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In Franchising: Trust is a Two-Way Street
Posted by Ed Teixeira

If one were to evaluate the top franchise programs over the years there is no doubt that these programs were and are built on a foundation of trust. The relationship between the franchisor and its franchisees were represented by trust on both sides. It really isn't that complicated, especially when one considers how trust is an integral component of franchising.

Here is how the trust factor should work:

The Franchisee should be able to trust:

  • That the representations and committments made by the franchisor are truthful and will be fulfilled.
  • That they can earn a fair return on their investment without extraordinary performance.
  • That there is balance between the interests of the franchisor and its franchisees. A selfish franchisor ultimately fails.

The Franchisor should be able to trust:

  • That a franchisee understands what it takes to succeed in terms of qualifications and competency.
  • That a franchisee will put forth their best efforts to succeed.
  • That their franchisees have performed comprehensive due diligence so that their desire to join the franchise network is well founded

These items may seem overly simplistic, yet if we really think about it these are the areas where trust between a franchisor and its franchisees can break down and lead to unfilled expectations and in some cases litigation.


Posted on December 16, 2011 at 3:47 PM
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