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by Greg Nathan

Whether we like it or not most businesses are operating in an environment of fear and uncertainly and this is likely to continue for some time. Fear and uncertainly rob people of their initiative and confidence. This applies to both customers and businesses and it is as much a psychological problem as it is an economic one!

Smart franchisors understand that in addition to granting new franchises, they must provide strong, credible leadership to their existing franchisees. This means maintaining high levels of confidence and hope within their networks and getting their franchisees to willingly deliver on the promise of the brand.

There are good commercial reasons why this is essential, especially in the current environment.

Imagine the competitive edge a franchise network would have in the current market if a franchisor and its franchisees all pulled together with confidence and hope, sharing ideas and fully supporting each other.

And while franchisees with high levels of confidence and initiative are more likely to promote their businesses in their local markets and motivate their teams to deliver exceptional service, the opposite is also true. Franchisees that lose confidence and hope are more likely to fall into a psychological hole of hopelessness where they start to take on a victim mentality. This is bad for them and bad for the brand.

Perhaps unfairly, franchisees who are not achieving are also likely to blame their franchisor. It is thus in a franchisor’s best interests to focus on providing the right type of support to franchisees at this time.

Here are three things that franchisors can do to promote a greater culture of confidence in their franchise networks.

Show responsible, forward thinking leadership
It is a known fact that the attitudes and behaviours of leaders have an immediate and powerful impact on the performance and attitudes of the people they serve.

Franchisor executives at all levels need to show a high level of maturity and discipline in their comments and behaviour. If they want the loyalty of their franchisees they need to set an example of care, competence and integrity.

Discussions with franchisees should be constructive and solution focused at all times. Focus on what you want to see and why. People often respond according to how they are treated so treat franchisees as fellow business people who want to succeed.

Nature abhors a vacuum. In cases where a franchisor fails to keep their franchisees informed on their strategies for addressing market pressures, franchisees will start to draw their own conclusions – perhaps that the franchisor doesn’t care or doesn’t know what it is doing.

Regular phone and face to face communication is vital. Regional meetings and webinars are particularly useful initiatives at this time as they are cost effective and enable people to stay connected to what is happening.

Also remind your franchisees that in this environment everyone’s energy needs to be focused on business improvement, not on complaining, blaming or internal fighting.

The leader’s role is to build hope and confidence for the future not to get drawn into arguments over who is right or wrong. Work with franchisees to identify what is working and why, and build on this.

It is usually obvious what is not working. Acknowledge this and do something about it immediately. This will also build confidence and hope as it shows a commitment to positive action, not just talk.

In summary keep franchisees informed and keep discussions focused on what is working and who can do what to improve things.

Promote an optimistic mindset
It is a scientific fact that an optimistic mindset promotes better performance. For instance in a recent study we conducted with 802 franchisees, we found that those with a more optimistic attitude were significantly more successful on several performance measures including sales and profitability.

It is hard to encourage optimism in others if you don’t feel it yourself so franchisor executives need to practice optimism in themselves. Here are some tips:

  • At the end of each day ask yourself “What are four things that went well today and why?”
  • Practice an attitude of gratitude. Focus on the things people have done for you and thank them.
  • Spend some time each day doing something you enjoy and that gives to energy.
  • If you find yourself feeling down or grumpy it is usually because you are exaggerating the negatives. Psychologists call this “catastrophizing”. Look at the facts and get things back into proportion. Remind yourself that all things pass.

Here are some tips for promoting optimism in franchisees:

  • Open discussions by asking what has gone well today.
  • Tell them about the things they are doing well.
  • When delivering feedback remind them that this is to improve their profitability and performance.
  • Don’t talk with them about larger business problems that are not directly relevant to them or that they can’t do anything about.
  • Talk positively about other franchisees and the company in general.
  • If they seem despondent encourage them to discuss their fears or concerns and then help them to put these into context. Use facts to challenge them if they are catastrophizing or are holding onto unrealistic or exaggerated assumptions.
  • Be reliable with your commitments so they know they can count on you.

Optimism is not a denial of the facts. On the contrary it is usually seeing the facts in a more realistic context. For instance, unpleasant things happen to everyone from time to time, but they also pass; a failed initiative does not mean a failed life; and there are always opportunities to make things better if we are prepared to put aside our fear and take action.

Encourage social support networks
In our research into franchisee performance we have found that Family and Social Support is three times stronger a predictor of performance than any other variable. Family and Social Support is the emotional support provided by friends and family.

In other words it matters a lot whether a franchisee feels they have people in their lives that care about them. This also means that franchisees benefit from having the opportunity to talk about their challenges with people who have an interest in their success.

These findings are consistent with psychological research that shows that positive relationships have a huge impact on life success and satisfaction.

It is also consistent with our observations that franchisee peer support groups have a positive impact on franchisee confidence and initiative. Peer support groups can take various formats. Here are three examples.

  • Small group discussions at conferences and area meetings. We regularly facilitate these types of sessions and franchisors are amazed at the number of ideas that franchisees come up with. Furthermore discussing these topics with their peers in itself boosts franchisee confidence and commitment to try initiatives that will improve their business.
  • Franchisee peer coaching. Sometimes franchisees pair up and agree to check-in with each other at agreed intervals, usually once a week. In these check-in sessions they talk about what’s going well and where they are blocked. Discussions like this are very effective at mobilising the brain to take action, instead of just brooding.
  • Franchisee performance groups. These are formal discussions, usually held monthly, where around six franchisees share and discuss their financial performance and business plans. While discussions are based around numbers, many franchisees report the major benefit of these groups is the camaraderie and support they experience. They say this motivates them to initiate positive actions they would not normally take if they were working in isolation.

Greg Nathan is Managing Director of the Franchise Relationships Institute. He is a psychologist, a respected international franchise educator and researcher, and author of several popular franchising books including Profitable Partnerships.

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Greg Nathan is the Founder and Chairman of The Franchise Relationships Institute. For more information on the Institute's research and publications go to

Phone: +61 7 3510 9000
Fax: +61 7 3870 2111


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