Here’s How Franchisors Can Help Their Franchisees Lead and Manage People to Gain a Strong Culture and a People-Focused Business
As the pandemic continues shaking up the workforce, more and more people are seeking freedom and independence. That’s one reason the franchise world is booming. Last year saw a 2.8 year-over-year increase, and experts predict that growth to continue throughout 2022. Franchisee hopefuls seek out the flexibility of running and managing their own businesses while still having proven resources and guidance of established brands to guide them. But the guidance from a franchisor needs to go beyond simply operating the business. Franchisors should also show franchisees how to build a people-focused business.
Amid this boom, franchisors will need to innovate to stay competitive. Putting a greater focus on people is one way to do it. As a franchisor, you’re likely very familiar with developing and sharing your operations manual, outlining proven operational processes. McDonald’s, for instance, is one of the best-known franchises with a well-proven operations manual designed to guide consistency.
Some franchisors are also working to better train and empower workers to potentially work toward becoming franchisees themselves. Taco Bell recently established a Taco Bell Business School in Louisville, Kentucky. The school runs six-week boot camps to train restaurant leaders on franchise ownership. While an entire school and training regime isn’t a reasonable expectation for every franchise, there are thankfully proven business operating systems already in existence that can give companies a strong framework for both people and operations management.
Business operating systems function much like computer operating systems — they make sure the organization runs smoothly, with all the individual parts properly communicating and interacting. While a business operating system might initially seem to benefit management, an environment of clear vision, consistent goals, and good communication positively impacts every aspect of a company. It sets a baseline for how the company operates (and flourishes) how each individual succeeds within the company.
Why It’s Time for Franchisors to Prioritize Building Culture
While an operations manual might help franchisees adhere to proven business processes and create consistent products, it doesn’t create long-term momentum for success. Further, it builds upon rule-setting to legalistically govern a company. Rather than applying a set of rules at the end, a good franchise needs to have healthy company culture within its foundation. If it’s missing? Dig up your foundation and rework the system from the bottom up. Both your team and your business will thank you.
Holding a consistent team together with a strong culture can increase the amount of institutional knowledge across a company and drive better outcomes. In fact, almost 70% of senior leaders in one survey who said their organizations were able to adapt well throughout the pandemic also reported that their strong cultures gave them an advantage.
People-Focused Business Operating System Elements to Implement for Long-Term Success
Essentially, franchisors need to ensure their franchisees are aligned with the core values of the business and are well equipped to lead and manage people in a way that contributes to a strong culture within the organization. Incorporating these key steps of a business operating system with a people focus can help build a people-focused business:
1. Following a Clear, Overarching Vision
The nature of the franchise model often contributes to a fragmented overall vision, with each franchisee working toward siloed objectives. Instead, franchisors should equip each franchisee with a clear vision of long-term business goals. Essentially, the vision you outline should answer the question “Where are we going?” to steer each franchise in the same direction. Then, get your people on board with that vision.
When you think about how to craft a clear and actionable vision statement, consider what inspired you to lead the business in the first place. Think about the business values and principles that are most important to you, and align specific objectives with those values. IKEA, for example, has the shared vision “to create a better everyday life for the many people.” With this focus on creating a high quality of life for its customers, every IKEA franchisee knows that its primary objective is to understand and meet the needs and wants of its customers.
Once you have that vision, communicate it to your employees. One survey found more than 75% of employees believed it was “very important” that their companies had a set of core values. Finding these employees that are excited to nurture these values is paramount for your company. They’ll find more purpose in their day-to-day work, which will lead to better outcomes in both work and life.
Hiring competent employees who don’t believe in the vision and can’t promote the culture within a franchise won’t help the business deliver on long-term objectives.
2. Finding and Developing the Right People
Franchisors should highlight the importance of people for franchisees, outlining the significant impact of smart hiring, mentorship for employees, and investing in employees through training and development opportunities.
To start, each franchisee must be able to build a staff that can align to achieve the vision. When it comes to guidance around hiring and people management, franchisors should highlight that culture fit is just as important as competence and skills fit for any position. Hiring competent employees who don’t believe in the vision and can’t promote the culture within a franchise won’t help the business deliver on long-term objectives. To be effective people managers, franchisees need to start with the right people.
3. Putting Data to Use
Many franchisees collect and report on data, but to deliver on your vision, data collection should be more than the passive action of gathering numbers and handing off reports. Instead, franchisors should outline how franchisees can glean valuable insights from data and use those insights to drive the business forward.
For example, demographic and psychographic consumer data can help franchisees align their service to specific audiences. OrangeTheory Fitness, for example, collected site scoring and demographic reporting from franchise owners to understand current and prospective areas for additional sites. And franchisees can use similar data to understand their customers’ behavior and preferences to shape customer experiences accordingly.
4. Resolving Problems for Good
Franchisees don’t always understand how to solve issues for the long term. They might be great at problem resolution in the moment, pivoting quickly to ensure operations can continue running smoothly for the short term, but without knowing how to dig down to the root cause of an issue and solve it at the source, they’re likely to see those problems popping up again and again down the line.
Franchisors should equip them with the tools and strategies they need to solve issues for good. Dictating a regular meeting cadence for franchise owners and their leadership teams can be an excellent place to start. In a weekly leadership meeting, for example, managers could bring feedback from employees directly to franchise owners to ensure they’re apprised of any issues, and the team can dig to the root cause and develop a solution together.
If employees are frustrated with high turnover rates, for example, leadership teams might realize the core of the issue is that employees are feeling their feedback is going unheard and unaddressed. A potential solution could be for managers to set up weekly meetings with employees, inviting the staff to open up about issues they’re experiencing.
The Road to a People-Focused Business
By considering the areas above, franchisors can equip franchisees for effective people management along with efficient day-to-day operational processes. At the end of the day, every single business is a people business, and excellent people management will always be a key indicator of long-term success.