The Healthy Psychology of Franchise Relationships

Franchising World Magazine recently wrote a piece on the healthy psychology of franchise relationships. The author Greg Nathan focused specifically on the how franchisees and franchisors feel about being legally and commercially connected, It incorporates trust, commitment and the informal expectations people have of each other. We would call this the psychological contract. Nathan expresses that this psychological aspect of the franchise relationship can be a potent source of competitive advantage by those who recognize its power, as well as a source of misery for those who deliberately or inadvertently ignore it.Nathan says that in order to achieve a healthy franchise relationship, there must be high levels of franchisee advocacy, commitment and engagement.The team of psychologists at the Franchise Relationships Institute has been studying the factors that drive advocacy, commitment and engagement for more than 20 years. Nathans article includes the entire seven principles (which we encourage you to check out here), but we have chosen three of our favorites:

1. Leadership messages should be focused on promoting optimism. The franchisor has an important role to provide franchisees with a sense of confidence in the future. Optimism drives positive attitudes, and in return, positive behaviors. Despite businesses facing significant marketplace or commercial challenges, many have managed to maintain healthy franchise relations because franchisees have confidence that their franchisor is taking them to a better place.
2. The way in which changes are introduced is extremely important. A poorly managed introduction of new initiatives is said to be a common source of franchisee dissatisfaction. The loss that comes with change, financially, or with identity, status, certainty, convenience or relationships. Communication is key during these times of change, and will impact franchisee commitment to change.
3. It is important to encourage connection and pride. A sense of belonging is a string that extends through seven of the principles that the Franchise Relationships Institute offers not surprising given that the simple need to belong is a powerful human instinct. Having a sense of connection to the brand and culture, networking with other franchisees, and interacting with customers and staff is powerful for the business. The way group meetings and conferences are structured is important as they should maximize small group interaction, allowing people to get to know one another.