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Franchisee Advice

Support Services a Franchisee is Entitled To

Extensive franchisee support is a cornerstone of franchising; without it, there would be little point in investing in a franchise.

Mark Rose

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Unfortunately the term ‘franchisee support’ is open to interpretation. It is unavoidable that the nature and extent of support a franchisor provides varies depending on the industry sector. However, agreement exists that certain basic services are non-negotiable; this article lists the most important of them.

Launching the franchisee’s business

In a properly managed franchise organisation franchisee support will kick in long before the franchisee starts trading. One could even argue that franchisee selection is a form of franchisee support. Accepting an individual into the network who is patently unsuited for the role would be detrimental to everyone involved, not least the unfortunate franchisee.

Once the franchise agreement has been signed and the cooling-off period has lapsed, franchisee support commences in earnest. Depending on the needs of the industry sector, some or all of the following applies:

  • Site selection

In business sectors where the right location is important, for example in retail and fast food, the franchisor’s experience in site selection is invaluable. Should the network’s brand be well known and draw people to the location, it may even make it easier for the franchisee to secure an attractive site and negotiate a more equitable lease.

  • Raising finance

The franchisor’s involvement in helping the franchisee raise finance is invaluable. The brand’s standing and the franchisor’s input lend credibility to the assumptions on which the financial projections are based.

  • Initial training

Because many new franchisees lack business experience, formal initial training is essential. It consists of a reasonable mix of classroom training and working in a franchisor-owned outlet. Many franchisors use the network’s operations manual to guide the franchisee through the entire training process.

  • Getting the new business up and running

Dealing with shopfitters, decorators and equipment installers is not for the fainthearted. The franchisor’s new store setup team have done it all before. Drawing on their experience and armed with architectural drawings, specifications and checklists, they ensure that everything pans out as it should while keeping costs in check.

  • Recruitment and training of staff

The franchisor provides a list of key staff. Depending on circumstances, staff training will either be conducted at a company-owned outlet or the franchisor’s trainer works alongside the franchisee’s staff until the network’s operating standards become second nature to them.

  • Access to existing customers

Most franchisors offer territorial protection. This often means that a new franchisee ‘inherits’ existing customers or gains access to servicing branches of the network’s national accounts within the territory. Moreover, the brand and its existing infrastructure lend credibility to tenders submitted by franchisees.

  • Grand opening

This is the final step in the startup phase. The franchisor arranges a ‘Grand opening’ that puts the new business on the map.

Ongoing support

The grand opening does not signal the end of franchisee support. It is the beginning of a new phase that lasts for the duration of the franchise agreement.

  • Joint marketing

Franchisees benefit from an ongoing national promotional programme the franchisor operates. Franchisees’ local marketing initiatives can be slotted in.

  • Joint purchasing

In suitable circumstances the franchisor will negotiate bulk deals with suppliers on behalf of the network. In some sectors the resulting savings exceed the rand amount of franchise fees payable.

  • Ongoing concept development and training

The franchisor monitors developments in the market and creates products and services that keep the brand at least one step ahead of its competitors. This keeps franchisees’ offering fresh and allows them to focus on customer service. Ongoing training keeps the franchisee and his/her staff acquainted with the latest products, systems and procedures.

  • Assistance with setting prices

From the franchisee’s viewpoint the franchisor’s experience in setting correct prices is invaluable. Competition legislation prohibits the setting of prices but most franchisors publish recommended retail prices that serve as a guide.

  • Mentoring service

Field service consultants serve as a conduit between headoffice and franchisees. They also offer troubleshooting advice, act as mentors and provide motivation and encouragement. Lastly, they review business performance and help franchisees benchmark their operations against similar units in the network.

  • Regional and national conferences

Franchisors arrange periodic regional and an annual or biannual national conference during which franchisees exchange ideas, learn about the latest developments within the network and the sector as a whole and build useful personal relationships.

To sum up, there can be little doubt that a prospective franchisee who selects the correct franchise opportunity and then utilises the services the franchisor offers receives excellent value in exchange for payment of the initial and ongoing franchise fees.

Written by Mark Rose of Nedbank and Eric Parker of Franchising Plus.
Copyright of this article rests with the authors.

Mark Rose is the Head of New Business Development at Nedbank Business Banking. He holds a Masters in Business Administration (MBA) from the Oxford Brooks University, as well as various business qualifications from the Gordon Institute of Business Science (GIBS), the University of Stellenbosch Graduate School of Business, and the University of South Africa Graduate School of Business. Nedbank’s New Business Development unit develops customised industry specialised offerings to the medium sized business market, including Franchising, Agriculture, Professional – including Financial and Legal Practices, and the Medical Fraternity. This unit has also developed a unique Enterprise Development proposition. For specialist advice and more information on the Nedbank Franchising proposition visit the website or send an email to franchising@nedbank.co.za

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Franchisee Advice

Develop Digital Marketing Competency In 3 Simple Steps

Conquering the digital revolution needn’t be daunting. Polish up your tech skills and watch your digital marketing prowess increase throughout your franchise.

Diana Albertyn

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As a franchisor, digital marketing may be proving to be a challenge due to the unique structuring of the business.

“The very nature of franchises is ‘structured’, however, when it comes to marketing, that structure often lacks,” says Marcela De Vivo, Founder and CEO of Gryffin Media.

Franchisors and franchisees often struggle to reach common ground when looking to achieve different marketing goals. While the franchisor needs to control the brand in its entirety, the franchisee wants to market their business using particular strategies suited to their location.

Research has found that smartphones are the biggest influencers of 82% of users when they make their in-store purchase decisions while. It’s for this reason that the importance of digital marketing for franchises has increased.

Here’s how to harness its power of influence, amplify foot traffic and solidify brand loyalty:

1. Recruit digital natives and early adopters

As much as you’re the leader of your franchise network, there are franchisees in your chain you could learn from. The global increase in millennial franchise owners means it is highly likely that you’ll be able to identify early digital adopters within your franchise network.

“The best people to learn from are those who have been in your shoes before,” says Matt Forman of the Franchise Centre at Griffith University.

“Encourage and support their efforts and use them as case studies to demonstrate to the rest of your franchisees the value of digital marketing, and how to do it right.”

2. Invest in training your team

“Each digital competency level requires more education and resources in order to integrate digital marketing with your physical stores,” says Forman. For this reason, regularly investing in continuous training for your team so as to ensure they keep abreast of any new and emerging trends.

Proactivity and adapting to the constantly evolving digital landscape led KFC to open a LinkedIn account for its founder and mascot Colonel Sanders. KFC’s out of the box tactic is a fresh approach to what has long been considered a B2B platform, under-utilised as a B2C platform.

3. Apply custom targeting techniques

The discovery of new and small businesses is being fuelled by Google searches, social media and online reviews, making these platforms a goldmine of invaluable tools.

Leveraging certain custom targeting techniques like easily searchable keywords and exposure on other reputable and high-traffic websites, gives your franchise’s digital marketing efforts a boost. This results in an effective campaign, favourable reviews and meaningful and lasting interactions with consumers “whether it’s a reply to a Facebook comment or a retweet,” says Entrepreneur’s Emily Conklin.

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Franchisee Advice

How To Hire Skilled Workers For Your Franchise

Your staff run your business – you just have to show them how. This is why employing the best people for the job is essential.

Diana Albertyn

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According to the Franchise Association of South Africa (FASA) 2017 Franchisor Survey, one of the main challenges facing franchisees is finding the right staff.

“Staffing your franchise can be one of the most challenging parts of running a successful business. Without a great team of employees, you cannot run your business effectively,” says Saxon Marsden-Huggins, founder of WebRover.

These three tips could help you find the best employees for your franchise outlet:

1. Don’t hire in haste

While you may be rearing to go and keen to fill gaps to speed up profitability, research your candidates thoroughly.

Related: Insights On Recruitment That Could Affect Franchise Performance

As the job applications keep flowing into your inbox, keep in mind that not all of them qualify for the positions available – it may even be a small percent who are actually viable candidates. This is why your hiring process should include:

  • Taking the time to thoroughly screen CVs to develop a short list
  • Creating a carefully crafted list of interview questions
  • Setting aside adequate time for thorough interviews
  • Getting to know the candidates through a second round of interviews to confirm your choice.

Giving the hiring process dedication and attention will ensure you get the cream of the crop, contributing to the long-term success of your franchise.

2. Demonstrate support in the workplace

While you can instil the necessary skills into new recruits, it’s difficult to train for culture. This is why choosing the right employees from the beginning will make the rest of your franchise management system will run more smoothly.

“The manner by which you run the franchise will influence employee perceptions of the brand as well,” says Hireology’s Erin Borgerson. “Your staff must become ambassadors of your franchise system to attract the target consumer market.”

The best way to do this is encouraging staff to give you their honest feedback. Your commitment to creating and upholding a positive culture will result in increased loyalty from your current staff and a superior pool of applicants.

Related: 3 Things You Should Consider Before Buying Your First Franchise

3. Offer appealing incentives

When advancement opportunities are clearly communicated, staff is keen to hear how they can get there, as they have career goals of their own. Encouraging this ambition will draw good employees to your franchise.

“Helping employees understand the steps to advancement helps them to view their current job as an important part of a career with an upward path, not just a pay cheque for this week,” say financial reporting technology experts at Qvinci.

Performance bonuses and employee benefits incentivise staff’s efforts, therefore increasing their income alongside the profit of the business. “This serves to make employees a part of the business and not merely people ‘who work there’,” they explain.

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Franchisee Advice

3 Ways Communication Helps You Run Your Franchise Better

Managing your business as an independent owner may have been challenging at the beginning, but – as you’ve come to realise – the successful operation of a franchise network requires an extended set of skills.

Diana Albertyn

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“When it comes to a multi-location business such as a franchise, effective communication is vital,” says Dani Peleva, Managing Director at online marketing agency Local Fame. “So what happens when you’re struggling to connect with the franchise network you have in place?”

It may be time to upgrade your franchise management skills, because the success of your franchise network has a direct correlation to how you integrate feedback systems into your management processes.

Have a clear comprehension of the challenges your franchise encounters, keep an open chain of communication between yourself, franchisees and managers, and maintain regular interactions between everyone in the network. These are some of the most crucial aspects of successful franchise management:

1. Understand the challenges you face

A thorough understanding of your business requires dedication to regular and consistent groundwork for first-hand experience on how the day-to-day operations of the business are conducted.

Related: 3 Core Strategies For Building Successful Franchise Organisations

“Seeing and talking to the people that make your business will help you understand the challenges that franchisees face and the systems they need to drive higher profitability and growth,” says Rosie Niblock, Marketing and Communications Manager at Proactive Marketing.

“That way you can work more effectively to make improvements to franchise management systems logically and within the financial grasp of all franchisees.”

2. Get personal through regular visits

You never want your franchises to feel neglected. It’ll demoralise them and possibly drop sales, profits and their ability to keep the business running as you intended. Maintaining regular contact and sharing as much information as possible – when you can – fosters strong relations with your franchisees.

Empowerment through information and communication makes a difference in the business and helps franchisees make decisions in favour of the business and to make sure that they all pull in the same direction in terms of customer satisfaction, says Alan van der Westhuizen, executive manager of new business sales at Fournews, a 20-year-old franchise holding company for News Café, Krispy Kreme, Moyo, Brooklyn Brothers, Smooch, Cafe Fino and Go! outlets.

Ensure your response to these concerns is swift. “If not discussed they could fester ad create undesirable rumours,” says Niblock.

Related: How To Write An Operations Manual For Your Franchise

3. Create events for network collaboration

One of the most important aspects of managing your franchise is meeting with all your franchisees, at least annually. “Franchise conventions are almost certainly the biggest tool when it comes to building profitable engagement,” says Peleva. “They’re one of the most important things to focus on when you’re considering how to lead your franchise network.” According to her, a successfully attended and executed convention will let you:

  • Boost your network-wide productivity
  • Hugely increase your profitability
  • Drive passion for your brand

Communicating with your franchisees is the best way to identify problems, work towards solving them, and building a pleasant and fruitful relationship with your owners.

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