franchise opportunity

Building the perfect franchise partnership

By Rick Villalpando

The success or failure of a business is contingent on the strength of its partnerships. This is particularly true in the franchise industry and the partnership between franchisor and franchisee, which creates the foundation for the long-term success and profitability of the business. Below are tips, based on more than 25 years of franchise experience, to help build the perfect partnership.

Find a passion

The perfect franchise partnership begins with the franchisee choosing a business that aligns with their interests. If the franchisee is not passionate about the business they are investing in, it will impact the company culture and the overall bottom line. For example, if a franchisee doesn’t enjoy dealing with people, the restaurant industry will not be the best fit.

When a franchisee is passionate about what they do, that feeling resonates in every facet of the business and will be reflected in their return on investment. Overall, the goal of a franchisor is to build a network of franchisees that share the same level of commitment to the company.

Discuss values

A franchisor-franchisee agreement is a long-term commitment—they often begin as a 10-year term—so each party must share the same fundamental values and ensure these values align with the company’s business model. This does not mean that the franchisor and franchisee must agree all the time, but they should be on the same page when it comes to business goals and support one another to achieve them.

Build a reciprocal relationship

The relationship between a franchisor and franchisee should be a reciprocal one. From the outset, the franchisor and franchisee will have an agreement in which both parties are equally important to achieve bottom-line results. Franchisors bring with them a recognized brand, purchasing power, supplier relationships and consistent systems to help franchisees learn and succeed. Apart from the agreed upon fees, franchisees agree to execute, with excellence, the franchisor’s business model while providing quality customer service and acquiring and maintaining a loyal customer base. The franchisor should be fair, honest, truthful and willing to listen and learn from their franchisees in the same way they expect franchisees to learn from them.

franchise communication

Utilize available resources

Before beginning a franchise partnership, the franchisee should make sure there are training programs in place that provide adequate resources to help them thrive as a business owner. The franchisor should offer support and guidance every step of the way—from site selection to employee training and marketing efforts.

But to make the most of these resources, franchisors and franchisees need to maintain frequent, two-way communication. This means responding to one another in a reasonable timeframe, communicating on a regular basis and addressing any concerns head-on. Online training platforms and intranet sites that provide 24/7 access to company resources should also be available to the franchisee. While online resources are beneficial, a franchisor should make a concerted effort to arrange in-person store visits with each franchisee to review procedures and provide constructive feedback.

Look for growth opportunities

Before entering into a franchise partnership, a prospective franchisee should research opportunities to grow within their company of choice. A franchisor should encourage their franchisee to grow and improve while recognizing their efforts and milestones achieved. If the head office of a company is dedicated to promoting employees internally, this should also be communicated within the franchisor-franchisee partnership so franchisees know which opportunities are available to them.

Above all, remember that establishing the perfect partnership takes work. A positive, long-lasting partnership combines trust, credibility and opportunities to grow. When the above points are taken into consideration, franchisees and franchisors can build the foundation for a partnership that generates tangible results and grows stronger in the future.

About the author:

Rick Villalpando is senior vice-president (SVP) of business development for RAMMP Hospitality Brands, the franchisor of Mr. Mikes SteakhouseCasual restaurants, based in Burnaby, B.C.