The six stages of franchise relationships

Newsletter Ask The Experts

Greg Nathan is the Founder and Chairman of  The Franchise Relationships Institute and has defined six distinctive stages of franchise relationships.

If you have a commitment to your business and are prepared to work through the ups and downs of life as a franchisee you will travel through six distinct stages. Some people move through these stages swiftly and more or less painlessly. For others the path is frustrating and full of interpersonal strain and resentment. Some people even get bogged down half way through and decide that franchising is not for them.

Stage 1. The Glee Stage

“I am very happy with the relationship I have with my franchisor. They obviously care about my success and have delivered all they said. I am excited about my new business and full of hope for the future.”

Positive emotions run high at this stage. There is a great sense of achievement for everyone as the numerous hurdles in establishing the business have now been cleared.

Stage 2. The Fee Stage

“Although I’m making money, these royalty payments are really taking the cream off the top. What am I getting for my money?”

At this stage the franchisee’s level of satisfaction starts to drop.

Stage 3. The Me Stage

“Yes I am successful. But my success is a result of my hard work. I could probably be just as successful without my franchisor.”

When we perform well or achieve something we tend to attribute this to our inherent skills and personality. We take the credit. But when we make mistakes or don’t perform up to expectations we tend to blame someone else or outside circumstances.

Stage 4. The Free Stage

“I really don’t like all these restrictions my franchisor is putting on the way I run my business. I feel frustrated and annoyed at their constant interference. I want to be able to do my own thing and express my own ideas.”

While the franchise relationship tends to begin with the franchisee relatively dependent on the franchisor this does not last. As a franchisee’s business confidence grows, their drive towards independence will increasingly assert itself. A franchisee at this stage might feel resentful having to follow the franchisor’s standard operating procedures all the time.

Stage 5. The See Stage

“I guess I can see the importance of following the franchise system. And I do acknowledge the value of my franchisor’s support services. I can see that if we all did our own thing standards would drop and we would lose the very things that give us our competitive edge.”

Conflict in relationships seldom goes away by ignoring it. For the franchisee to move to the See stage there needs to be some frank and open discussions, where franchisee and franchisor listen carefully to each other’s point of view. There may be some blood letting as previous disputes or disagreements are reopened. Mistakes and misunderstanding will no doubt have occurred on both sides of the relationship. There needs to be an acceptance and letting go of the past by both parties.

Stage 6. The We Stage

“We need to work together to make the most of our business relationship. I need some specific assistance in certain areas to develop my business but I also have some ideas that I want my franchisor to consider.”

From the See stage there is a natural progression to the We stage – a move from independent to interdependent thinking. At this point the franchisee is prepared to put his or her ego aside and recognises that success and satisfaction generally come more easily from working with, rather than against, their franchisor.

Franchisees who have negotiated their way through the franchise relationship minefield to the We stage are a franchise network’s greatest asset. They will often be quiet achievers who keep one eye on their profit and one eye on cultivating healthy business relationships, not just with their franchisor but with their suppliers, peers and, of course, their customers.

Source: Franchise Chat –

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