Part 2: Lessons Learned From Family Franchise Mistakes

Editor's note: Click here for part 1.

The fallout from a bad hire often lingers in family relationships long after the professional connection has ended. Emotional baggage from workplace disagreements can lead to estrangement or unresolved conflicts.

The fired cousin

One multi-unit franchisee made the difficult decision to fire a cousin who was underperforming in a managerial role. While the decision was necessary for the health of the business, it created long-term resentment. The cousin bad-mouthed the franchise owner to other relatives, and the once-close family bond fractured under the strain.

Key takeaway: Before hiring a family member, consider the potential consequences of their failure to perform. Set clear expectations up front and have an exit strategy in place to minimize emotional fallout.

Why accountability matters

One of the biggest challenges of hiring family members is maintaining objectivity. Without accountability, a family hire can feel entitled or believe they are immune to the same standards as other employees.

The micromanaged grandchild

A grandfather who owned multiple franchise units hired his grandchild and took on direct supervision. Unfortunately, his micromanagement stifled the young employee's growth and confidence. The constant criticism led to the grandchild quitting, and their personal relationship suffered as a result.

Key takeaway: Let professional managers oversee family members to ensure impartiality. Direct supervision can lead to overindulgence or excessive criticism, both of which harm employee performance and morale.

Avoid the bad-hire trap

So, how can you protect your business and family relationships from the fallout of a bad hire? Here are four key strategies:

• Set clear hiring standards. Family members must meet the same qualifications and standards as external candidates. Avoid creating roles just to accommodate a relative.
• Establish objective oversight. Allow an independent manager to supervise family hires. This ensures fair treatment and avoids the complications of direct family supervision.
• Communicate expectations clearly. Define roles, responsibilities, and accountability measures before hiring a family member. Transparency is key to avoiding misunderstandings.
• Plan for the worst. Create a contingency plan for what to do if the hire doesn't work out. Knowing how to address this possibility will make the situation less emotional if it arises.

Lessons learned

Bad hires are never easy to manage, but when family is involved, the stakes are even higher. As these stories illustrate, hiring family members without proper planning can lead to emotional, financial, and relational turmoil. By treating family hires with the same professionalism as any other employee and setting clear boundaries, you can avoid these common mistakes.

The future of your franchise depends on making the right decisions today. Learn from the cautionary tales of others and prioritize accountability, fairness, and preparation in your hiring process. Remember: A good hire is an investment, but a bad one can be a disaster waiting to happen.

Click here to download a free scenario planning template, and click here for a free family dynamics guide.

Kendall Rawls with Rawls Succession Planners knows and understands the challenges that impact the success of a complex, privately held, and family-owned business. Contact us today to arrange a consultation and discover how we can empower you to overcome obstacles and achieve lasting success. Whether you're navigating regulatory shifts or striving to build a top-tier team, we're here to help you thrive in today's multi-unit franchising landscape. For more information, visit seekingsuccession.com or email [email protected].