7 Common Myths About the Franchise Relationship

Over the years, we have regularly received calls from people who are frustrated by the behaviour of their franchisor or franchisees. This is commonly caused by faulty beliefs about the nature of franchise relationship. Here are seven common myths that we discuss as part of our Culture of Franchising Workshops.

MYTH #1: Franchisees are customers of the franchisor.
Reality: While being service-focused is vital when working with franchisees, they are not your customers. The customer is the person who buys products or services from your franchisees. Calling franchisees' customers just creates confusion.

MYTH #2: It is good for franchisor executives to be friends with franchisees.
Reality: While being friendly is a great way to do business, being friends creates role confusion and leaves franchisor executives open to manipulation. Always keep franchise relationships professional and purposeful.

MYTH #3: Franchisees and franchisors share the same priorities and assumptions.
Reality: While members of a franchisor team will tend to have a strategic, long-term focus, franchisees are usually focused on immediate tactical challenges such as looking after customers, managing cash flow, and keeping their business profitable.

MYTH 4: A franchisee who is making money will be happy.
Reality: While an unprofitable franchisee is unlikely to be happy, highly profitable franchisees can sometimes be very unhappy. They may feel disappointed at not being consulted on important issues, or frustrated that franchisor decisions are not fair.

MYTH 5: Good franchisees don’t question or challenge a franchisor’s decisions.
Reality: While cynical franchisees who criticise everything can be a challenge, good franchisees are healthy sceptics. They ask direct, curious questions that test assumptions behind important strategies. Only if this makes sense, will they then support an initiative.

MYTH 6: Good employee management practices apply to franchising.
Reality: Because of their direct investment in their business, franchisees think more like employers than employees. Do not expect them to just do what you say. They expect to have a level of autonomy and control in how they run their business.

MYTH 7: Fairness means franchisees should have an equal say in key decisions.
Reality: While consultation is a useful and important process (which involves genuinely listening to the views of franchisees before making final decisions), a franchise network is not a democracy where all decisions are put to a vote or where franchisees have an equal say.