BOOK REVIEW | FRANCHISE-CHAT
THE FRANCHISE E-FACTOR by Greg Nathan
The 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
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:
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.
- 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
- We - The franchisee recognises that success and satisfaction
come more easily from working with, rather than against, their
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
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 www.franchiserelationships.com
Reviewed by Dr Callum
Floyd, Editor of Franchise-chat.com