Retail Trends 2019



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The 4 phases of a franchise business relationship

The relationship between the franchisor and franchisee is often overlooked by people who are starting out in franchising.
According to Riaan Fouche, chief operations officer of franchising at FNB Business says, this is one of the biggest mistakes that one can do because it creates a lack of mutual understating, and has a direct correlation to the 10% failure rate in franchising.

“One of the things that franchisors should manage is a healthy relationship with franchisees and that requires a multitude of human relations skills paired with technical support structures that enable a win-win approach between the two parties,” Fouche says.

Here, he shares four phases of the franchising relationship dynamic as per the renowned franchise relationship expert, Greg Nathan:

The courting phase: This is the creation phase of a relationship; both parties are communicating and making an effort to enter into a business relationship. Franchisees and franchisors must have clarity on the relationship and business goals.

The 'we' phase: This is the ideal phase to be at for franchisors and franchisees, working side by side to understand each other’s needs and fulfill them. However, a number of people neglect it which leads to misunderstandings and franchisees opting out of business.

The 'me' phase: This is where franchisees start asking questions about whether they could do better on their own. This phase is a result of neglecting previous phases and not maintaining them.

The 'rebel' phase: In this phase franchisees don’t want to hear anything they just want out.

“It is expected that many franchisors will be thin on time. However, this shouldn’t be an excuse for franchisors to neglect communicating and giving constructive feedback to franchisees. Creating two way and open communication enables franchises to grow their profit margins and higher more employees, which in the end is beneficial to all parties,” concludes Fouche.
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