Traits of a Good Franchise

Establishing a franchise has many advantages–being the boss and working under no supervision.

A service-oriented operates like your ordinary franchise based on selling goods. A franchised business is owned by a franchisor who recruits a partner (franchisee) and starts a working relationship. Franchisees become the boss in their territories and assume all the privileges franchisors enjoy.

7 Key Traits of Successful Franchises

A thriving relationship between a franchisee and a franchisor is key to the growth and success of a franchise business model. The advantages of a positive relationship between franchisors and franchisees can include the following:

• Cutting expenses because good relationships help avoid costly litigations;
• Boosting brand reputation, and
• Increasing profitability.

A recent study on small, medium, large, and successful businesses identified critical factors to forming and maintaining thriving franchise relationships. The key characteristics include the following:

1. Alignment

A business’s and employees’ values and ethics must align to take a franchise from its infancy stage of growth to the next level. There should be consistency in the values, ethics, and behaviors of all the key players, such as employees, employers, and clients.

2. Commitment

Commitment helps build a long-term relationship between the transacting parties (franchisor and franchisee). Successful business relationships are built and thrive when the business partners do the work and trust each other.

Simply put, commitment focuses on long-term goals rather than short-term goals. The best way to build trust is by ensuring promises are fulfilled, and intentions are communicated openly and honestly.

3. Mutual interest

Unlike in other business models, such as sole proprietorship, mutual interest is critical in franchise relationships. Why? Because the objective of the primary parties (franchisor and franchisee) is to succeed in business. That said, each party should seek to understand their partners. In other words, each partner should try to understand their partner’s expectations and points of view and identify how mutual interests can be pursued. Another way of achieving common interests is by adopting a collaborative problem-solving approach.

4. Communication

Communication between franchisors and franchisees should be clear and transparent, and communication lines should always remain open. Proper communication channels ensure everyone is heard and understood, obligations are met, and issues or challenges are addressed promptly. Poor communication is widely blamed for broken business relationships, so maintaining good communication cannot be overemphasized. Always remember that lack of communication is the beginning of failure.

5. Accountability and responsibility

Business partners should always know they’re responsible for their actions, which encourages accountability. The franchise contract should contain each party’s obligations and responsibilities to avoid future mismatched expectations. Franchise contracts become binding and enforceable once signed, making each party more responsible because they know that any foolish mistake can be costly.

The franchise law regulates legal services franchises. A franchise attorney can offer legal advice on starting this type of franchise.