By Richard Gibson
Too often franchisee-franchiser relations resemble a bad marriage. Neither party has
much affection for the other but believes he or she is locked into a partnership of financial necessity.
Although it takes both sides to make a franchise business work, the concept's nature places most of the power and decision-making with the franchiser, not the small-business owners who, as franchisees, are a brand's public face.
"Most franchising, sadly, is 'Here's a one-sided contract, and if you want to participate in our brand, you've got to submit to indentured service to our company,'" says Robert Purvin, chairman of the American Association of Franchisees and Dealers.
But at least one company, motel operator U.S. Franchise Systems Inc., shows that a happy -- and fruitful -- union is possible. The affiliate of Global Hyatt Corp. is known for a corporate culture of collaboration, rather than confrontation, between franchiser and franchisees.
U.S. Franchise, the franchiser of the Microtel and Hawthorn Suites chains, was recently recognized as "America's most respected franchise system" by the franchisees and dealers association, which says the firm looks to its franchisee network "to empower the success of the company."
Roy Flora, the Atlanta-based company's chief operating officer, says he heard early in his career about the importance of a sharing relationship with franchisees.
To that end, franchisees can take their needs, and complaints, directly to people in the organization whose job it is to respond promptly. Mr. Flora worries, however, that as the company grows, keeping those channels flowing freely is a challenge. Each of the company's two brands also has a franchisee advisory committee, where as many as a dozen franchisees meet regularly to discuss goals and concerns.
When U.S. Franchise suggests a change that would require a substantial financial investment, two-thirds of the franchisees must approve it. If they don't, the change doesn't go through.
Recently, when a consultant criticized the quality of Microtel's complimentary continental breakfast, the company worked with franchisees to come up with a more appealing menu that kept incremental costs down -- instead of simply imposing costly improvements.
The company also gives franchisees geographic protection for the life their licenses, meaning that no other U.S. Franchise motel franchisee will operate in their area. And those agreements protect franchisees against hidden fees.
As to whether its approach to franchisee relations affects U.S. Franchise's bottom line, Mr. Flora says: "I think it makes us money. If my franchisees aren't successful, I'm not successful. So I do everything I can to make them a success."
Write to Richard Gibson at dick.gibson@dowjones.com