With strong quality controls in place, franchised locations very frequently outperform company-owned and hired manager-run locations
Companies looking to expand their business through franchising sometimes fear that “giving up” operational control to a franchisee will lead to shortcomings in the quality of operations. This is a simple misunderstanding: equating operational control with quality control. While it is true the franchisee controls day-to-day operations, the strongest franchise systems are still able to maintain the highest levels of quality control. In fact, with strong quality controls in place, franchised locations very frequently outperform company-owned and hired manager-run locations.
While franchisors need to be careful not to exercise too much control (because of agency, joint employment and other concerns), the franchisor should exercise strong quality controls over any aspect of the business that will impact the consumer’s perception of the concept or brand standards.
These quality control measures roughly fall into four categories:
Legal Documentation
The broader outlines of franchise quality control measures will come from the franchise legal documents (trademark use, training requirements, territory and product mix, approved and designated suppliers, and similar matters). It is vitally important that franchisors use legal counsel experienced in franchising to draft the Franchise Agreement and Franchise Disclosure Document to ensure the documents protect the franchisor’s best interests and reflect current best practices. For their part, franchisors need to be vigilant in enforcing the standards outlined in the legal documents. If one franchisee is allowed to circumvent the rules, others could soon follow, and quality for the whole system could be in jeopardy.
Franchisee selection
There is almost nothing that impacts the success of a franchise system as much as franchisee selection. While lead generation is important, it is only the first step in a long journey. Remember, successful franchise systems depend on successful franchisees. Franchisors are not doing themselves or the franchisee any favors by failing to thoroughly vet a candidate before awarding a franchise. Both hard skills and soft skills need to be considered, as well as financial capabilities. In qualifying prospects, it is helpful to group the criteria into three areas: capitalization and credit, fit within the organization, and work ethic and personality. For some organizations, a particular skill set is also required (previous industry experience, business management background, sales skills, etc.).
Documented systems
The franchisor’s systems need to be documented in detail to give franchisees a roadmap for success. Access to these documented systems is why many would choose to buy a franchise rather than going it alone. In franchising, systems are documented through a confidential franchise operations manual which incorporates information essential to the initial and ongoing operation of the franchise. The operations manual plays a key role in training the franchisee and an ongoing role in the operation of the business. The growth of learning management systems, which can also incorporate the operations manual, has been an enormous help to franchisor quality control efforts. There are numerous systems available within the franchise community and virtually every franchisor can include its quality control documents, training programs, training videos, and communication platforms in a system without breaking the bank.
Training and support
Franchisors maintain the quality of their brand by making sure their franchisees are properly trained to run the franchise and by providing ongoing support. Franchisees need to be supported at every stage of their franchise ownership experience. The type of support, of course, will vary with the brand and the franchisee. Even industry-experienced candidates need to be trained to maintain the quality standards of your brand. For most systems, the right training mix involves independent study, some classroom (including online classroom) components, and significant hands-on training. It is valuable, as well, for members of the franchisor’s team to assist with store openings and business launches. Most franchisors provide some level of ongoing field support as well, covering important topics such as finances, marketing, ongoing operations, facility maintenance, and more. All of these training and support components set the tone for the franchisor-franchisee relationship and can help make “quality control” feel not so controlling.
With carefully selected franchisees steering operations and franchisors using these methods of quality control, the franchisor can help promote franchisee success, which in turn, will attract more candidates for further growth.