The franchise relationship is an unusual commercial arrangement and most of its difficulties come from that. The franchisee is not your employee — you cannot instruct them the way you would a manager. They are not your customer either, though they pay you. And they are not quite a partner, because the terms are set by you and the system is not theirs to change.

Franchisors who struggle usually struggle because they default to one of those three models. Treat a franchisee as staff and they resent it, having bought a business precisely to stop being an employee. Treat them as a customer and standards collapse, because customers are always right. Treat them as a partner and you find you have no authority when something needs correcting.

The first year sets the pattern for the franchise relationship

Whatever behaviour you accept early becomes the norm. A franchisee who deviates from the system in month three and hears nothing about it has learned that the system is optional. Correcting it in month twenty is far harder, because by then it is established practice and enforcing it looks arbitrary.

This is uncomfortable for new franchisors, who often have a personal relationship with their first franchisees. Those early operators took a risk on an unproven system and there is genuine gratitude involved. Raising a standards issue feels ungracious.

It is still the job. Raising it early, once, in a straightforward way is kinder than letting it run and then having a serious conversation later. Franchisees generally respond well to clarity and badly to inconsistency — being told something matters after months of it apparently not mattering feels like a change of rules.

Communication that is scheduled, not reactive

The most common structural failure is a network where the franchisor only makes contact when something is wrong. Franchisees learn to associate your call with a problem, and they start managing what you see rather than telling you what is happening.

A regular rhythm changes that. Site visits on a schedule rather than when a complaint arrives. A routine check-in that is not tied to an issue. Network-wide communication that includes ordinary news rather than only announcements and demands.

The frequency matters less than the predictability. A franchisee who knows you visit quarterly prepares for it and raises things they have been sitting on. One who never knows when you might appear becomes defensive, which is the opposite of what you need.

Separating the two conversations

Franchisors often merge two different discussions and get poor results from both. The first is support: how is the business going, what is difficult, what do you need. The second is compliance: here is where you are not meeting the standard.

Run together, the support conversation becomes an inspection and franchisees stop being honest in it. Nobody volunteers a problem to someone who is about to write it up.

Keep them distinct. A support visit is genuinely about helping and nothing raised in it is punitive. A compliance review is separate, structured against the operations manual, and documented. Franchisees can handle both. What they cannot handle is not knowing which one is happening.

When a franchisee underperforms

Underperformance has causes and the response depends on which one applies. A franchisee who is working hard and following the system but sitting in a weak location has a different problem from one who has decided the system does not apply to them.

The first needs support — marketing help, operational review, sometimes an honest conversation about whether the site is viable. The second needs the agreement. Applying the wrong one makes things worse: enforcement against someone doing their best is destructive, and support offered to someone who is simply ignoring the system rewards it.

Work out which it is before acting. That usually means a site visit and a genuine conversation rather than a judgement made from the numbers, because the numbers look identical in both cases.

Enforcement, when it is necessary

Most franchisors avoid enforcement for as long as possible and then act abruptly when patience runs out. That sequence produces the worst outcome — a franchisee who has heard nothing formal for two years receiving a breach notice experiences it as an ambush, and it frequently ends in dispute.

The alternative is unglamorous. Raise issues in writing when they arise, even minor ones, in a matter-of-fact tone. Give a clear standard and a reasonable period to meet it. Follow up. Most matters resolve at that stage, and the ones that do not have a documented history behind them.

This depends entirely on your documentation. If the operations manual specifies the standard, breach is demonstrable. If it says only that standards should be high, you have an opinion rather than a case. Our franchise agreement and franchise documentation work is done together for this reason.

The franchisees who are doing well

Attention flows to problems, which means strong franchisees are often the ones a franchisor speaks to least. That is a mistake on two counts.

They are your best source of operational intelligence — they have worked out things you have not, and they will tell you if asked. They are also your most credible reference for prospects, and the people most likely to open a second site. A network’s growth usually comes disproportionately from existing franchisees expanding, and that only happens if the relationship is good enough to make them want more of it.

Handling change

Every network eventually needs to change something — a supplier, a procedure, pricing, the brand identity. Franchisees have invested in the current version and change costs them money and effort, so resistance is rational rather than difficult.

What reduces it is explanation and notice. Franchisees who understand why a change is happening, and who have had time to plan for it, generally comply. Those who receive a directive with a short deadline and no reasoning comply badly or not at all.

Where possible, test a change at one or two sites first and share the results. Evidence from within the network carries far more weight than assertion from the centre.

What holds it together

The functional franchise relationships are the ones where both sides understand the arrangement: the franchisor sets and protects the system, the franchisee runs their business within it, and both are better off than they would be alone. That works when it is stated plainly at the start and applied consistently afterwards.

Consistency does most of the work. Franchisees will accept firm standards applied evenly. They will not accept standards that appear and disappear depending on who is asking and how busy you are.

Getting this right starts before the first franchisee signs, in how the system is documented and how the agreement is drafted. If you are at that stage, the free Franchise Readiness Assessment is where to begin.

For the industry’s own standards, see the FASA Code of Ethics and FASA’s guidance on franchise agreements.