Franchise Development – How to Evaluate Strategic Partnerships
Franchise development is all about partnerships.
The most effective and efficient franchise systems I have ever worked with were fantastic at managing relationships, expectations, and keeping things kosher with large networks. This is a skill, one that very few people have the ability to manage really well, those who do are often extremely successful in business and in life.
The core of franchising is the formation of small individual companies. The partnership is defined by the franchisor/franchisee relationship and really the franchisor makes all the decisions from a legal standpoint, but the good guys will work WITH the franchisees, not dictate based on the structure of the agreement.
As franchise organizations grow and brands develop, franchise businesses attract a large number of potential strategic partners. A strategic partner is an external organization that aligns with a company to benefit both parties involved. This could be a marketing company that discounts work or provides free brand work to a franchise system in exchange for an exclusive relationship with all franchisees within the system. Or a commercial real estate company that offers discounted leases based on a preferred referral from a franchise system.
The possibilities for strategic franchise partners are literally endless. Good franchisors and successful franchise model leaders will take some careful steps before choosing and selecting organizations to do business with as strategic partners.
1. Do some research – This includes more than just a Google search, check the company’s track record and successes against the results. flaws You don’t want to discover skeletons in anyone’s closet after you’re married.
2. Check their work: Check a reference from the organization to make sure they are who they say they are. This will also help you determine its trustworthiness.
3. Validate that the strategic partner will add value to your organization and that you will add value to theirs. One-sided partnerships do not usually work well.
4. Beware of exclusivity: Make sure you don’t miss out on opportunities that come your way by signing exclusive deals; in some cases these are guaranteed, in others they are not.
5. Market Your Strategic Partnership – Let everyone know, partnerships that are set up right are tremendous value-adds for franchisees, customers, and anyone else considering doing business with your organization.