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Franchisors

The Importance Of Communication

Communicate openly and honestly with your franchisees, and be as concerned with their profitability as you are with your own.

Mark Siebert

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The best franchisors diligently provide their franchisees with frequent, useful communication, which means more than the occasional email, newsletter, or perfunctory visit from their field representative.

Today, it’s all too tempting to rely on the Internet for communication. But depersonalising the franchisor is a big mistake. Time and again, well-intentioned emails or texts ignite firestorms when they’re misinterpreted. Don’t make the mistake of believing an email can be a substitute for human contact.

Relationships are built with dialogue, so it is important to encourage dialogue in every aspect of a relationship with franchisees. Good franchisors are careful to create multiple venues for constructive dialogue. Annual conventions, regional meetings, and advisory and advertising councils all provide for this two-way communication.

To be effective, however, the communication needs to be more than frequent. It needs to be honest. Get caught in a single half-truth, and trust is destroyed.

Finally, to be effective, a franchisor has to genuinely care about the success of its franchisees. Good franchisee relationships start with a franchisor that is, first and foremost, committed to franchisee success. That commitment, more than anything else, needs to permeate the organisation at every level.

Related: Franchise Industry Code Published For Comment

If your franchisees don’t sense a commitment, the relationship can quickly become adversarial. If, on the other hand, franchisees see the franchisor breaking his or her back to help them succeed, there’s almost nothing they won’t do in return.

Here are some recommendations on best practices in franchisee communications:

  • Whenever possible, the franchisor should take calls from franchisees rather than letting the calls go to voicemail.
  • If possible, they should have a dedicated franchise support line.
  • If the franchisor gets a message from a franchisee, they should always respond the same business day.
  • Every day, the franchisor should pick up the phone and call at least one franchisee they haven’t spoken to in a while. Ask how they’re doing, how their family is, and what else your team could be doing to support their business.
  • Franchisors should never speak negatively about franchisees to an employee in the company. Communications relating to franchisees should always be respectful.
  • A technology platform should be used to track all communications (copies of emails, summaries of phone calls) with franchisees. Maintaining a record of all communications will provide valuable information to staff members when they prepare to interact with franchisees, and it will be important, should a dispute ever arise.
  • A franchise operation should appoint one person in the company as the communications manager, and have all system-wide communications filter through that person to ensure consistent tone and accuracy of information.

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Trust, but verify

In many ways, the Internet has been a tremendous boon to franchising. Intranet sites, blogs, chat rooms, emails, e-newsletters, real-time reporting and online training have made communication faster and more frequent. And they’ve unquestionably improved a franchisor’s ability to train and coach franchisees.

Related: Owning A Franchise – Good Idea Or Bad Idea?

But it’s not without its drawbacks. The ubiquitous and sometimes intrusive nature of the Internet can all too easily transform a franchisor into a menacing Big Brother in the eyes of a franchisee. Real-time access to the franchisee’s POS system, remote video, and form-letter emails can substitute for dialogue — and in the process create an ‘us versus them’ environment.

So where’s the middle ground? As we said in the beginning, the key to successful franchise relationships is trust.

The franchisor needs to trust that franchisees are paying all required royalties and properly reporting revenues. As the saying goes: “Trust, but verify.”

It is a question of transparency. If, for example, an operation uses mystery shopping to uncover violations of standards and under-reporting of revenues, franchisees should know about it. Hiding this from franchisees will foster distrust and conflict.

Strong relations will necessitate franchisee respect for the leadership of the franchise. At the same time, franchisees want to be heard. And, in fact, the best franchisors make a point of knowing how their franchisees feel.

As a franchise consultant since 1985, Mark Siebert founded the iFranchise Group, a franchise consulting firm, in 1999. During his career, Mark has personally assisted more than 30 Fortune 1000 companies and over 200 startup franchisors. He regularly conducts workshops and seminars on franchising around the world. For more than a decade, Mark also has been actively involved in assisting U.S. franchisors in expanding abroad. In 2001, he co-founded Franchise Investors Inc., an investment firm specializing in franchise companies. He's on the board of directors of the American Association of Franchisees and Dealers and the board of advisors to Connections for Community Ownership, which encourages minority business and job development through franchising.

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Franchisors

Get Your Franchise Running Smoothly – Even When You’re Not There

Does the thought of taking time off from your franchise outlet make you nervous? Then you have to learn to run your business instead of letting it run you.

Diana Albertyn

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“A sign of a successful business is one that can operate without your physical presence 24/7,” says Brad Sugars, start-up expert, author and founder of ActionCOACH. While your franchise systems and operations are designed to run smoothly and consistently, is your staff trained to be productive in your absence?

“Franchises are already by nature systematised operations, so it boils down to how you as a business owner hire and train people to get the necessary jobs done,” says Sugars.

If you know a sick day will cause havoc in your store, an assessment of how you’re running your business is needed. Are you really running a successful franchise if things fall about without your supervision? Take a step back and consider the following steps to manage your franchise without it controlling your life. Pretty soon you could book that vacation.

Determine your role in the franchise

Are you managing the franchise, taking orders, doing admin and handling every other aspect of the business? Then you’re not hiring the right people, because those roles should be filled by people who can be left to carry them out unsupervised.

Related: How To Write An Operations Manual For Your Franchise

“And if you don’t have the right people for the job then it might be time to start hiring, so you can free up your franchise’s most valuable resource – you,” says Pieter Scholtz, co-Master Licensee for ActionCOACH in Southern Africa.

“You need to get an idea of how you can hire people to take repetitive or administrative tasks away from you. Ask yourself: ‘Do I really need to be doing this?’” says Sugars. Your business cannot run optimally if you’re the single most-knowledgeable and capable person there.

Lead with clarity

You have long-term goals for your business, perhaps even acquiring more locations and running multiple units. While growth is good, you need to share the load and ensure everyone employed in your business is working towards the same goals, otherwise, it’ll be difficult to get there. Sugars suggests asking yourself the following:

  • How will you make your vision a reality?
  • What makes you different from other franchisees and business owners?
  • What kind of team do you want to recruit and create?
  • How does all of this deliver value to your customer?

Conveying your vision can help ensure employees know how to get to the end-goal faster and more efficiently.

Related: 3 Steps To Ensure Your Franchisees Flourish Your Support System

Plan for long-term cash flow

Loyal customers ensure a constant flow of cash through the franchise and this requires exceptional service and the building of strong relationships. “Target your top-spending customers and establish a good relationship with them for long-term cash flow,” Sugars suggests.

Although the broader campaigns are covered by the marketing fee you’re paying to your franchisor, it’s wise to focus on your local’s tastes and suggestions when looking to deliver an experience worth returning for.

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Franchisors

Are Your Employees On Board With Your Franchise’s Brand Promise?

You cannot run a successful franchise if your staff isn’t aligned to the brand’s values.

Diana Albertyn

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Are the people who work in your franchise outlet familiar with the franchise’s brand promise? As a franchisee, you’re required to deliver a uniform experience, so any customer who walks through your door feels like they’re at the same store the franchisor has across multiple locations. If your employees aren’t able to embody the franchise’s brand promise at every interaction, you have a challenge on hand.

“If your company’s brand promise is a warm and friendly atmosphere, you can’t deliver that if your employees aren’t warm and friendly,” says Robin William, Senior Practice Consultant at Gallup.

“Selecting the right employees is essential to providing the right brand service. Hiring people who can’t behave the way the brand wants them to will doom a service initiative.”

Related: How To Write An Operations Manual For Your Franchise

When employees know what’s expected of them, they’re able to keep the promise the franchise makes to customers – leading to higher customer and employee engagement, trust, and revenue.

More than a mission statement

Even if you’ve ensured every one of your staff members know the brand’s mission statement, how can you be sure they’re able to exemplify it in their behaviour every day? William suggests that you do the following:

  • Create structures and mechanisms to consistently instil brand values in the franchise’s culture.
  • Discuss brand behaviours daily.
  • Demonstrate brand behaviours yourself every day.
  • Praise the efforts of individuals who demonstrate brand behaviours.
  • Hold employees accountable for not exhibiting brand behaviours.

Once you’ve clearly defined the right brand behaviours, it’ll be easier to have staff on board who deliver your franchisor’s brand promise.

Internalise the culture

Here’s a conundrum. Do your staff know what to do in a situation where a customer’s request might not be aligned with the brand promise, but the brand promise is always to deliver on customers’ requests? It’s a tricky situation, but if you’ve clearly articulated the promise, your staff will know how to “Behave the brand”, says William.

“Do whatever it takes to deliver on its brand promise. Whether it’s focusing quality, fast service, customer care, or low prices,” he says.

“Employees must execute brand and service behaviours consistently, and frequent reminders can help employees understand and internalise these behaviours.”

Related: 3 Challenges To Establishing A Franchise System And How To Overcome Them

Empower your staff

Investing in your staff is the best way to encourage them to act in line with your brand’s promise. Once they understand why it’s important to act along the lines of your brand, they will feel empowered and motivated to do so.

Starbucks trains employees to memorise customers’ names and preferences in line with their promise of making everyone who visits their stores feel at home. Apple’s strategy of hiring nice, smart people who are passionate about service and the product aligns with the company’s belief that knowledge can be improved, but personality cannot.

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Franchisors

How To Write An Operations Manual For Your Franchise

After establishing that your business is franchise material, ensure you’ve created a clear roadmap to success for your franchisees.

Diana Albertyn

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Documenting the replicability of your business is key to launching a viable franchise operation. Without manuals and instructions on how exactly you carried out your concept to its current level of success, your franchisees won’t accomplish the results you anticipate.

“Unless you can capture your business on paper, you cannot claim to have a business system to sell. Even detailed documentation may not be enough,” says Franchise Direct’s Lorraine Courtney.

“You may need to provide structured education programmes for new franchisees and their staff to teach them your business system.”

With the help of an experienced franchise consultant, you can devise the critical document that contains all the aspects of what make your brand successful.

Related: 3 Challenges To Establishing A Franchise System And How To Overcome Them

Why you need a franchise operations manual

If you’re second-guessing the importance of crafting an operations manual, then you shouldn’t go into franchising. “Your operations manual is your go-to document for deciding who is responsible for what in any franchisor-franchisee relationship,” says Dani Peleva, Managing Director at online marketing agency, Local Fame.

According to Peleva, your manual should generally include each franchisee’s contractual obligations to you as well as the complete details on how you expect them to fulfil these obligations.

“On a basic level, it tells your franchisees what you expect of them. It gives them all the information that you’ve accumulated while operating your franchise,” says Peleva. After familiarising themselves with this manual, franchisees should know how the information can be used to build their own business up to be as successful as the original store.

What an operations manual will do for your business

When all your franchisees know what’s expected from them as they run their respective locations, the entire brand is then able to provide a cohesive, coherent customer experience, which is crucial to your success as a franchisor.

A good manual will also help you build better relationships with your franchisees as they won’t need to constantly contact you to clarify aspects of the business they’re not sure of. If they’re applying the information in the manual, they should know everything you know about how to run this type of business, meaning they’ll make good profits – for you and themselves.

Related: 3 Steps To Ensure Your Franchisees Flourish Your Support System

“One of the steps most potential franchisees make before signing an agreement will be to contact your other franchisees. A strong manual will help your current franchisees return positive feedback,” adds Peleva.

How to decide which elements to include

Obligations detailed in your franchisee agreement will have to correspond with steps on how to achieve them in your franchise manual. As a new franchisor, you cannot be expected to have a manual as thick and wordy as your established counterparts.

Peleva suggests covering aspects such as:

  • How to set up a franchisee location and start trading
  • How daily operations will be conducted
  • How development or expansion will be controlled.

“Your operations manual should always include as much detail as possible regarding operational practices that are to be followed,” says Peleva. “A simple list item that states ‘this obligation must be fulfilled’ is not helpful. Looks always to the ‘how’ of the issue and you’ll cover everything you need to.”

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