Available at Franchise RelationshipsThe franchise relationship is one of the most important, but least written about, aspects of franchising. Franchisor guides often focus on a) whether a business is franchise-able, b) developing operations manuals, c) the franchise contract, d) marketing materials, and e) the franchise recruitment plan. But scant attention is paid to establishing an infrastructure to support unit growth. And invariably, the important franchise relationship is left completely ignored. Greg Nathan's 'The Franchise E-Factor,' helps fill this important gap.

Greg Nathan is uniquely qualified to discuss the franchise relationship, having experiences from all sides of the fence. Greg was a successful multi-unit franchisee for a leading bakery group before then gaining experience as that company's National Marketing and Operations Manager. He is also a qualified and respected corporate psychologist.

The relationship between franchisor and franchisee is crucial. It is an interdependent relationship that requires both parties to co-operate. Neither party can achieve their objectives if the other doesn't perform: franchisors rely on franchisees, and visa versa.

Maintaining a harmonious franchisor-franchisee relationship has been shown to be a major determinant of success, though it is also one of the most difficult and frustrating challenges in franchising. Difficulties arise in a number of areas, not least over franchisee demands for greater autonomy, the franchise agreement, provision of marketing support, quality monitoring, location decisions and ownership redirection (that is, franchisors converting franchises back to company-owned operations).

The Franchise E-Factor is a franchisor guide to understanding, acting and coping with the challenging franchise relationship. The book is divided into eight chapters. The first chapter focuses on understanding the mechanics behind franchisee behaviour. It includes an enlightening description of the impact of accountability on performance in psychology, and how this relates to franchising. The chapter then concludes by introducing the six-stage Franchise E-Factor model.

The Franchise E-Factor model describes how the franchisor-franchisee relationship changes during the course of time. The six stages reflect six states in the relationship that occur during the relationship, and include Glee, Fee, Me, Free, See and We. Taken directly from the book, the six stages in the Franchise E-Factor are:
  • Glee - The franchisee is somewhat nervous about their new venture but is also excited and optimistic about the future.

  • Fee - The franchisee starts to become sensitive and concerned about the value of the fees being paid to their franchisor or the costs of services or products received.

  • Me - The franchisee concludes that their success is due mainly to their own effort and 0plays down the contribution of the franchise system, or if they are struggling the play down their own deficiencies.

  • Free - This stage is characterised by the franchisee's need to demonstrate his or her competence and assert their independence, thus testing the franchise system's boundaries.

  • See - Through frank and open discussions the franchisee and franchisor better understand and respect each other's points of view.

  • We - The franchisee recognises that success and satisfaction come more easily from working with, rather than against, their franchisor.
Following the introduction of the model in Chapter One, the second chapter provides a short, but enlightening explanation of how the Franchise E-Factor model was developed. Greg talks about his own experiences and those within the wider franchise community. He also draws from psychology again, introducing the concepts of 'self-serving bias' and 'law of perception' and how they relate to the franchise relationship. These concepts provide an important foundation for the Franchise E-Factor model.

The real meat in the book is provided in Chapters three through eight. These contain the franchisors guide to dealing with each stage of the relationship. All chapters begin with an explanation of the stage and includes numerous real-life examples. The chapters then conclude with specific franchisor strategies for handling franchisees during each specific stage.

Franchisors will undoubtedly find Chapters Four (Managing the Fee Stage) and Five (Managing the Me Stage) particularly interesting, given these are likely to be the most challenging stages of any franchisor-franchisee partnership.

I believe prospective and existing franchisors, and franchising consultants, will find the Franchise E-Factor an incredibly valuable resource. At 93 pages, it is not a large book. But it is succinct. Greg wastes no time getting to the point. And this is important given its projected audience of busy franchise managers.

This book is available for purchase through

Reviewed by Dr Callum Floyd, Editor of

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