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Franchisors

3 Core Strategies For Building Successful Franchise Organisations

How to attract potential franchisees to invest in your business.

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The most common questions I hear from franchisors are usually related to growth strategy. In other words, what are the core strategies that differentiate the successful from the mediocre?

Strong leadership determines the overall success of the organisation, but how can this be defined or broken down to actionable strategies? People often ask me how we created a franchise growth strategy that enabled us to grow to 150 units in less than three years. This is the secret sauce! When I coach my franchise executive clients, we begin with three core strategies.

As I described in my book, Franchise Bible 8th Edition, The Upside Down Pyramid strategy sets the pace for everything since it is a core belief. This will get the company moving in the right direction and keep the focus strong as franchise owners are added to the community. The Three Decision Lens Philosophy then kicks in to make sure the company stays on track and makes good solid decisions that will benefit the franchisees and the overall growth of the organisation. Lastly, the Franchise Glue creates a strategy for long-term maintenance that inspires aggressive growth and peak performance.

Related: Selling Your First Franchise? Consider These Key Pointers

The following are the core leadership strategies that I identified in Entrepreneur Magazine’s Franchise Bible 8th Edition.

The Upside Down Pyramid

This strategy is a paradigm shift from the common corporate organizational structure. Typically, you see the leader at the top of the pyramid governing over the team members, which trickles down to the employees and eventually the customers.

Franchising is a very unique business model and is very different from a traditional corporation. The primary difference is that the franchise owners are independent business operators, not employees. The Upside Down Pyramid strategy flips that model on its head by placing the leader(s) at the bottom, bearing the weight of the company infrastructure on their shoulders. Franchise owners then are viewed more like the customer and supported accordingly.

The Three Decision Lens

Every decision a franchisor makes has Legal, Practical and Political implications, so these three factors have to be considered whenever a decision is made. Making good decisions is mission critical to the successful growth of a franchise organisation. Many franchisors have stumbled or even failed because of poor decisions that negatively impacted their franchisees.

The Three Decision Lens Philosophy is tool that enables a franchisor to consider the total impact of their choices before the decision is made.

The Franchise Glue

Franchise Glue is everything a franchisor does that sticks the franchisees to them. Ongoing support and training, buying power, technology tools, innovation, events and other programmes and systems that endear the franchise owners to the brand. These are the reasons that franchise owners stay with the brand and have no problem paying ongoing royalties.

Once these three strategies are implemented and the leadership spoke is in place, we can build the remaining spokes which are marketing, operations, finance and technology to head for the “hockey stick” growth of 100 units and beyond.

Related: 3 Ways You Can Innovate And Improve As A Franchisee

Like any other business strategy, the most important factor is your willingness to buy in and execute. The best game plan in the world is useless if it is not put in to action. Building a healthy and thriving franchise organisation is much like exercise. Long term and consistent exercise programmes generally lead to a healthy person.

I will be posting a series of articles that will break these three strategies down in more detail including real world examples and tips for implementation. This will allow you and your team to focus on one strategy at a time and work on implementation steps. Stay tuned over the next several weeks and try working these strategies in to your franchise business model and see how it impacts your franchise community.

This article was originally posted here on Entrepreneur.com.

Rick Grossman is a leading franchise industry expert with over 20 years of experience in helping both franchisors and franchisees grow their businesses. A successful franchisor himself, Rick developed a high tech/high touch franchise marketing and sales system selling hundreds of franchises in North America capturing ranking in Entrepreneur magazine’s Top 500 franchises in less than three years.

Franchisors

3 Employment Best Practices To Apply In Your Franchise

Brand new to franchising? As a first-time franchisee, you may need some guidance on managing your recruitment processes within your business.

Diana Albertyn

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You’ve just hired your first few employees. Congratulations. As an owner-operator who is also new to business ownership, navigating the human resources aspect of your franchise may be daunting, especially when growth is imminent. Your franchisor offers support, but may not want to play a huge role in recruiting and managing your staff.

“Employee management and HR compliance is a tricky topic, especially with the relationship between franchisors and franchisees. Depending on what HR support the franchisor can and cannot provide, the franchisee may be on their own in this all-important area.” – Dean Haller, President and founder of HRSentry

This, however, doesn’t mean you’ll have to blindly search your way through human resources practices, hoping you’ll eventually get it right. Invest a little time into learning the basics, and you’ll make the best decisions until you can afford to hire an HR specialist – and pick up some expertise along the way.

1. Equip newcomers with the tools for success

Consider the type of information, tools and training your new recruits may need to function productively in their new work environment – and ensure they get it. “Studies indicate that most new employees decide whether to stay or leave a company within the first six months, so be sure to be welcoming early on to help them feel part of your team,” advises Haller.

Related: Why Your Franchise Brand Should Be Culturally Relevant

“If you’re thoughtful of your employees’ new experience, they will become more productive and engaged, and thus, more likely to stay.”

Remember the first time you went through the manuals while familiarising yourself with the franchise concept? A new employees’ experience is similar as they have to take in a lot of new information while acquainting themselves with their new workspace, colleagues and systems. Make the on-boarding easier, by reasonably introducing each aspect during orientation and training.

2. Remain stern on performance standards

Once both parties are satisfied with the training and support offered, new staff should be made aware of expectations and receive continuous and constructive feedback on their performance based on these.

Should employees fail to meet their KPIs, it’s important you’re able to identify if your best efforts have failed and whether termination is an option. “Don’t procrastinate. Make sure all performance-related reasons are documented clearly,” says Haller. “Treat the person with dignity and respect –not only because it’s the right thing to do, but because it’s good business practice and can help you avoid any potential legal action against your business in the future.”

You can avoid this situation early on by hiring employees whose CVs not only meet your business’ operational needs, your company culture too.

Related: As Consumers’ Tastes Change Can Your Franchise Keep Up?

3. Acknowledge and reward hard work

During key periods of business growth, it’s easy to overlook good performance. And even when you acknowledge your best employees, sometimes money in the bank isn’t as meaningful as creative tokens of appreciation.

“Get creative,” says Haller. “Provide flexible work schedules, interesting assignments, or a gift certificate to a great restaurant or spa. Be mindful that it’s costly to replace a good employee, so reward your employees with some kind of benefits if you can,” he adds.

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Franchisors

Why Your Franchise Brand Should Be Culturally Relevant

Are you going to wait for consumer pressure to redirect your marketing efforts, or is your franchise going to make customers believe you care about what they care about?

Diana Albertyn

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Do you understand how consumers feel about the ads you broadcast on the many media platforms they use every day? Research by Nielsen shows that all the marketing you’re paying so much for is least trusted by the buyers you’re aiming to hook. Why? Because how can you sell to a customer whose ideals you don’t identify with?

“Conversations are such a subtle but powerful tool. They can make or break reputations, brands and policies.” – Serge Vaezi, strategy and creative officer at Ogilvy

As an established franchisor with a loyal customer base, you want to ensure your marketing strategy isn’t talking at clients, but to them. Here’s how you can stop spending money in the wrong place and start measuring the right elements of your campaign:

Customers expect you to be ‘woke’

Whether you realise it or not, your brand is operating within its audience’s cultural context. Consumers are increasingly demanding that brands acknowledge and contribute to this cultural context.

“We are failing to measure the things that matter most for our client,” says Vaezi. “We spend most of the time measuring the things we create, while our colleagues in advertising spend their time measuring the impact of the things they create on consumers.”

Related: Are You On Your Team’s Wavelength?

Rather shift your focus to adapting your offering and message to your customers’ needs, desires and interests.

Watch and learn from your audience

“Listen to your audience, watch what they’re doing, listen to their behaviours, and understand what’s interesting and motivating for them,” advises Vaezi.

The insights gleaned from this exercise can be used as the basis for developing a brief aimed at becoming a part of their world, he says. Remember that the message you’ll be putting out will change as your customers change.

Sorbet, for example, launched a make-up range in early 2018 to complement its existing salon services arm and its skincare and nail products. The franchise partnered with Clicks to launch The Skin Tone Project aimed providing consumers with the most extensive foundation ranges in South Africa.

Your product doesn’t always come first

In the age of experience trumping actual products, you ought to consider developing a value proposition that shifts the focus from your product’s features and benefits, and “instead develop a narrative and positioning that acknowledges and contributes to the culture, or perhaps even resolves specific cultural tensions,” says Vaezi. “In other words, stand up for something that people consider meaningful and which is also aligned to the brand’s essence.”

Related: What To Know About Franchising Your Business

This is the secret sauce to producing creative, culturally relevant campaigns that connect with influencers and leaders, while leveraging cultural values and ideologies.

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Franchisors

Are You On Your Team’s Wavelength?

Success means being a team player as well as a team leader.

Richard Mukheibir

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Remember that old interview question, “Are you a team player?” When you run your own business you are the team leader – the captain and the coach rolled into one usually. But on top of that, you also need to be a team player.

That means more than squeezing into your bulging To Do list automated, one-size-fits-all birthday messages or the occasionally staff party. Yes, staff lunch out, a braai at the office or a few drinks after work are good ways to put the work stresses aside and get to know your staff better.

Those basic bonding exercises are taken for granted now. In reality, any wow factor was fleeting in the first place. The days since the automatic birthday greeting impressed any employee are at least one generation back and Victorian industrialists had extensive staff entertainment programmes.

What never goes out of fashion, though, is proving to staff that you are an active part of the team, not just a figurehead. I have now been with Cash Converters for almost 25 years and nearly every day, I say a thank you for the fact that I learned the business from the ground floor up by launching our first pilot franchise.

Related: 11 SA Entrepreneurs on What They’ve Learnt About Managing Staff

That quarter-century of experience has shown me that leading a team proactively means you need to be:

Present

This is more than rushing through the shop floor late for your next meeting and focused far away from the employees you are passing by. It is more than just being spotted in the hallway between your office and the carpark or even waving or nodding a greeting to an employee.

In the know

Taking the easy route here is initiating a conversation about the latest sports scores. More personalised is to ask how a staff member’s house move has gone or a child is settling into a new school. It is good for you to be reminded why your employee works for you and for your employee to know that you are aware of him or her having a life beyond a work role.

Human

humanising-conceptsThe time-and-motion pioneers who emerged after the Second World War to translate regimented army mentalities into greater industrial efficiency and productivity have long since been discredited. It rapidly became obvious that workers object to being treated like different parts of a machine.

Related: How To Know If You’re Mismanaging Your Staff

Respectful

Staff want to be treated like the human beings they are by someone who has the courage to show their own human side. In your conversations with staff, this also means showing how you are aware of the work they are doing and what they are contributing to your business.

Learning

Staff respect a boss who gives the team motivational talk and then rolls up his or her sleeves to spend some time helping accelerate the push to a new goal. As team leader, ideally you should understand and be able to carry out any job within the team. Some of the tasks might not be your speciality but keeping up to date with new techniques, materials or needs in each area means that you can make better strategic decisions.

Invested

This is about more than the capital, skills and time you have invested in growing the business. It is about sharing key goals as well as daily tasks so that your staff feel they are investing their working lives in a shared project – and so share the insights and inspirations that could be the next important key that makes your business run more smoothly and productively.

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