Carl Reader reveals the seven key features of a successful franchise business
For many in the franchise industry, the dream is to build a fast growing and profitable franchise. However, a quick online search for ‘how to build a successful business’ reveals a wealth of thoughts and opinions of all shapes, sizes and styles.
There’s no one secret to building a successful franchise business, but there are some common pitfalls. When starting a franchise, you’re starting something more than your conventional business. You’ve already created a successful enterprise, any wrinkles have been ironed out, robust systems are already in place and presumably you’re confident you have a winning formula for what you do.
So how do you take this to the next level and become a successful franchise business?
Every business relies on its people - and in a franchise this is no different. Your franchisees are the ones who maintain your brand’s integrity and ethos on your behalf. And that, in many ways, is key to your franchise business’ success.
Every franchisor faces a tricky situation, however, in that there’s always going to be a level of dilution between them and the troops on the ground.
In a simple, corporately owned business, the head office is directly responsible for the recruitment, training and retention of staff. But this isn’t appropriate for a franchise network, as the franchised units are in business in their own right and as such hold the responsibility for managing their own team.
While franchisors will naturally be hesitant to perform the hiring, paying and firing of employees for all their franchisees, they can certainly set the recommended processes and procedures to make sure the people coming on board will add to the business.
It’s essential for the franchisor to set a firm culture across the organisation. Some of you will know that a franchise consists of four things - three items that are tangible (the legal agreement, operations manual and licence to use the brand and trade marks), together with the largely unspoken matter of ‘the way we do things’.
How can a franchisor help ensure staff are trained, motivated and managed in a way to maintain the brand ethos?
Your franchisees should be both brand and system ambassadors. It might seem obvious, but if you allow your franchisees to do their own thing you’d be very lucky to have a network of franchisees and staff that are pulling in the same direction.
It’s vital to include staff recruitment and retention as part of your initial and ongoing training and to look at how you can manage and support franchisees in this area to make sure the right people are being hired.
One way many corporate franchisors keep an eye on staff morale and motivation is to implement staff engagement surveys. These will highlight the good, the bad and the ugly in your network and allow you to identify any worrying trends before they jeopardise your brand.
You can have the best training and systems, but it’s unlikely to actually be implemented unless you have a strong culture among your head office team.
You need to work on thoroughly understanding your core vision and values and then find a way to get your senior head office team to buy into them and get them truly established in the business.
Once your head office is aligned with these, you’re in a good position to set the culture across the network. There’s no right way to do this - some organisations set these autocratically, while others involve team members at all levels to help in this process.
Be aware that there is no right culture for every organisation and the tone will always be set from the top, so make sure you’re fully on board with it.
It’s all well and good having a great culture at head office, but you need to make sure the culture is shared across the network and all team members.
Focus on increasing touch points with your franchisees and think about how your regional managers can move from checklist tickers to a true support for your franchisees. Initiatives such as franchise councils are a great way of involving your franchisees with the strategy, governance and direction of your brand. They also help franchisees feel a sense of inclusion.
Another way of increasing franchisee engagement is to run a series of regional events, together with an annual conference.
While these are focused on the franchisees, you will help ensure your franchisees are engaged with ‘the way we do things’, which in turn will help them implement your processes and best practice when it comes to staff matters.
Make sure your regional events focus on topical areas, including staff recruitment, motivation and retention. Finally, at your annual conference, look at how you could present awards for staff members of your franchisees’ businesses, as well as your franchisees.
Every business must reflect, change and develop and your franchise is no exception.
With this in mind, make sure staff training is a priority. Where possible, centralise training. While it’s impossible for head office to train every new employee in a large network, you can always find ways to provide centralised training.
Consider whether there’s the option to run regional workshops for employees in a certain area, so they can meet representatives from the head office team. Also, look at whether you can provide e-learning for the employees of your franchisees.
Done properly, your franchisees, their teams and your brand should all benefit from these initiatives. Effective, consistent training that’s in line with core company values, even through changes, is vital to a successful franchise.
Finally, a word of warning: don’t be the ‘Undercover Boss’.
Usually, this TV show features a CEO of an organisation pretending to be a new worker - and more often than not they find things they would have never have expected to see.
If you’re in a position where you could go into your franchisees’ branches unannounced and not be noticed, there’s a problem with the connection between head office and the individual units, which can only lead to dilution of culture and standards.
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