Creating Effective Franchising Relationships: Challenges of Managing Mature Franchisees

This case study demonstrates how a franchisor tailors the franchising service to maximise the effectiveness of the franchising relationship. The research uses an ethnographic approach to examine the relationship between a franchisor and several mature franchisees in a service industry franchise. It is well known that franchisees progress through various phases during the relationship. In this study, we focus on how and why mature franchisees differ in their attitudes and performance from immature franchisees, and we examine how the franchisor manages franchisees to maximise their potential. This study has developed a framework that describes the challenges and solutions for managing mature franchisees. The research reveals that franchisors need to keep experienced franchisees motivated and challenged if they are to remain dynamic operators within the system. On top of that, franchisors must remember the importance of transparency, and ensure the right recruitment of area managers whom the franchisees could trust and communicate with effectively. Additionally, there is a need to recognise that each franchisee is unique and must be managed individually, which involves recognising the stage of development through which the franchisee is progressing.