Franchise Your Business - Power Tips
This section features some Power Tips that we have found to be mission critical in the development of successful franchise organizations.
Just because you can doesn't always mean that you should. This statement addresses the situation where, you as a franchisor, may have the legal right to take action against a franchisee but choose not to. You are building a community of franchise owners. Everything that you do on the corporate level will impact your franchisees in some way. The best method to manage your franchise organization’s decisions is to apply the Three Franchise Decision Lens philosophy (see below figure). Whenever you and your team have to make a decision or apply a new program or system that impacts the franchise community (which is just about anything and everything) Make sure that you are looking directly through the middle lens. This gives you the ability to play out how the decision will impact your organization from the Legal, Practical and Political angles. Legal is mostly defined as any contractual relationships that you have with the franchise owners but may also take on other legal elements or considerations. Political encompasses the community issues and can be summed up as they way the franchise community feels about the franchise leadership. The Practical lens boils down to the actual logistics of carrying out something on a system wide basis. The target in the middle represents the philosophy of considering all angles of each decisions from these three perspectives for the best outcome.
Example: Lets use the scenario of a potential change to your company required equipment list. Legally you have the right to make the change based on your franchise agreement structure so no issues there. Practical implementation proves that it make the most sense to phase this is by having all new owners start with the new equipment and give the existing owners a ramp up timeline so not to overwhelm your corporate resources. You decide to set up a franchise owner survey process to gather information to make the best Political choice and find that the franchise owners are in favor but agree that a ramp up period of 18 months makes the best sense.
In the example above you can see that a sudden decision based only on the legal lens could have resulted hardship on the franchisee and backlash for your corporate team.
Upside Down Pyramid Philosophy
The below figure illustrates the total reversal of the common corporate business model. Following this advice simply works best for franchise organizations. A typical corporate structure places the boss (CEO or President) at the top of the pyramid managing the people in the organization.
Franchising works best when you turn the pyramid upside down and carry the weight of the franchise community squarely on the shoulders of the franchise training and support team. With this model the leader (CEO or President) is at the bottom serving and inspiring up to the training and support team and the franchise community, employees and customers (win, win, win and win).
“Franchise glue” is a term that references all of the things, that you as a franchisor, offer the franchisees that “sticks them to you.” In other words, all of the training, support, tools and technologies that help them grow their businesses. You want as much franchise glue as you can offer to make sure that your franchise owners have all the more reason to stick with you. Franchisors that have very little or weak glue find that franchisee fall away more easily. Commit to the following to avoid losing franchise owners:
- Avoid the “what have you done for me lately?” syndrome by always innovating and bringing new money-making ideas and concepts to your franchise owners.
- Start and maintain a company culture based on community that will carry through to the franchise owner’s employees, customers and neighbors.
- Host regular continued education events and webinars to increase the over all success potential of the franchise community.
- Communicate regularly with your franchise owners just to check in to see how they are doing and to see if you can help with anything.
You will also want to continue to innovate and add more franchise glue as you grow to keep adding more value. You never want your franchisees to hesitate when they write their royalty check to question the value they are receiving.
“Franchise Glue” is a philosophy that starts with you as the franchisor and can move through your entire organization. You will benefit from a franchise community that is made up of committed true believers. This culture will inspire your franchisees to do the same on their local levels. Inspired franchisees will cultivate managers and staff members that emulate the core values of the company. This “sticks” the employees to the franchisee resulting in better employee retention and profitability. The employees give superior service to the customers, which “sticks” them to the franchise business as well.
You can emphasize the importance of having a lot of “Franchise Glue” between you as the franchisor and the franchisees, the franchisees and their employees, and the franchisees and their customers with consistent communication of your company beliefs. A lot of glue makes all of these relationships very “sticky” and little or no glue means you may have people leaving as fast as new ones come in.