The Changing Franchise Relationship

The relationship between franchisors and franchisees has traditionally been a hierarchical one with franchisors firmly planted at the top. But as in life, nothing stays the same forever. Over the past few years, there has been a dramatic shift in the balance of power. In particular, the summer of 2014 saw two major judgments that underscored the changing times. While these two rulings address different parts of franchise operation, they both serve as actions seeking to level the balance of power between the franchisor and the franchisee.

When Culture is Out of Alignment

In a franchise relationship it takes the franchisor to take the bull by the horns and lead the charge. It takes full commitment to open, honest, transparent communications. Even through difficult scenarios. After all, franchisees have made a significant investment and they do need to understand the good, bad and ugly. The precarious issue is, how much is too much? do franchisees need to know everything? Getting back to square one, a benchmark of sorts is critical as emotions running high will dictate more rather than less.