Franchising is often regarded by the franchise community as a “commercial marriage” – the union of franchisor and franchisee bound in matrimony to each other and their franchise brand.
This is a great analogy and explains many elements of the franchise relationship. For example, there is the courtship period when a potential franchisee considers suitors (franchisors) for their investment dollar.
Eventually there is an engagement, which is when the franchisee provides their detailed application in return for the franchisor’s disclosure document and franchise agreement.
During this engagement period, the franchisee gets to learn more about their future marital partner, and sometime after the mandatory 14-day engagement period has lapsed, they may choose to go ahead with the marriage and sign the final documents.
Thus – and in very simple terms – a franchise marriage is made.
So if there are similarities between franchising and marriage, what can one learn from the other?
Of the two institutions, franchising has no doubt been the greater beneficiary of this learning exchange. Most people have some knowledge or experience of marriage, either at firsthand or by observing friends and relatives, and can use this frame of reference to help improve their understanding of franchising.
But what about the other way around? What can marriage learn from franchising?
Here’s a few things to consider:
Love doesn’t always lead to happiness
Falling in love sets such high expectations for the future of a relationship that often one or both partners end up disappointed. Going into a franchise means constantly reality-checking that initial rush of illogical attraction, and backing it up with a plan to make a long-term financial success of it. That long-term view brings happiness when the rewards of a well-considered and well-executed plan come to fruition, rather than the haphazard approach of starry-eyed romance.
A more formal process of mutual assessment
With the massive volume of information on the internet, even couples dating for the first time will probably Google each other, or check out their respective Facebook pages or Twitter accounts as part of the process of getting to know one another.
Once the awkward first date is behind them, they will probably learn about each other from each other, rather than external sources. This isn’t good enough in franchising.
Potential franchisees need to talk to other current and former franchises to improve their understanding of the franchise business, and the franchisor’s ability to support and foster their franchisees. This is the romantic equivalent of talking to your fiance’s ex-girlfriends or ex-boyfriends to find out what they’re really like.
Mandatory prior-disclosure before commitment
It may not occur to many starry-eyed couples to ask one another if they have ever been to jail, or been sued, or are currently subject to any investigation or litigation. When he/she seems like such a nice person, blunt questions of this nature are sure to offend.
Not so in franchising, where franchisors are required by law under the Franchising Code of Conduct to provide around 250 or more specific types of information about themselves according to the pro-forma template in the Code.
This mandatory disclosure is unlike anything in real-life marriage. How many brides or grooms have later learned something about their spouse that may have changed their mind about the wedding if only they knew beforehand?
Franchisors also expect a high-level of disclosure from their potential franchisee spouses, and usually require them to complete a detailed and formal application process to filter out unsuitable candidates. Imagine how useful such an application would be when interviewing potential spouses!
There is a mandatory cooling-off period
Franchising has it all over marriage in this regard. Found out something about your spouse straight after the wedding that would otherwise be a dealbreaker? Too bad you don’t have the seven-day cooling-off period that franchisees have. If, after signing on the dotted line, they change their mind within seven days, they can exit the relationship without undue cost and hassle.
The seven-day mandatory cooling-off period would be a great solution to all those “woke up drunk and married to a stranger in Las Vegas” (or similar location) clichés that sometimes occur in real life.
You make a plan for your future
Imagine being asked by your future spouse to prepare a plan for the next five or so years that clearly identifies your objectives, and what you will do to achieve them. Beyond getting hitched, with the expectation that a house and children may eventually follow, most couples don’t put a lot of thought into their plan after marriage. Franchising is different, and generally requires potential franchisees to provide a detailed plan for their future, and then work to the plan.
There’s a time limit
Somewhere in the marriage ceremony, there’s the line “till death us do part”. This isn’t a requirement of franchise marriages, where the participants instead sign up for an initial term (which is an average of five years), and if they still like each other at the end of that term, sign up for another.
Polygamy is OK
Franchises and franchisors don’t necessarily sign-up for exclusive relationships. Franchisors will have many franchisee “spouses” and franchisees often acquire additional outlets from their franchisors (and sometimes even outlets from other franchisors altogether).
Try having that kind of diversity in a real life marriage and see how long your relationship lasts.
Spending is audited
In franchising, money paid into a marketing fund is required to be audited, unless more than three quarters of franchisees agree that an audit is not required. Would wives or husbands be so keen to have an equal level of transparency on their spending in a real marriage?
A dispute resolution process
If there is a problem in a franchise relationship that can’t be resolved by direct negotiation, there is a dispute resolution process that either party can initiate. This process can ultimately lead to mediation, where both parties come together with an independent mediator.
The mediator helps the parties clarify their issues and desired outcomes, and find common ground to build a mutually satisfactory outcome. With more than 80% of franchise disputes that go to mediation resulting in an agreed outcome, real life marriage could benefit greatly from this process if it became a standard method of settling arguments.
If marriage was more like franchising, spouses would be better-informed beforehand, have the ability to change their mind within seven days of getting hitched, be more focused on getting the most out of the relationship in the time available, and be able to resolve their disputes by mediation without anyone throwing crockery at each other.
Although these concepts might be somewhat alien to marriage in real life, they work well in franchising.
Jason Gehrke is the director of the Franchise Advisory Centre and has been involved in franchising for 20 years at franchisee, franchisor and advisor level.
He advises both potential and existing franchisors and franchisees, and conducts franchise education programs throughout Australia, and publishes Franchise News & Events, a fortnightly email news bulletin on franchising issues and trends.