The holiday season often brings thoughts of giving and unity, but in the world of franchising, conflict continues to brew between franchisors and franchisees. The recent controversy surrounding Subway’s discontinued $6.99 footlong deal highlights the ongoing friction over pricing, marketing, and profitability. This episode explores these challenges and proposes solutions to align the interests of both parties.

Franchisors and franchisees frequently find themselves at odds, each viewing the business through a different lens. Franchisors are focused on generating sales, often through heavy discounting and promotions, while franchisees are concerned with maintaining profitability. The Subway example illustrates this tension, as the deal failed to deliver expected sales and ignited a backlash from franchisees who struggled to remain profitable at such low price points.

To address these conflicts, it’s crucial to consider innovative approaches that align the goals of both franchisors and franchisees. One potential solution is to base royalties on franchisee profitability rather than sales. This shift would require investments in technology and business processes to ensure consistency and execution, but it could foster a more collaborative relationship. By providing franchise business coaches, franchisors can support franchisees in achieving success, creating a true win-win scenario.

In today’s competitive business climate, with tight margins and intense competition, it’s essential for franchisors to demonstrate thought leadership and chart a course to prosperity for their franchisees. By pulling on the same rope and measuring success through the same metrics, both parties can achieve mutual success.