How can you use a BATNA to resolve franchise disputes?

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Franchising can be a rewarding way to grow your business, but it also comes with potential conflicts between franchisors and franchisees. Whether it's about fees, territories, quality, or policies, disputes can arise that damage the relationship and the brand. How can you resolve these disputes in a constructive and fair way? One possible tool is the BATNA, or the best alternative to a negotiated agreement. In this article, we'll explain what a BATNA is, how to find yours, and how to use it to reach a win-win outcome.

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James Whitehouse

California Public Utilities Commission

1 What is a BATNA?

A BATNA is the most attractive option you have if you walk away from a negotiation. It's not your ideal scenario, but it's the best you can do without the other party's cooperation. For example, if you're a franchisor and you have a dispute with a franchisee over royalty payments, your BATNA might be to terminate the contract and find a new partner. If you're a franchisee and you have a dispute with a franchisor over marketing support, your BATNA might be to switch to a different franchise or operate independently.

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Yuri Fernandes Pires

Gerente de Expans?o de Franquias I Gestor Comercial I Executivo de Desenvolvimento de Negócios I Gest?o de Equipes I Negocia??o I Closer I CRM
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Em minha jornada vejo que o BATNA me ajudou a solucionar diversos conflitos e n?o apenas negocia??es de vendas. Me remete muito a teoria dos jogos, porém ao invés de pensar na melhor jogada do adversario me faz pensar no pior cenário possível, no caso um impasse ou desacordo. Fazendo o questionamento "Se o acordo ideal n?o der certo, o que pode ser bom para ambas as partes?", você come?a a exercitar diversos cenários e se prepara para a maior parte deles.

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2 Why is a BATNA important?

A BATNA is important because it helps you evaluate the value of the current offer and the cost of rejecting it. It also gives you leverage and confidence in the negotiation, because you know you have a fallback option. A BATNA can also help you avoid accepting a bad deal out of fear or desperation. For example, if you're a franchisor and you know your BATNA is to terminate the contract, you won't be tempted to lower your fees or compromise your standards to keep a franchisee who is not performing well. If you're a franchisee and you know your BATNA is to switch to a different franchise, you won't be pressured to accept unfair terms or inadequate support from a franchisor who is not delivering value.

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James Whitehouse

California Public Utilities Commission
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In my experience, the importance of preparation for a negotiation cannot be overstated. The BATNA is a great example. Understanding the nuances of the best alternative to a negotiated agreement for your client is very important because it not only identifies the bounds of the deal, but also the wiggle room you may or may not have. Understanding your counterpart’s best alternative to an agreement is equally important because that knowledge is leverage when you walk into a negotiation.

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3 How to find your BATNA?

To find your BATNA, you need to conduct research and analysis to identify all the possible alternatives you have if no agreement is reached. Rank these alternatives according to your preferences and criteria, and estimate the feasibility and attractiveness of each one. Consider the risks, costs, benefits, and consequences of each option. The highest-ranked alternative that is realistic and achievable is your BATNA. For instance, if you are a franchisor in a dispute with a franchisee over territory expansion, you may consider terminating the contract and finding a new partner in the same area, terminating the contract and expanding to a different area, negotiating a higher fee or a lower territory size with the current partner, negotiating a joint venture or co-branding agreement with the current partner, or maintaining the status quo. Evaluate each alternative based on your goals, interests, values, and resources to determine which one best suits your situation.

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Yuri Fernandes Pires

Gerente de Expans?o de Franquias I Gestor Comercial I Executivo de Desenvolvimento de Negócios I Gest?o de Equipes I Negocia??o I Closer I CRM
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Acho de extrema importancia antes de você entrar em uma negocia??o fazer a análise de todas as alternativas possíveis, classificá-las e ordenado-as melhores benefícos e menores riscos (assim verá o melhor custo-benefício). Após isso, veja se as alternativas possíveis s?o alcan?aveis e realistas, para que você possa se adaptar as situa??es. Essa abordagem ajuda a fortalecer a posi??o de negocia??o e a maximizar os resultados obtidos em uma negocia??o.

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4 How to use your BATNA?

Once you have found your BATNA, it can be used to guide your negotiation strategy and tactics. You should set your reservation point, which should be equal to or slightly higher than your BATNA, to show the other party that you are not desperate for a deal. Additionally, you can compare the other party's BATNA to yours to estimate their zone of possible agreement. Furthermore, you can generate creative options and trade-offs that can improve both parties' BATNAs. This can help you create value and expand the pie, rather than fight over a fixed sum. By utilizing your BATNA in this way, you can increase your credibility and persuade the other party to make a better offer or be more flexible.

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5 How to avoid BATNA pitfalls?

A BATNA can be a useful tool, but if not used properly, it can lead to a few pitfalls. Overestimating your BATNA can make you unrealistic and unreasonable in your demands, while underestimating your BATNA can make you weak and vulnerable in negotiation. Additionally, revealing your BATNA too early or too late, or in an inappropriate way, can reduce your bargaining power or trustworthiness. Lastly, ignoring the other party's BATNA can make you insensitive and unresponsive to their needs and interests. Being aware of these pitfalls can help ensure a successful negotiation.

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Yuri Fernandes Pires

Gerente de Expans?o de Franquias I Gestor Comercial I Executivo de Desenvolvimento de Negócios I Gest?o de Equipes I Negocia??o I Closer I CRM
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O melhor para n?o cair nessas armadilhas é preparar-se investindo tempo em planejamento e pesquisa antes da negocia??o. Deve-se manter uma comunica??o clara, empatica e objetiva, mantendo-se com uma postura positiva e proativa para que o outro lado n?o entenda que "já esta ganho" e busque adapta??o para todos os cenários possíveis.

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6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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How can you use a BATNA to resolve franchise disputes?

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6

1 What is a BATNA?

2 Why is a BATNA important?

3 How to find your BATNA?

4 How to use your BATNA?

5 How to avoid BATNA pitfalls?

6 Here’s what else to consider

Franchising

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How can you use a BATNA to resolve franchise disputes?

1

2

3

4

5

6

1 What is a BATNA?

2 Why is a BATNA important?

3 How to find your BATNA?

4 How to use your BATNA?

5 How to avoid BATNA pitfalls?

6 Here’s what else to consider

Franchising

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