Managing The Network & Handling Franchisee Issues

From time to time running a franchise network is not always plain sailing and issues can arise when working with franchisees. These are just some of the problems in managing the network and some advice on handling franchisee issues:

Lack of control

Franchisees may deviate from the established system and make changes without consulting with the franchisor, which can dilute the brand and harm the reputation.

Quality control

Franchisees may not follow the standards or may cut corners, which can lead to customer complaints and negative reviews.

Legal issues

Franchisees may violate their agreements or engage in illegal activities, which can result in costly legal actions.

Financial issues

Franchisees may struggle to generate enough revenue to cover their expenses and pay the management service fee to the franchisor, which can lead to financial difficulties and even bankruptcy. This can also lead to disputes over financial reporting and MSF payments.

Communication issues

Communication breakdowns can occur, leading to misunderstandings and conflicts between franchisees and franchisors.

If some of these issues sound familiar to you, get in touch with us to learn more about how we can help you to handle your franchisee issues and improve your network.

Steps to take for improvement:

Communicate effectively

Maintaining clear and open lines of communication with franchisees is essential for addressing issues as they arise. Communication can take many forms.

Provide training and support

Franchisors should offer tailored ongoing training and support to their franchisees. Established franchisees are not always receptive to new ideas and change, yet they often manage the best-established locations which are an important part of network activity.

Establish clear standards and guidelines

Franchisors should clearly outline the standards and guidelines that franchisees are expected to follow. This can include everything from operational procedures to marketing and branding guidelines. It is important to actively monitor this regularly.

Enforce franchise agreements

Franchisors should ensure that franchisees are complying with their franchise agreements and take appropriate action if they are not. It is always best to address issues before confrontation is the only solution.

Offer assistance

Franchisors should be willing to identify issues early and offer assistance to franchisees who are struggling, such as providing additional training or marketing support. This can help prevent financial issues from becoming more severe.

Seek professional advice

As experienced franchise consultants we are well equipped to advise on absolutely any problems with managing the network and handling franchisee issues, and actively take part in their resolution  – get in touch to find out more. For resolutions we work in conjunction with our partners Ashtons Legal.

By taking a proactive approach to addressing franchisee issues, franchisors can help to ensure the long-term success of their franchise network and also provide a happy, harmonious and profitable business for their franchisees.


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