Nurturing the Franchisee-Franchisor Relationship is the Key to Overall System Success
Franchising remains one of the best pathways for inspiring entrepreneurs to own and operate a business. Thanks to the support they receive from the franchisor, franchisees can be successful if they put in the time and hard work. According to U.S. Bureau of Labor Statistics (BLS), about 20% of non-franchised independent businesses close their doors after two years.
The industry continues to grow each year as well. The U.S. Census Bureau states that 10.5% of all businesses are franchises, accounting for about 3% of the national GDP. While a recession has been an ongoing fear for 2023, many franchises expect growth in 2023.
Franchising continues to be a success, but none of it would be possible without the individuals responsible for its growth: the franchisees. The franchisor-franchisee relationship resembles that of a partnership or marriage. The two must be in sync with each other for success. In many cases, this includes recognizing the franchisee when they have exceeded expectations and proven to be dedicated to being successful.
Franchisee recognition ultimately ties into the overall culture of the franchise. It promotes a partnership mentality between the franchisee and the franchisor. In addition, it promotes a family-type of culture that many franchises embrace. From franchise growth to franchisee morale, here are the three reasons why franchisors should recognize the value of their franchisees.
Franchisees Are Your Brand
The no. 1 reason why you should recognize your franchisees is simple – they are your brand, period. They are the individuals who invested their money, time and future in the partnership with your franchise. While this is the case, they can easily feel disconnected from the corporate headquarters or other franchisees because they are not in the same office. Recognizing them when they perform well helps them feel a part of the larger franchise family and helps increase morale. In addition, many franchisees are competitive, so recognition helps affirm their achievements and build morale. When the franchisees are happy, the overall morale of the franchise increases. Plus, everyone enjoys recognition for a job well done.
The Desired Culture
For franchisors, it is also important to recognize your franchisees because it helps promote the desired culture at the franchisee unit level. Culture is everything when it comes to franchising. By recognizing your franchisees, you are showing that they matter on a companywide scale while building a caring culture that keeps franchisees happy. This doesn’t have to stop at the franchisor level, either. The franchisor can display this at the single-unit level as well. For example, at AlphaGraphics, we will give out gift cards for franchisees that go above and beyond. We also do lunches to help recognize special accomplishments. So, let’s say a franchisee has a record month or secures a sales achievement. We will cater and surprise them and their staff with a luncheon. This helps build an excellent culture with both the franchisee and their staff at the local level, which ultimately helps the overall morale of the franchise. We take the time to recognize our hard-working franchisees.
Growth of the Franchise
Ultimately, growth is a goal for any franchise system, which brings us to our third reason to recognize the value of your franchisees. It helps attract new franchisees. When franchisee candidates are working with your team to investigate the franchise, sharing an outstanding culture of recognition can be a determining factor for choosing you as a franchise partner. We’ve instilled this in our leadership team. If you look at your franchisees as partners and view them as the foundation of your brand, you will create a winning culture.