The relationship between a franchisor and a franchisee can be a delicate subject. However, there are certain processes and best practices employed by effective franchise organizations that can be duplicated to ensure successful franchise relationships.
Finding a franchisor that is capable of providing the appropriate amount of support is one of the most important characteristics when vetting potential franchise opportunities. This factor is important because whether you will rely on franchise support or not, many of your peers will require support to sustain the brand’s integrity. Emphasis on the importance of building positive relationships between a franchisor and a franchisee will help with the successful implementation and adoption of company-wide strategies and initiatives.
After 15 years of doing business in the franchise industry, I’m still in awe of its uniqueness.
Franchises always start as an idea, fostered by a plan. Through hard work, sleepless nights and countless sacrifices, the plan coalesces into a successful business proposition. The fact that the entrepreneur endured hardships and succeeded, means they can more rapidly scale their “baby” and leverage their experience by allowing others to replicate their success while avoiding countless traps and mistakes they made along the way.
But, there’s just one problem; no one ever teaches the new franchisor how to be a good franchisor.
When the IFA conference was in San Diego, I remember speaking with Sharon, director of marketing for a sizeable multi-brand franchise system. I had just completed a divestiture of my franchise when we began to swap “franchise support” war stories. I shared with her that while I often communicated with my corporate office’s support staff, in the several years I owned my top-performing franchise, I received one proactive communication from the staff member directly responsible for the success of any franchise, my Franchise Performance Coach (FPC).
I never had the need to reach out to this person; I always knew who to connect with at HQ when I needed something. The most unfortunate detail of the story, was that when having my final conversation (as a franchisee) with the senior vice president of franchise operations, I heard excuses rather than questions about how this could be averted in the future. Hearing that from one of the most senior staff members responsible for franchisee success was shockingly pathetic.
Sharon then shared one of the most mind-boggling antidotes I had heard in 11-plus years of franchising.
She started the story noting that several of her brands had experienced a high level of franchisee attrition in 2008. In her story, the FPCs supported franchisees across multiple brands. Sharon was on a planning call with the entire franchise marketing and operations teams when one of the most senior FPCs said, “My personal goal in 2009 is to proactively reach out and assist my worst-performing franchisees rather than waiting for them to ask for help.”
Read that again.
What’s worse, she added, was that the other FPCs were excited about this goal. I can’t decide which is worse – the FPC admitting in front of their entire team that they weren’t doing their job, his colleagues agreeing with him or that no other management personnel was concerned about the admission.
Over the years I’ve worked at a franchise headquarters and have been a franchisee myself, and I understand the tight ropes the franchisor must constantly walk. No matter which side of the franchise model you are from, both stories are unacceptable behavior at EVERY level. Not only are they likely a breach of the legal terms of franchise support models but shouldn’t everyone at corporate recognize that franchisees only ask for help when it’s too late? It’s the franchisor’s job to be proactive.
One of the first franchise systems I worked at had one of the best and most consistent support models I have ever seen in franchising and it was created because they had been sued by a franchisee. The franchisee claimed they weren’t provided the support promised in the franchise agreement. Fortunately for the brand, they lost that lawsuit which prompted them to document EVERYTHING moving forward.
They even developed a custom CRM system that identified franchisees that were overdue for staff visits, among other support issues. The audit system made management recognize that reactive support wasn’t enough to provide their franchisees adequate support for success and fulfill their duties as a franchisor. And here was their key takeaway…franchisees don’t know what they don’t know, so let’s err on the side of over support rather than under support.
Below are a handful of strategies to identify if your prospective franchisor partner has a franchisee communication strategy and a manner in which to hold staff members accountable.
Ask these questions to more than one corporate executive:
1) “As of right now, how many franchisees have not had a call from an FPC in the last 30 days?” Follow up with, “How do you know and how do you verify this?”
2) Ask how many on-site visits each franchisee receives per year (excluding new franchisee training initiatives) in addition to the FPC site visits.
During your franchisee due diligence, ask more than one franchisee the following questions:
1) How frequently do you have planning calls with your FPC? How long do these call last, what do they entail and how in depth are they?
2) How many visits have you had from your FPC in the past 12 months?
3) Over the past two years, how many different corporate staff members have visited you on-site?
By asking similar questions of the corporate executives and the franchisees during your due diligence process, you will be able to quickly understand whether the corporate executives really have their franchisee support under reasonable control or if they are just winging it. If the corporate executive can’t tell you, with a fair amount of certainty, how many franchisees are behind in support calls or the answers from your franchisee discussions don’t reasonably align with the answers from corporate, it may be a red flag worth paying more attention to.
Bryce Ebeling is the founder and CEO of LoyaltyGenerator, an automated cross-media marketing platform that offers franchisors and franchisees a single point of access to an email solution, direct mail printing, text message provider and customer data analysis. With more than 15 years of experience working in and around franchising, Bryce worked in support roles at two mature franchise systems, owned and operated a successful franchise ranked in the top 20 percent of more than 300 units and has consulted with hundreds of independent franchise and non-franchised owners on marketing and operational related challenges.
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