, to be published in the Journal of Business and Psychology indicated that a supportive culture helped franchisees to increase performance, and franchisor staff to better enjoy their work.
Franchisees who believed their franchisor team cared about their success were more proactive, had higher levels of brand passion and achieved stronger financial performance.
FRI’s Founder, Greg Nathan said the current state of franchising in Australia has put the spotlight on practices within the sector.
The current parliamentary inquiry into the Franchising Code of Conduct is underlining the importance of a healthy franchising culture, with Nathan suggesting the majority of negative franchisee submissions came from franchisees who believed their franchisors to be self-serving and lacking in empathy.
“It’s easy for the people who work in a franchisor’s head office to become disconnected from the daily challenges that franchisees face, such as unreasonable customers, unreliable staff, and declining profit margins” Nathan said.
As a result, franchisors often have to deal with emotionally charged situations, and talk with franchisees who are angry, impatient or upset.
“It’s vital franchisor staff know how to listen well and respond to franchisees in a direct and helpful manner. Sometimes the answer to a request will be ‘no we can’t do that’, however this can still be delivered in a caring, respectful manner” Nathan said.
Nathan, who was asked to give evidence at the parliamentary inquiry hearings said there is a growing need for franchisor teams to be trained in how to connect and communicate effectively with franchisees.
Consequently, the FRI is conducting a series of ‘Culture of Franchising’ workshops around the country in August.
“We will be using our research findings to explain what franchisees want, how to avoid the common mistakes that frustrate franchisees, and how to ensure Support Office Teams are doing the right thing to effectively support their franchisees,’ Nathan said.
Nathan believes for many franchisors it can be difficult to understand just how stressful running a small business can be.
“We have found that franchisor staff who have run or grown up in small businesses, are better able to connect and empathise with their franchisees.”
Mary Aldred, CEO of the Franchising Council of Australia (FCA) agreed that franchisees operating a small business were often too time poor to effectively address the variety of challenges the sector provided.
“Most franchisees are flat-out running their small businesses, so getting across complex issues can be a challenge,” Aldred said.
Aldred also called for greater information and education for franchisors within the sector, stating the FCA is committed to providing continued support on both sides of the fence.
“We are looking to list feedback, find out what the key areas are and how the FCA can help with information and resources to make sure that franchisees are supported.”
“We are providing better information and education for our members, and implementing a complaints process along with a number of activities focused on improving compliance.”
Moving forward, both Nathan and Aldred believe the rehashing of communication practices within the franchising sector will lead to greater prosperity on both sides.
More information about the Culture of Franchising workshops can be found at www.franchiserelationships.com.