Franchise relations' is the term used to describe the relationship between a franchisor and its franchisees. Typically, positive franchise relations indicate a favorable relationship between a franchisor and its franchisees, while the opposite is true of negative franchise relations.

I have always taken the position that the state of franchise relations within a franchise organization indicates just how successful that particular franchise program is. A thorough understanding of franchise relations is important for prospective as well as existing franchisees.

I've been fortunate to work in a number of franchise organizations where I interacted with countless franchises. Based upon this experience, I've been able to identify those activities which, when properly executed, enable positive franchise relations. Conversely, I've witnessed actions which served to impair the relationship between the parties, resulting in a negative influence on the state of franchise relations.

In order to reach a positive level of franchise relations, certain components must be in place. If these components are not in place, or if they function below acceptable standards, chances are good the franchise network will face constant challenges and fail to achieve its collective goals. The following represents the key elements of a successful franchise relations program. These items should be part of your franchise evaluation process.

Franchisees Achieve Financial Expectations. The foundation of a viable franchise program must be based upon the fact that the majority of franchisees realize their financial goals. If more than 15% to 20% of franchisees do not reach their financial expectations, the implication is that franchisees will probably hold the franchisor accountable.

Some of the issues that may be raised include the following: Franchisees were misled during the purchase of the franchise. The franchisor is not fulfilling its obligations. The franchise concept is flawed.

When franchisees do not reach their goals, they will look to the franchisor for answers and assistance. In many cases they will place responsibility for their shortcomings upon the franchisor.

Program "Compliance" Leads to Positive Results. Franchisees who follow the advice and the requirements of the franchise program are successful. This may seem like a rather naive statement, yet I've encountered franchisees who felt they had to perform adjustments to the operation of their franchise business.

In these instances, the franchisor didn't provide the proper support and/or systems for successfully operating the franchise. On the other hand I've personally observed countless franchisees who attributed their success to following the franchise program.

System Standards Are Upheld. In a franchise system with positive franchise relations, the franchisor enforces and upholds the quality and standards of the franchise system. There is little patience for those franchisees who threaten the reputation and quality of the franchise's products and services.

Traditionally, franchisees support the actions of their franchisor in protecting the brand because of its importance to their business. However, in those franchise systems where standards are not upheld and certain franchisees are allowed to deviate from their obligations it's not uncommon to find franchise relations negatively impacted.

The reason is rather obvious, namely, those franchisees that adhere to the requirements of the franchise program will resent the franchisor for failing to impose those requirements upon all franchisees.

This situation may not be readily apparent but rather will develop over time. This is because some franchises may be located in areas that are distant from the problem franchisees. However, over time the message will get out.

Franchisee Results are Measured on an On-Going Basis. Franchisors with strong franchise relations measure the performance of their franchisees on a regular basis. Using surveys, field reports and other means for data gathering, the successful franchisors are aware of how their franchisees are performing.

If the results indicate sub-par performance in a particular area, then the franchisor will work with its franchisees to address those areas. When investigating franchise opportunities, always ask the franchisors how they evaluate their franchisees and what the results reveal.

Adapt to Market and Competitive Changes. When changes in the marketplace take place, a franchisor should be ready, willing and able to assist its franchisees in adapting to those changing market conditions.

Although such changes can be regional or national in scope, franchisees will always look to their franchisor for direction and support. If this assistance is not forthcoming, it may only be a matter of time before the relationship between the franchisor and its franchisees will be affected.

Franchisors need to obtain ongoing feedback from their franchise network so that they can be aware of important changes in the marketplace.

Have a "Point" Person with Experience and Savvy. The franchisor should have a specific person responsible for managing the franchise relations process in the organization. Although it's the responsibility of the entire management team to promote and foster positive franchise relations, someone needs to lead the charge.

In new franchise companies it can be the president or CEO; in larger organizations it can be the vice president of franchising or some other high-level officer. In all cases, that person should possess certain critical traits and qualities. The two most important of those traits are having gained the trust of the franchisees by action and deeds, and being in a position to obtain feedback from franchisees when needed.

A Successful Dispute Resolution Process. It's important that franchisors have a system in place to resolve any meaningful disputes that may arise between them and their franchisees.

The spirit of the franchise relationship must exist in an environment of mutual trust and respect. However, in some cases disputes and disagreements do arise. The objective for both franchisee and franchisor then becomes preventing the dispute from escalating out of control. Litigation between the parties can be very costly-and not just in terms of money.

In order to avoid damaging disagreements between the parties, the franchisor has to be aware of problems before they get out of control. This requires those who deal with the franchisees on a regular basis to be alert to potential problems and to respond when needed.

In addition to its many other benefits, an active franchise advisory council can serve as a "sounding board" for franchisees where they can air their disputes and receive attention.

Be advised that it's not a necessity that positive franchise relations require a franchise advisory board, but for larger franchisors this would be a preferable tool.

Recognition of Leading Franchisees. Franchise relations programs include activities that recognize franchisees for outstanding achievement. That can be accomplished through newsletters, bulletins, convention programs or honorifics.

Additionally, franchisee news, new location openings and important milestones should all be communicated to the network on a regular basis.

The points discussed in this article should be part of any franchise evaluation process because they represent important attributes of the franchisor.

It's important to know whether the state of franchise relations in a franchise organization is positive or negative. For franchisees and franchisors, this information can serve as a guide for evaluating and improving franchise relations.