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Creating a Feedback Loop

Monitoring and controlling franchisee behavior emphasizes the aspects of the franchisor–franchisee relationship in which the goals of the two parties are seemingly inconsistent. However, these inconsistencies are minor in comparison to what the two parties have in common. The best interests of both the franchisor and franchisee are served when brand equity is built and the end customer is better served. As a result, it is important for both parties to abandon the “us against them” mentality and instead work together to strengthen the system. Communication between the two parties is essential to create a strong working relationship; this seemingly simple mechanism will often separate great success from immediate failure.

Franchisors such as the Great American Cookie Company (GACC) and Kampgrounds of America (KOA) recognize that franchisees know customers in a way that the franchisor never could. These franchisors have tried to understand and integrate into the system the ideas provided by franchisees by working closely with franchisee groups. For example, the franchise association for KOA for years had been requesting that the company adopt a central reservations system supported by a toll-free telephone number and had consistently been denied by the franchisor. When rival camps implemented such systems, KOA was in a position of playing catch up. When the toll-free telephone system was finally implemented, it was an immediate success. An August 1997 Success Magazine article states that, “KOA is one of a growing number of franchisors that are giving serious attention to franchisee groups, turning to them for ideas on everything from packaging to rewriting their franchise agreement.”


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