Family Business Partnership: Five Tips for Franchising with Family
Have you ever dreamed of starting a business with a member of your family? If so, you’re not alone. There are 5.5 million family business partnerships in the U.S. Not all of them are as famous as Warner Bros. or Walmart, but some, like Gold Star, are very well-known regionally. Going into business with family isn’t for everyone, however. Here are a few suggestions to keep in mind as you consider whether or not to open a franchise with family members.
Be Sure Your Values and Priorities Are in Alignment
Before you enter into any business partnership, it’s important to make sure everyone shares the same values and priorities for the planned venture. For instance, do you all have the same level of enthusiasm for the business? Do you have a similar work ethic? Does everyone have the same goals for the business? Are your viewpoints regarding money compatible? Without a shared vision from the start, you could be setting yourselves up for a lot of conflict and heartache once you begin working together.
Write a Formal Business Agreement
While you may have wonderful relationships with your family, you have to remember that you’re starting a business together, not planning a holiday party. Everyone involved needs to have a clearly defined role within the family partnership business, and all of the plans for your enterprise need to be put in a formal business agreement. In addition to writing down what responsibilities each person’s role will encompass, you should include details such as what percentage of the business each person owns, how much money everyone plans to contribute, how decisions will be made, and what will happen if a family member decides to leave the business.
Communicate Frequently and Honestly
Clear communication is essential in every business, but it’s especially important to make honest communication a priority in a family business. As any family therapist will tell you, families develop their own ways of communicating, and that isn’t always a good thing. One family member may be reluctant to be critical (or maybe they’re too critical) of another. Or perhaps someone is unable to talk about issues without using hurtful comments. It’s natural for family dynamics to make communication challenging, and that’s why it’s imperative to confront issues as soon as they arise.
Don’t Pressure Other Family Members to Work for You
In all likelihood, everyone in your family won’t be interested in joining the family business, and you shouldn’t put pressure on them to do so. Successful businesses require employees who are passionate about their work and good at it. When family members feel compelled to work for you, they may not work as hard as they need to, and they may harbor resentment which can affect the way they treat customers. The same is true when you give a sympathy job to a family member. While it’s natural to want to help out unemployed loved ones, putting them in positions they aren’t qualified to handle will only lead to trouble for everyone.
Choose a Franchise that Makes a Good Family Business
Some franchises lend themselves more readily to a family business partnership. Food franchises, in particular, can be good family businesses. Though foodservice requires hard work, sharing that time among family members can make it easier to manage. When employees are out sick or on vacation, kids or other family members can usually fill in for them. Plus, many parents appreciate the way running a family business helps them instill a strong work ethic in their children.
Start Your Family Business Partnership with Gold Star
The Gold Star story is all about building a strong family business. Founded by four brothers in 1963, Gold Star is famous for our amazing Cincinnati chili and friendly table service. Because we know how successful family-run businesses can be, we love it when families join our team. If you’re interested in starting a family business with Gold Star, fill out the form on our website, and a member of our franchise executive team will be in touch.