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Keeping the peace between franchisees will save you both time and money

Written by Eric Johansson on Monday, 17 July 2017. Posted in People

Every minute franchisees spend arguing with each other is more money wasted. Fortunately there are plenty of things franchisors can do to avoid conflicts from flaring up

Keeping the peace between franchisees will save you both time and money

From arguing about territories to disagreeing about how the business should be run, there are plenty of reasons why franchisees may end up at odds with each other. But no matter how arguments blaze up, without fail they’re bad for business. “Conflicts are very time-consuming and always unnecessary,” says Rik Hellewell, managing director and founder of Ovenu, the oven-cleaning franchise.

Whether or not the issue is so serious that it requires lengthy litigation or only necessitates the franchisor to display some savoir faire, the end result of conflicts is always the same. “They distract from what you’re trying to achieve,” says Louise Harris, franchise director at Wilkins Chimney Sweep, the chimney-sweeping franchise. “Franchisees are in it to build their business.” However, every second they and their franchisor spend resolving internal spats is a second not devoted to boosting sales, building a stronger customer base and improving the situation for everyone in the network. “Stopping conflicts means that you’re stopping internal stupidity,” says Harris.

Fortunately, there are plenty of things a franchisor can do to avoid franchisees squaring up to each other, starting with recruiting the right people to the network. “We always ask ourselves if we like them and if our customers would like them,” says Harris. She argues that likability serves as a good litmus test for candidates’ suitability for the role and how well they’ll get along with other franchisees in the network. This approach has served Wilkins Chimney Sweep in good stead and kept conflicts to a minimum. “Our franchisees aren’t confrontational,” she says. “They’re actually grownups and behave like it.”

Nevertheless, while following your gut instinct may be a good way to filter out bad candidates during the initial stages, it’s still important that franchisors do due diligence in their recruitment process. “We try to get sensible and straight-thinking franchisees,” says Hellewell. “To ensure this, we do proper background checks to see if they’ve been involved in things like the National Front or heavy amounts of trade-union activities. Basically we try to figure out if they’re shit-stirrers.” For Ovenu this includes checking if candidates have been disruptive in previous roles and looking at social-media profiles to ensure a good fit. “Never be afraid to look a bit deeper if you think someone is prone to whinging and moaning about everything,” says Hellewell.

However, satisfying yourself about franchisees’ suitability is only the first step toward protecting your franchise against future conflicts. The second is to not only ensure that your franchise agreement is watertight but also make sure that franchisees thoroughly understand it. “Make it blindingly obvious to franchisees from the get-go,” says Hellewell. Franchise agreements are complicated, legally binding contracts outlining everything from accepted supply chains to whether or not territories are exclusive. Given the complexities of these documents, ensuring that franchisees fully comprehend them not only makes sure they enter into the partnership with their eyes open but it can also protect the network against undesired internal squabbles brought on by simple misunderstandings. In other words, it’s not enough to just post the agreement on your website. Instead you must sit down and thoroughly explain the rules to new members and, vitally, what the sanctions are for breaking them. “Make it really obvious what happens if they’re a naughty boy or girl,” says Hellewell. Being clear will hopefully discourage most franchisees from breaking the rules and instigate unwanted conflicts.

If someone still breaks the rules it’s important that the franchisor responds accordingly. “You need to send out a really strong message,” says Hellewell. “It doesn’t matter if they’ve poached another franchisee’s customers or done something else inappropriate: the franchisor needs to show that it won’t be tolerated.” The severity of the transgression determines the appropriate sanction: some may only require stern warnings or the wrongdoer paying a fine. That being said, more severe cases could force franchisors to take the rule-breaking franchisee to court. “It’s not necessarily the best way to do things and it sure isn’t the cheapest but sometimes you need to make an example out of somebody,” says Hellewell.

While the nuclear option could definitely deter indiscretions in your network, Harris argues that establishing a collaborative culture could be just as effective. “Franchisees are dependent on one another for their welfare,” she says. Helping franchisees understand the strength of pulling in the same direction has enabled Wilkins Chimney Sweep to establish a culture where the people in the network openly share and seek advice. By recognising that they are in it together and that when they collaborate they can grow their business, the franchisees become less likely to waste time squabbling. “Collaboration and kindness means that everyone can support each other to reach that bigger goal,” says Harris. And the establishing a collaborative culture also means that difference of opinion won’t be something to dread. “You can turn a conflict into a positive discussion,” says Harris. One example she gives is when Wilkins Chimney Sweep had to upgrade one of their certificates. For years the franchisees had been satisfied using an older document that their clients signed on an iPad.

However, when one of the franchisees raised concerns that it needed to be updated half of the network agreed, while the other half wasn’t as enthusiastic about the changes because of the cost. “But the nature of the discussion and the end result was really positive,” says Harris. “They talked with and convinced each other what the best solution was.”

And even if conflicts do arise, having established a collaborative culture enables the franchisor to turn the issue into a constructive conversation rather than a full-blown row. “If you take the opportunity to discuss things as a grownup it can be very rewarding,” says Hellewell. If the franchisor provides a safe space and leads the discussion, a potentially heated argument can mean that franchisees themselves comes up with a solution that benefits the whole network. And clearing the air could help ensure that things go back to normal. “But the franchisor should step in if it looks as if they might start taking lumps out of each other,” he says.

Ultimately, establishing and growing a franchise is all about teamwork. If the franchisees all pull together in the same direction they can accomplish great things. So keeping the peace is definitely good for business.

About the Author

Eric Johansson

As web editor and resident Viking, Johansson ensures Elite Franchise is filled with engaging and eclectic entrepreneurial stories. While one of our most prolific franchise writers, he has sharpened his editorial teeth by writing about entertainment and fitness. Follow him on Twitter at @EricJohanssonLJ to catch up with his stream of consciousness.

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