The Culture of Franchising
Updated: Feb 15, 2020
A lot of people come to franchising, thinking it’s exactly the same as “entrepreneurism” – meaning, they buy a business, and have the freedom to run that business as they choose.
While franchising offers its owners a great deal of personal freedom, to say they have “total freedom” would be incorrect. Because franchising is ultimately “a collection of many owners,” it is a society, or “culture” in to itself, and, like any other society, there are rules that must be followed.
Why must there be “a culture with rules” you say? First and foremost, the “rules” are there to protect owners, not restrict them. Let’s take the obvious example – a restaurant. If another owner, adjacent to your restaurant, didn’t keep a clean kitchen, wouldn’t you want your franchise company to have the power to do something about it? Of course you would – because you want to be able to protect your investment. A less obvious example of a “rule” that most franchises employ is their requirement that all sales be recorded through the franchise company’s software – so that royalties can be properly measured. If corporate isn’t “healthy” because they are not receiving accurate revenues, it will eventually harm the owners as well – so again, this rule is for protection of all concerned.
The document that houses these “rules” is the FDD (Federal Disclosure Document) – which clearly spells out for all potential owners what they can or cannot do if they owned a system within a particular franchise. This may contain rules ranging from supplier restrictions to operator dress codes to signage, and so on. It will differ for every franchise what those exact “rules” are.
So, in other words, it’s fair to say that a franchisor’s overall culture is “to maintain conformity” among their owners. They have a lot invested in their brand, and any time a particular location strays from what that brand is supposed to look like, or feel like, they are risking their brand, and their owners’ investments. So they just aren’t very flexible on this point.
Many “new Americans” find this concept a bit unusual or difficult to understand. Coming from other countries and business cultures, they assume they can carry their individual cultures into a franchise in North America for themselves. It’s important to know, when first investigating a franchise, that this will likely not be accepted by that franchise. Any franchise expects their owners – regardless of ethnic or experience backgrounds – to “follow the system rules” – which is their way of saying, follow the “culture of franchising.” If a potential buyer does not want to do this, then they probably don’t belong in franchising – they are a bit too independent for this type of business.
Within this broad culture of franchising, each company probably has its own subculture as well. One may very much like an adoptive family, where all owners work together to support each other’s success. Another may be very fast and edgy, demanding results. Another may be “all business” – reflecting a traditional, formal culture.
Whatever the culture, it’s important that potential owners investigate this when they are doing validation with other owners. They should be prepared to ask these owners such questions as:
1. What is it like to work within this franchise? Could you provide me with examples?
2. Would you describe the culture as warm and family-like, formal and business-like, or some other way?
This feedback, like all other validation learning, needs to be taken into account in making a decision as to a personal “fit” with a particular company. You’ll find, in time, that adapting to the culture of a franchise is no different than moving to a new city or joining a new group. Would you move to a city or new job, or join a group and immediately start telling them how to run things? Would you agree that the “power of many” can be worth more than the “power of one?” If you can answer “yes” to both of these questions, you should be comfortable working within the culture of franchising.
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