Franchise tension

In any franchise-based business model, there is always tension between the franchisor and the franchisees.   The franchisor develops a system and brand(e.g. McDonalds, Marriott, Curves)  and licenses it to franchisees.  The franchisee is responsible for an initial investment and paying some type of royalty back to the franchisor.  The tension comes when the franchisor tries to require new investment by the franchisees — in new equipment, new signage, new menu items, etc.  The franchisor wants to maintain the brand and to innovate the system.  The franchisee wants to make sure it gets a return on investment and does not waste energy on things that do not add value to the customer. 

In the current economic environment, these tensions are increased as franchisees resist costs being imposed.  See the story here in the WSJ.