Franchisors who want to be great—or even good—need to do more than what’s required. The rewards for doing more to develop the best possible franchise system from the start almost always outweigh the costs involved. In our consulting practice, one of the first questions many future franchisors ask us is: what are the basic steps I have to take in order to franchise my business properly? We inform them that, at a minimum, they need franchise legal documents (Franchise Disclosure Document and Franchise Agreement) and an operations manual, but should also consider the following best practices:
Enhancing Quality Control
Maintaining quality within a franchise system is one of the most important roles that franchisors need to undertake. To that end, franchise field support teams should visit franchisees on a regular basis to assure the franchises are living up to brand standards. Even during the pandemic, the best franchisors have found ways to assure compliance, sometimes through remote visits. The best franchisors are consistent and insistent about enforcing brand standards. Importantly, they develop a culture where other franchisees in the system are also focused on quality control. These franchisees often become the biggest advocates for quality control because they do not want to see the brand undermined by sub-par franchisees.
The best franchisors also put a premium on training. Early-stage franchisors may piece together a somewhat informal training program. Without proper training, the Franchise Operations Manual may well fail at its assigned task of quality control. As franchisors grow and look to expand even more aggressively, they develop more formal training programs designed to train in a consistent manner, including a specific schedule of exactly what will be taught and learned: from skilled technical tasks to operational and administrative activities. These training programs can be housed on a learning management system (LMS) and may include streaming video, audio, PDFs of sections of the operations manual, narrated PowerPoints and links to external content (such as government websites).
For franchisors launching or growing their programs during the pandemic or post-pandemic, these types of quality control measures and franchisee assistance will help set a franchisor apart from the competition. If you’re successful in delivering value to your franchisees and focused on quality control, you’re much more likely to create the win-win-win relationship that’s the hallmark of successful franchising.
Franchisee Supplier Benefits
One of the biggest benefits a franchisor brings to the table is its increased buying power. Franchisors have already done the hard work of choosing vendors, including some trial and error along the way. Shielding franchisees from these mistakes and bringing volume discounts are among the best benefits of a franchise system. Even a small franchise system can generally purchase more effectively than a single unit can, and larger chains can offer franchisees even more substantial volume discounts. Some franchisors choose to simply pass along the negotiated discounts; others provide rebates to franchisees. Either way, the value to the franchisees is unquestionable.
Don’t Neglect the Customer
The success of franchisees will always be the hallmark of any franchise system. It’s really quite simple – the more successful the franchisee, the more they validate for future franchisees, the more the franchisor receives in royalties and the less support needed.
One important way to help ensure franchisee success is to constantly strive to improve the value proposition at the consumer level. At the top of the list for franchisee support in this area is to provide brand advertising and marketing templates and guidelines for a franchisee’s consumer marketing efforts. Better, more consistent consumer marketing leads to increased franchisee profits from increased sales. In addition, the marketing assistance the franchisor provides allows the franchisee to focus more on its core operations and customer service.
Offer your franchisees great consumer marketing materials they can leverage in their local territories. A qualified consumer advertising agency is often an important early “hire” for a franchisor especially if materials development has been done in-house up to this point. Another important hire is a good PR firm which can use its established relationships with the media to highlight the brand’s achievements and keep the brand top of mind to the consumer, as well as the potential franchisee.
Finally, franchisors should invest in ongoing research and development. Franchisees will look to the franchisor to keep the brand consistent while adapting in ways that will continue to improve the system. Enhancements can come in the form of new products, new menu items, new services, new delivery methods, new advertising or new suppliers. Remember, when McDonald’s started franchising, they only had 14 items on their menu. No Big Macs. No Filet-O-Fish. No breakfast. No salad. No drive-thru windows. All those revenue-generating items were added over time, as the result of franchisee input as well as ample R&D by the franchisor.
Smart franchisors realize that franchising is an entirely different business than normal corporate-owned operations, and that it requires they invest in that line of business accordingly. Ensuring quality control, optimizing franchisee assistance, paying attention to supplier networks and customer engagement, and remaining committed to continually improve upon the business model are vital steps any franchisor must take in order to build the best franchise program possible.