How Franchisees and Franchisors Can Master Their Relationship

In the world of business, the relationship between a franchisor and a franchisee is indisputably unique.

Some liken it to a partnership, but in fact, it’s nothing of the sort. In a partnership, interests of both parties are directly aligned. And while the best franchise systems work to actively align franchisor and franchisee goals, at the end of the day, the franchisor’s financial interests are met by increasing franchisee revenues, while a franchisee’s interests are met by increasing profits.

Others liken the relationship to a marriage. But still, it is unlike (most) marriages in that the franchisor has almost all the power -- at least when it comes to brand standards. It’s also nothing like a traditional employer-employee relationship. Franchisors govern by contract; they cannot hire, fire, or discipline franchisees the way they would with an employee.

So perhaps the closest analogy is in fact that of a parent-child relationship: A franchisee starts out dependent on the franchisor for everything, then gradually becomes more independent (and perhaps even grows rebellious), but is ultimately required to follow the rules that the franchisor sets.

Franchisors have both the right and the obligation to enforce system standards, but their franchisees are independent business owners who can call their own shots on day-to-day operational decisions that do not impact brand standards. Franchisors have to remember that.

Related: How Going From Owner to Employee Made This Entrepreneur a Better Leader

This is why both sides need to come together, at the very start, to make sure their relationship gets off on the right foot and stays strong. In