Franchise Advice
A
common problem for most mature franchisors is striking the right balance between encouraging a franchisee’s initiative and controlling its
outcome. It is generally accepted that one of the primary obligations of a franchisor is to expend resources on research and development, thereby ensuring that a franchise concept continues to enjoy its customer loyalty and is able to take on the competition.
The fruits of your franchisor’s labour, however, need to be proven to work successfully in the market place. Market testing an idea with one franchisee does this best. If successful, the second challenge for your franchisor is to roll it out throughout the franchise network by ensuring that the know-how required could be transferred to the franchisees so that they can replicate the innovation. All this takes times and patience on the part
of franchisees, especially in those cases where the product or service in question needs time to gain customer acceptance. Most franchisors are keen to encourage you to put forward ideas but it is for the franchisor to then determine what should happen to those ideas and how they are to be introduced into the franchisor’s proven system.
Some franchisees will readily off er their businesses for market testing purposes whilst others will be reluctant to take on anything that is new. Between the two you’ll fi nd the type of franchisee who is keen to do their own thing irrespective of the franchisor’s game plan. A strong relationship and teamwork will help your franchise business and the franchise network to grow. There have certainly been cases when a franchisee has suddenly announced to other franchisees and/or their franchisor that they have had a wonderful idea, and
About the author
Manzoor Ishani is senior solicitor consultant with Sherrards Solicitors LLP – advisers to franchisors and franchisees in the UK and internationally – and has specialised in franchising for more than 35 years. He is a former member of the legal committee of the bfa and is co-author of several books on franchising at home and abroad.
knows that it is wonderful because they have tried it in their own unit and it works! In a case like this, the franchisor has little option but to nip this little private initiative in the bud, which can easily be done if the franchise agreement sets out very clearly the rules concerning improvements to the system. If not, and if the idea belonged to the franchisee and his franchisor permitted the franchisee to generally “try it out” at his outlet, the franchisor could be heading for trouble.
The key to franchise success is uniformity and it behoves all franchisees to ensure that there is uniformity in the way they operate their system, their marketing image and in the provision of their products or services to the customer. This cannot happen if the relationship between franchisor and franchisee is diffi cult and a franchisee takes it upon themselves ‘to do their own thing’, in their own time and in their own way.
May 2017 |
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