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Merriam-Webster defines “the elephant in the room” as “an obvious major problem or issue that people avoid discussing or acknowledging.”
While the franchisee-franchisor relationship isn’t necessarily a major issue, it’s something that prospective franchisees tend to avoid by way of neglecting to make it one of their considerations when researching franchise opportunities.
However, prospective franchisees need to think about and get a feel for what their franchisee-franchisor relationship could be, especially as it relates to the franchises they’re looking into.
Here’s how to find out what the franchisor-franchisee relationship is like.
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Discovering The Franchise's Culture
One of the things I tell my clients to get an understanding of is the culture at franchise headquarters. Why? Because like with any company, the CEO and the other top-level executives determine what the company culture is. Let me give you an example of what I’m talking about.
I worked for dozens of companies before I became my own boss. Each of them had a different feel, depending on the temperament of the CEO.
For example, I remember working for a company that had a hot-tempered CEO. And as an added bonus, the #2 guy, my direct boss, did too.
If you were to ask me to come up with one word that describing the company culture, it would be “eggshells.” All of us walked around on eggshells. All the time. Waiting for a verbal explosion. It was quite unpleasant.
Of the course the opposite can be true, too.
I’ve worked for bosses who joked around a lot, creating a fun, positive workplace environment.
This is why it's important for you to determine what the atmosphere at franchise headquarters is like. “It all starts at the top.” It’s crucial for you to find out who is at the top of the franchise you're considering and what they’re like.
How do you meet the people at the top of the franchise? In franchising, it’s relatively easy to do. Attend a Discovery Day.
In case you’re not familiar with the concept of a Discovery Day, it’s when you visit franchise headquarters and meet the franchise support team.
That’s right, you’ll meet the administrative staff, department heads, and the executive team. In some cases, you’ll even be able to sit down and have a conversation with the CEO.
Key: Be a Keen Observer
The best way to get a feel of the culture at franchise headquarters is to become a keen observer.
Starting with your arrival, watch how the employees interact with your salesperson/representative when you're being introduced around.
Do they seem to like and respect that person, or do you have a feeling they’re only “going through the motions?”
Secondly, what are the department heads and the employees under them like?
Do they seem like they’re under a lot of stress, or are they confident and comfortable in their own skin?
(Tip: Ask every department head how long they’ve been employed there. Longevity can be a good thing! )
Thirdly, when you get to spend 1:1 time with the CEO or other high-level executives of the franchise, ask good questions. Like these:
“What do you look for in a franchisee?
“What is your vision for the company 5 years from now?”
“If you were to award me a franchise, what’s the #1 thing I should focus on that will help me become super-successful?”
Apart from listening to the answers, I want you to observe how comfortable (or uncomfortable) they are in answering those questions, along with any other questions you have. Doing so can tell you a lot about their management style and confidence as a CEO.
Relating Observations of the Culture at Headquarters to a Future Franchisor-Franchisee Relationship
Are you beginning to understand the importance of finding out what things are like at headquarters?
For instance, if the CEO is rather stiff, the atmosphere at headquarters probably reflects that. If that’s the case, you should expect your relationship with the company to lean towards formal and businesslike.
If, on the other hand, the CEO is outgoing and entertaining, the franchisor-franchisee relationship may be less formal and more open.
And while you’ll never know precisely how your relationship with headquarters will be until you become a franchisee, if you make a commitment to observe as much as you can during Discovery Day, there shouldn’t be any major surprises.
Finally, after you visit franchise headquarters, take out the notes you took when you talked to franchisees. See if what they told you about their relationship with headquarters matches what you observed.
If it does, that means you have an excellent feel for the what the culture is like and what you should expect when you become a franchisee.
If it doesn’t, that means you missed something.
The solution then?
Call some of the franchisees you spoke to and share what you observed. You may have misinterpreted a few things during your visit.
Whatever the case, at least you’ll know going in what to expect.
The Franchise King®, Joel Libava, is a top franchise expert. He’s written over 2,000 different articles on franchise ownership and personally consults with people who are looking to buy a profitable franchise. Go here to find out how The Franchise King® can help you become your own boss.