Franchise companies need their franchisees to be empowered, engaged and supportive. Unless the franchise company actively, constantly, and effectively involves its franchisees in decision making, it runs the risk of franchisees becoming isolated and unhappy.

Engaging franchisees in the process of keeping your company’s business fresh and vibrant means building a Culture of Empowerment. This requires constant two-way communication. The old joke about the employee who says, “They sent us our brains from corporate” has more than a kernel of wisdom to it. Franchise companies necessarily have to insist that franchisees follow their systems closely. Franchisees don’t, however, have to feel that things are being forced down their throats. Building a Culture of Empowerment among your franchisees can strike a balance between these two needs.

Listen to Your Franchisees
This process requires that the franchisor be willing to listen and to try new things suggested by franchisees. The unique nature of the legal relationship between a franchisor and its dealers, though, introduces certain risks into this process. Franchisors have to engage their franchisees but keep it clear that the ultimate authority rests with the franchisor.

At Kern & Hillman, LLC, we help clients develop and implement programs that build a culture of empowerment.

Why involve a lawyer in these internal relationships?

The reason is that the tools for empowering franchisees are decidedly legal in nature.
A new product development taskforce is an example of an effective tool for empowering franchisees. It must be established with legal issues and risk management in mind. A clearly defined policy, for example, that assures that the franchisor will own intellectual property rights to any new development is critical. A clear agreement concerning confidentiality and exclusive rights to new developments should also be implemented.

When franchisees are asked to participate in the vendor qualification process, antitrust considerations arise. Allowing franchisee input does not violate trade regulation laws, but the nature of their participation and its impact on prices needs to be handled with care.

Building a culture of empowered franchisees is supposed to avoid and solve problems. Don’t let the process create new ones. Contact us to empower your franchisees.

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