Your Franchiser Is Not Your Dad!

The relationship between franchiser and franchisee is often denominated as a parent and child relationship - but is that true?

The Practical Discovery

Franchising is a contractual setting that is governed by a mutual franchise agreement. The franchisee pays the franchise cost to amiably use the brand name, operating system and products of the franchiser company on agreed terms and conditions. Both franchisee and franchiser are bound to fulfill their responsibilities as per the contract. In a parent child relationship there is no legal contract and moreover there are no obligations. Subsequent pointers would make the relationship between franchiser and franchisee clearer:

Guidance and Support

A franchiser provides adequate guidance on how to operate the business and the franchiser certainly helps a franchisee grow their business. In all practicality, franchisers also set rules and regulations to be earnestly followed by the franchisees just like a parent, but franchisee most definitely are not children. They are capable to make decisions of buying the suitable franchise and have willingly agreed to abide by the franchiser’s set of rules. They bear sole responsibility of their business activities, their profit and loss.

By Choice

Unlike, parent child relationships, a franchiser can opt to select between many businesses for sale. They also get sufficient opportunity to inquire about the legal and accounting reviews of the franchiser before investing in the business. If a particular franchise opportunity is found to be incongruous, the franchisee may look upon other available options. Even after buying the franchise, if the franchisee feels that the business is not right, some agreements may allow them to sell off the business.

Independence

Franchisers can only provide the required guidance, support, and operating system but how well the systems are being followed is the outlook of the franchisee who is an independent business owner. Franchisers have nothing to do with your employees or how much you pay your employees, such vital business decisions are prerogative to franchisee. If you fail in your business, a franchiser would not share the responsibility, unlike parents who protect their child from every mistake and support them during failure.

Thus, a franchiser is definitely not your dad. You are an independent business person. The relationship between you and your franchiser is purely contractual. You do own responsibility of the right and wrong business decisions, profits and losses. Right from day one, you need to understand and maintain an affirmative yet very attentive relationship with your franchiser to put both in idyllic condition of mutual agreement!