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How to handle conflict in a franchise business

Although conflict can be seen as a necessary part of a dynamic franchise business relationship, being aware of what causes some conflicts is the key to being better equipped to handle rising tensions and smooth issues over in more efficient and effective ways.

There are some situations where conflict is unavoidable and sometimes a little bit of conflict can help maintain a healthy and strong relationship. Conflict can allow people to vent frustrations, share problems and create solutions.

Here are some reasons for conflict and how to handle the situations in a positive and efficient way:

Lack of communication

It’s an obvious yet main cause of conflict in many relationships. The lack of communication between two business partners can be the catalyst for many issues that arise during their time as partners.

Although franchisors may have the final say when it comes to overall business decisions, franchisees should be included in at least some of the decision making processes. Franchises that have balanced communication systems between franchisor and franchisee run much more smoothly, have less resistance to change and overall see less conflicting situations.

Lack of support

Franchisees sometimes feel that the support they actually receive from a franchisor does not meet the levels that they expected when they agreed to become a franchisee.

In some cases it comes down to false information provided by a franchisor claiming to have levels of support that actually don’t exist. Other times it comes down to there being a lack of communication on the franchisee’s part about the support they expected to receive.

Either way, both parties should always communicate their expectations before a contract is signed.

A lack of care and responsibility

Both franchisors and franchisees need to understand what their responsibilities are to one another and be mindful of these when issues arise.

Both parties, before any contracts are signed, need to be aware of, and completely understand, what the others’ expectations are and whether or not they can be met.

Recruitment ethics

When recruiting franchisees it’s important that franchisors take the time to find the right people to do the job. When a franchisor does not follow through with the correct training, provides access to unsuitable advisors or decides to take on unsuitable franchisees for their own monetary gain – that is where franchises begin to see and feel the impact of conflict.

Franchisors must be accountable for getting their recruitment message across in an effective way to minimise confusion, financial issues and promote growth in each franchisee. A lot of franchisees are first time business owners and need to be supported by their team.


Many a conflict arises when unrealistic expectations are set but then never met.

Franchisors must be clear about what exactly a prospective franchisee will be getting when they buy into the franchise. A prospective franchisee should be provided with relevant information that explains exactly what they need to do in order to run their franchise successfully.

Not only does it ensure that the franchisor is recruiting the right people but it also creates a positive and trustworthy relationship from the very beginning.

Negotiation and communication will always be the best way to solve small conflicts that arise. However, if a conflict does arise that seems to be a serious issue or can’t be solved by both parties communicating the best course of action would be to seek out help from a professional advisor.

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Raffael Fernandes

Raffael Fernandes

Raffael Fernandes is Sales Manager at Franchise Business.com.au, the official online business directory of the Franchise Council of Australia, listing franchises and service providers. Owned and operated by Catch, an online division of Reed Business Information Australia, FranchiseBusiness.com.au provides a comprehensive central online source of franchise opportunities and industry updates and news.

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