By Michael Seid, Managing Director, MSA Worldwide
I was struck by this question because the franchisor perceived the relationship he had with his franchisees in the context of a parent and its child. He had been taught the “child myth” and did not comprehend that it was this flawed perception of the relationship that was the underlying cause of his problems.
All of us base our reactions and relationships on our experiences – both those personally weathered and those taught to us by others. These experiences color our perceptions. Recently, the History Channel began a series of programs called “Movies in Time” where historians provide commentary on the actual events portrayed in the movies. The purpose is to unravel legends so that the viewer has a more accurate understanding of historical events. By understanding how events really unfolded and how they are interconnected, we can avoid repeating mistakes and prosper from the experience.
In our struggle to advance the relationship between franchisors and franchisees, it is time to examine some of the myths, for much of what may be wrong in the franchise relationship in some systems may be caused by a belief in these myths.
John F. Kennedy, in a commencement address at Yale University in 1962, said “The great enemy of the truth is very often not the lie – deliberate, contrived and dishonest – but the myth – persistent, persuasive and unrealistic.” One of the most persistent, persuasive and unrealistic myths in franchising is the “child myth.”
I am uncertain where the theorem that a franchisor’s relationship with its franchisees is comparable to that of a parent and their child came from. The often quoted premise is that franchisees join a franchise system with similarities to infants entering the world, then become pubescent adolescents where they begin to challenge their franchisors, finally emerging as mature adults.
It is a simplistic view at best. At worst, it denigrates the majority of franchisees, overstates the role and responsibility of the franchisor, allows the franchisee to look outside themselves for causes of problems, and is at the root of many of the problems between franchisors and franchisees today. The child franchisee is a myth.
Franchisees are not children. For the most part they are intelligent adults, investing in an unfamiliar business opportunity which requires them to learn new skills. Just as with anything new, there is a period of uncertainty, but with practice, experience, luck and a reasonable amount of training and support, they are primarily responsible for their own future.
Increasingly I have become engaged in crisis management and litigation support assignments both as a consultant and as an expert witness. A consistent undercurrent that permeates these situations is the unstated theme of the “child” franchisee and the “parent” franchisor. Franchisees and their advocates use the child myth because it provides them with a convenient cover to blame anyone but themselves when things are not to their liking.
Franchisees often will use a variation of the “child myth” in demanding that they not be held responsible for failing to exercise personal care. They want to be relieved of the same type of due diligence responsibility which adults are normally held to in buying a car, buying a house, or choosing their spouse.
Even faced with adequate disclosure information and the availability of professional advisors to assist them in understanding the franchise agreements, they demand relief because they chose not to act like adults when they entered the relationship. Increasingly they want to turn to a parent – either in the form of the court or the legislators – to make things better.
Franchisors are equally at fault because they have often used the child myth to their advantage. Children are easier to control and mold. But, when problems in the relationship begin, it is not because franchisees are entering adolescence that inflames the situation; it is because they didn’t understand that franchisees should never have been treated as children to begin with.
Franchisees are simply inexperienced adults. Sometimes they are encouraged or allowed to act like children because it makes the sale easier to consummate. Often they are encouraged to be like children because it is easier to manage the relationship.
It is little mystery why some franchise systems have few franchisee relationship problems even when the retailing experience is not perfect. In these systems, franchisees are challenged to do their job from the beginning. While they are supported along the way, it is demanded of them that they do proper due diligence by researching the marketplace, discussing the opportunity with other franchisees, engaging professional advisors to assist them, and clearly understanding the relationship they are about to enter.
They are required to educate themselves on the amount of capital they will need to succeed. They are expected to understand the type of location required and to work long and hard to find the perfect location that meets the system’s requirements.
They are not allowed to be passive to their investment, unless they have the resources required to hire, train, and support management who can operate the business for them. And they are held to the letter and spirit of the system’s quality and consistency standards, or are exited from the system in order to protect the other franchisees who would be damaged if they don’t.
Franchising is not a relationship between parent and children – no matter how long the myth has been quoted. It is a relationship between businesspeople – one who should be experienced and supportive, and one who over time will become experienced. It is as simple as that.