Franchise Relations And The Relevance Of Psychology: So How Do You Feel About That?

Time for my annual "just got back from the IFA Convention" column. I saw lots of my lawyer friends while there-also met a lot of suppliers, franchise consultants, academicians, journalists, and franchisees. Occasionally, I even came a cross a franchisor. Didn't see too many psychologists, however. Why not?

Since I am a lawyer by profession, let me, from the perspective of my day-to-day modus operandi, assert that 90 percent of the practice of the law involves some use of psychology. Thus, psychology has become a subject of particular interest to me. More importantly for the readers of this column: 90 percent of franchise relations require some skill in psychology. And remarkably, neither lawyers nor those charged with managing franchise relations receive much, if any, training on the application of psychological principles or findings to their vocations.

Law school, unfortunately, is channeled, educationally speaking, in a different direction. During those formative years, we were taught to think logically and critically; we were taught the art of expressive oral and written communications; and we were taught, very superficially, the art of dealing with people, but there was minimal emphasis on this ever-so-important skill. "Psychology and the Practice of Law," was almost without exception a non-subject. If taught, it was probably at the seminar level, with enrollment limited to eight seniors and offered on Saturday morning at 8 am (a clear non-starter). At least, this was the scene thirty or more years ago.

Although law schools have evolved, marginally, since the Paleolithic age, on their thinking about the relationship between law and psychology, I doubt the scene changed much as we moved into the 21st Century. The result: lawyers have often not been adequately trained to handle the personnel situations they face every day.

For all those lawyers reading this column, who, I might note, are skeptics by training, think carefully about those dreaded years in law school. How much did you learn about dealing with clients' problems from the personal relations standpoint? Compare: today, in your practice, how much of each day is spent on issues that don't require any special legal knowledge, as compared to handling (some might say manipulating) people. My days are now spent mostly in negotiating, starting with my administrative assistant (f/k/a a legal secretary), and then other lawyers, firm management, and occasionally a client or two. How much did you learn about negotiating, an applied field of psychology, in law school?

Similarly, those involved with franchising often have minimal training in psychology or matters of human relations, and yet that is what most of franchising is about. We all attend franchise seminars discussing how to sell franchises, the legal ramifications of such, how to end the relationship and the associated legal issues pertaining to this endeavor, and how to train field operations personnel. But rare are the courses that focus upon communicating with franchisees as persons, or on how franchisees should communicate with the franchisor.

We do see programs on how to organize franchise advisory counsels that superficially talk about such things as how to organize a meeting, the use of email to communicate, what topics are appropriate for an FAC to consider at meetings and the like. Those rare programs that touch (and I do mean "touch") on the relationship issues are typically taught by people like myself who may be trained in the real world, but lack an academic framework in which to categorize these experiences.

How many courses focus on the needs of the franchisor or the franchisees as persons? How many focus on the art of effective franchisor-franchisee communications? How do you make sure that the other party correctly hears what you intended to communicate? The brain is an amazing piece of machinery, but the message said is often not the message received-a psychological principle many of us have trouble grasping.

I raise these points now because I have probably spent too much time recently with psychologists. Not so much flat on a couch wailing about the ills of my childhood, I should note, but in seminars led by psychologists, rather than lawyers (my usual hangout), who have discussed principles of human psychology and applied them to franchise contexts.

On a recent trip abroad, I was invited to attend a seminar in Australia at which the majority of speakers were psychologists, with experience not in counseling franchise systems, but in lecturing on more general principles of human nature, most of which were applicable to franchise environments.

Another seminar I recently attended was taught by Greg Nathan, the managing director of the Franchise Relations Institute in Brisbane, Australia. He's one of those Australian psychologists who has devoted his career to educating and counseling franchisors and franchisees on the subject of franchise relationships, and thus had a firm grasp not only on the principles of psychology but how they played out in the franchise context. (Nathan presented at the IFA Annual Convention in Palm Springs, and will be presenting to the American Bar Association Forum on Franchising at its Annual Legal Symposium in Boston in mid-October.) A rare bird indeed-not one sighted in these environs.

I learned more useful information at these programs on how to guide my clients within the franchise environment than I learned in the last ten legal seminars I attended. And, interestingly enough, most of the principles were applicable to how law firms function and attorney-client relationships as well.

My favorite presentation was entitled "Dealing with Difficult People." My comment in the evaluation form for this program was that I liked this course the best because it helped me better understand how to deal with myself. Of course, most lawyers are not difficult to deal with, and I am clearly the exception.

Remarkably, there has been little focus in the United States franchise "community" (we never say "industry") on the basics of psychology as they apply to franchise relationships. We all recognize the importance of psychological counseling in human relationships generally-husband/wife; parent/child; boss/employees; and management/shareholders of family businesses; but the franchising community (we never say "industry") has been slow to recognize how consultations with psychologists could better relationships between franchisor and franchisees. We speak in terms of profitability, instead.

Ever counsel a private equity fund interested in buying a franchisor? They crunch numbers and the wisely-counseled ones will try to get a pulse on the relationship of the franchisor with its franchisees, but even for them it is ultimately all about money, and the intangibles between franchisor and franchisee do not show up on the balance sheet, nor are they accurately reflected in the calculation of EBITDA. Concerns for the personal relationship between founder and followers, the skills of the franchisor in understanding the needs of its constituents, and the skills of communicating effectively so that the message is not just expressed, but received and understood, do not show up on the due diligence report.

As my exposure to the "community" of psychologists has increased, I have less frequently referred to their guidance disrespectfully as "psychobabble"--a term I have traditionally used in a manner of scorn and doubt as to the effectiveness of psychologists. There is clearly something here that needs further exploration by the franchise community. Although we may like to think that the relationships between franchisors and franchisees are good, can we truly say that we know what we and the other side of the equation are thinking or feeling? We must not always believe our own propaganda without questioning.

Rupert Barkoff is a partner in the Atlanta office of Kilpatrick Stockton LLP, where he chairs the firm's franchise practice. He is also a former chair of the American Bar Association's Forum on Franchising. He can be reached at barkoff@kilpatrickstockton.com.