Greg Nathan Franchise Relations Tips #35: Don't Be Fooled By What Makes Franchisees Tick

This week Greg offers some insights into what really motivates your franchisees.

Don”t Be Fooled By What Makes Franchisees Tick

A senior operations executive, relatively new to franchising, strode onto the stage at the annual franchisee conference. He had spent months developing a benchmarking tool that would enable franchisees to compare their financial performance against their peers. And he was convinced they would lap it up.

But, he was about to miss something important.

“Obviously,” he opened, “No one runs a business because they enjoy it!” While he expected a laugh, he instead received blank, silent stares. He continued, “The only reason we are all here is to make money, right?” Again, no response. So he pushed on with his presentation.

I was watching the franchisees from the sidelines and was pretty sure I knew the reason for the disconnect. His statement was not entirely true, and saying it with such certainty had undermined his credibility.

What really motivates franchisees

The thing is, workplace research has found that self-employed people are generally more satisfied than corporate employees, despite facing higher financial pressure and working longer hours. For example, data emerging from our current Franchise Success Study is showing 85 percent of franchisees find running their business enjoyable and satisfying.

Don”t be fooled into thinking this “franchise happiness factor” is because they are making more money. There is no evidence to support this. Indeed, many employed executives work less and earn more than a typical franchisee! Of course franchisees want to make money, but most are also strongly motivated by one of the following four factors. If you want to tune into your franchisees and get support for new initiatives, take note.

  • A desire for independence and flexibility. Many franchisees are seeking to escape the politics, rigidity and frustration of working for others. Indeed, nearly half of the 1,500 franchisees who have so far responded in our Franchise Success Study say they bought their franchise primarily to have more flexibility in their life.
  • To seek a personal challenge. Many franchisees are also highly motivated by achieving results directly linked to their own creativity and hard work.
  • To make a difference. Franchisees often treat their staff as extended members of their own family and take pride in helping them grow personally and professionally. They also get great satisfaction in helping customers and in making a contribution to their local communities.
  • To earn the respect of friends, family and

    peers. Never underestimate the importance of status, pride and position. Respect is something we all crave. Treat a franchisee with disrespect and you may well pay the price.

How to earn people”s trust

Now back to our story. How did the franchisees take to this new benchmarking initiative? It bombed. Barely any franchisees signed up. While there were some past issues that had undermined franchisee trust, this franchisor executive”s lack of understanding of what motivated his franchisees would not have helped.

If you want people to willingly open their businesses and share their financial details, you have to earn their trust. And we are most likely to trust people who understand us. To summarise, it”s not just about the money.

Until next time.

Greg Nathan
Franchise Relationships Institute

P.S.  I”ll be a guest next week on a Special Edition of Franchise Today on BlogTalk Radio. Join us on August 23 and August 24 at 12:00 CT for a lively discussion with Paul Segreto on how to create healthy franchise relations in any system. We hope you”ll tune in – these  sessions will give you a great sense of what you”ll learn at our upcoming Profitable Partnerships Boot Camps September 23 & 24 – Dallas and October 4 & 5 in Denver. Hope to see you there.

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