I have reviewed hundreds of franchise disclosure documents (FDDs) and franchise agreements at this point in my career. And mostly, my review always solicits one question in my mind:
Do franchisors need these overwhelmingly restrictive franchise agreements?
Most FDDs and franchise agreements disclaim just about any real obligation to do anything on behalf of franchisees. Don’t believe me? Read them yourself. Show me where I am wrong.
Don’t franchisors have some obligation to support their franchisees and help them be successful financially? And while that seems like a simple thought most franchisors should have, I can tell you from experience it is not a common mindset. Many franchisors, from what I can tell, do not really care all that much about franchisees. What they care most about is receiving fees. They care about protecting themselves against defaulting franchisees. And they care about their own interests often to the detriment of franchisees.
What I am NOT suggesting is that franchisors should put franchisees first. Of course franchisors need to protect their businesses and systems. Of course franchisors should be concerned about their own profitability. What I am suggesting is that franchisors take a franchisee-centered approach. What does a franchisee-centered approach entail? To me, it means having empathy for franchisees. It means practicing attentiveness to franchisees’ questions and issues. It means communicating regularly with franchisees (which remarkably does not occur with many franchisors). It means developing effortless experiences with franchisees in terms of ease of doing business, training, and helping franchisees innovate their businesses. And finally, it means adding value for franchisees so the franchisor has created franchisees for life.
For many franchisors this may require a shift in mindset. A mindset that is not so rigid like your typical franchise agreement along with system rules, but instead that is more of a growth mindset where there is an emphasis on learning what works and does not work. And this mindset may require franchisors to listen much more to franchisees in order to improve in the future. And in the end, it is my strong belief that Franchisors who can take this franchisee-centered approach will set themselves apart to dominate the competition. If you find a franchise-centered franchise, be sure to reach out to me and let me know about it. I’d love to see some great examples.