Franchising is: Teaching a New Dog Old Tricks
Published 2017-05-29

“We want to open big and stay big.” So says Tom Lewison, CEO of Wild Wing Cafe, a restaurant chain in the south and southeastern United States, expanding into Canada.

His sentiments are echoed by the CEO of Teriyaki Madness, an Asian-food concept restaurant chain in North America.

Franchisors and senior executive management are asking themselves: “What would keep this momentum going and what kinds of support do we need to put in place to ensure consistent business growth?

In a strategic move, and in response to double digit same store sales increases for the last six of the seven years that the franchise brand has been in existence, a new team has been put into place that would support new franchisees extensively, as well as “coach” mature owners in similar ways.

It’s important to note here that this increase and improvement with executive field operators was in response to successful numbers, not flagging ones.

The executive team put together for this undertaking has, collectively as well as individuals, long tenures of experience within the franchising model, and the food and beverage model specifically.

Their focus and highly personalized program includes the initial, expected close training, as well as quarterly reviews and check-ins for business goals and daily operations alike.

“The Teriyaki Madness corporate support team is extremely knowledgeable and well-versed in the fast-casual dining industry, and they provided me with the highest quality training and operational direction I needed to get my business off the ground…From the initial business review to the continuous check-in process, I was given encouraging and positive feedback on how to go above and beyond to be successful in my community.”

— Kevin Gordon, owner of Teriyaki Madness of Indianapolis

It’s the standard for new franchisees: unprecedented support, in-store, hands-on, close-contact interaction and training at the launch of the business and, in quite a few cases, a presence of field operators for the first 30 to 60 days. But, what about the flip-side: mature franchisees, often multi-unit operators, who have proven their effectiveness and have gained deep experience in the brand’s “secret sauce”?

That’s exactly what a study by the Franchise Relationships Institute (FRI) measured: the operations of franchisees at a mature stage in their lifecycle (more than 6 years).

Greg Nathan, founder of FRI, says that their 1,000 franchisee-strong survey concluded that, “These people primarily want to be consulted and listened to when important strategic decisions are being taken by the franchisor, and to have their experience respected.”

With new franchisees, the “danger”, so to speak, is clear: inexperience with the brand’s operations, its main offering, culture, and competitive edge. But remember that, ideally, these individuals have been thoroughly vetted so they are already armed with deep business knowledge and experience. At this point, it’s simply a matter of how robust that initial on-boarding, launch and training process is for the “zees” (aka, the franchisees), and the in-store employees they hire. Even better is if the franchise support staff and management team can build into the “support program” periodic check-ins and, of course, on-going training for in-store operators.

The dangers, then, are much more apparent as well: a drop-off in support, an initial rise in profits as the novelty factor kicks in on launch, and then wears out, a “break-even” first year and a possible higher turnover of in-store employees, as franchisees find the right hires. For mature franchisees, the issue is that “plateau” that they arrive at: it can be a mixture of complacency and just plain skepticism towards new initiatives that flow from head office, each time there’s a change in or addition to the senior management team.

What the emerging “zees” need

An excellent support strategy created by an experienced executive field support team and administered by dedicated field support management is just part and parcel of the franchisor-franchisee agreement.

But what about going above and beyond, ensuring that you’re in it for the long-haul?

Break up the on-boarding & training process

Many new franchisees get antsy with stretched-out, weeks-long on-boarding and training processes.

Instead, consider overhauling your brand’s training process by breaking up the modules into online and on-location components. It’s a strategy that is working well with franchises like Bottle & Bottega, an art-making and wine-tasting novelty business.

Even if franchisees need to get certification before even they can start in-store operations and training, franchisors can start off right away with the administrative and “business setup” elements of franchising. This can include registering the company, purchasing equipment, creating a business plan, setting up a bank account, amongst other “smaller” (but no less important!) details.

This also means that you get to capitalize on that “beginner’s momentum” that so many franchisees feel and then channel into their business. Capturing franchisees at this moment in the right way is so crucial because they’re bound to hit that pesky Sigmoid Curve.

Franchisors should also allow include in-store, side-by-side shadowing or training, as part of on-location on-boarding. This means that, once franchisees have completed online modules, they can head to corporate headquarters for their in-person training, which should include visits to actual locations — which are run by mature franchisees (who can even be multi-unit owners).

Make use of tech to communicate

Be it in the beginning or as part of the initial inception of the business, you as a franchisor should be supporting compliance, not demanding it.

Part of “being in it for long-haul” is giving your franchisees the support they need, even if there are no field managers present or support staff who are physically checking into the location.

So how do you administer from afar? Technology.

Make liberal use of apps like Calendly to schedule weekly phone meetings and check-ins.

Set up and schedule webinars using Zoom or GoToMeeting, for smaller updates, trainings on new offerings, and on-going updates to marketing initiatives.

Record quick videos for new additions to Operations Manuals (because, honestly, you don’t need to re-invent the wheel each time) and share across a franchise intranet platform. Besides using these pieces of technology as walk-throughs during initial set-up, franchisors can keep their costs low while ensuring compliance is at an all time high if they harness technology to communicate.

And, lastly, keep all these resources as recordings, part of a wider knowledge base, accessible over a cloud-based intranet for easy communication as well as know-how.

Implement in-store opportunities for feedback

You can’t hit a moving target.

On-going support is only as useful as the actual, lived, felt experiences and issues that crop-up in-store. Check-ins and reviews, after all, must be based on reviewing empirical situations — “this is what happened” rather than “this is what should happen”.

Performing mystery shopper checks and welcoming customer and client feedback, actively soliciting their participation through promotions, surveys and social media channels like Yelp and Facebook Pages, will give franchisees relevant data and opportunities to fine-tune their response time as well as content of addressing these issues as well.

Questions to consider including:

  • Are customers consistently provided the right mix of products with tailored and knowledgeable customer service?
  • Are products displayed in a manner that encourages pair-purchasing (selling two complementary or accompanying products) or upselling?
  • Would you see the same in-store format if you went to every location, in the weekend or during evenings when management is not present? (in other words, are employees empowered to operate autonomously?)

Use checklists as rewards, not hammers

Another useful initiative that should be an integral part of providing relevant feedback and highlight spaces for improvement (read: opportunities for growth!) is a quality assurance checklist.

These checklists are not about sales targets or business profits. They don’t remark upon the strategic business plan. Rather, they are all about compliance and consistency — both of which are integral aspects to the customer experience. Checklists can include conventional aspects to franchise operations like safety procedures, sanitation and cleanliness standards, checking consistency around open and closing duties and maintaining a uniform store format.

No matter what these checklists yield — that is to say, whether you, as a franchisor, can conclude that franchisees are complying or if you realize that there are holes in know-how or gaps in meeting these set standards — use any scoring system you set up as an opportunity to earn “rewards”, rather than using the data to come down hard on your franchisees.

This could look like the accumulation of points or scores earned from these checklists to win an award at end-of-year meetings. While the relationship between franchisor and franchisee can, technically, be hierarchical, the intrapersonal interactions have to be empathetic and human-based. After all, being in it for the long-haul means forging a relationship that is positive.

It’s not simply about hitting sales targets or consistently achieving high QA scores. It’s also the “soft” aspects: consistently earning positive customer feedback, expanding into multi-units, retaining their in-store employees, executing on marketing campaigns — from physical setup of materials to active promotion upon point-of-sale.

Of course, none of this is ever possible for a franchisee without the franchisor’s strategic system in place so they can refer back to a knowledge base as well as communicate back with HQ on issues — whether big or small.

Regular revisits

Wait — aren’t revisits part of the support strategy for emerging franchisees? Mature franchisees are “mature” because their operations run like a well-oiled machine…right? Ah, but we’re speaking of a revisit like a trip down memory lane: support operations staff should focus on revisiting the motivations and goals of mature franchisees. Engaging them in an evolving conversation, at periodic intervals, of what they’re enjoying in the day-to-day operations of the business is par for the course.

But don’t be afraid to encourage them to elaborate on the broader goings-on of their personal lives, especially as it touches upon the operations of the business. While the role of the franchise in this conversation is to listen, it is also to thoughtfully collect that information and make suggestions.

In a way, you’re “coaching” your mature franchisees the way a sports coach would push their top athletes to dig deeper.

Treat their knowledge & expertise like the goldmine it is

The number one thing that mature franchisees say irks them, according to studies conducted by FRI, is that their expertise is not sought after in the way that it should. This definitely leads to mature franchisees viewing new initiatives rolled out by executive field management with skepticism. Part of that skepticism is the fact that no one has maintained a communicative relationship with them.

But the other aspect to that is, sometimes, a new initiative or standard can be completely disconnected from the reality of operations. Or else, though it is successful for the most part, the initiative fails to take into account a key detail that is prone to trip it up in a big way — where otherwise it might have worked.

In other words, it might have been 100% effective rather than simply 90% effective, had mature franchisees been consulted. To address this, Greg Nathan, founder of FRI suggests that franchisors, “[s]eek the views of your seasoned franchisees and include them on expert panels, in task forces and when pilot testing new initiatives.”

Keep them learning to keep them growing

Sometimes, new challenges can come in the simple form of new learning opportunities. Mature franchisees face an ever-evolving daily workday, that is true. But the larger structure of daily operations mostly works out. Past the details, it may be time for the mature franchisee to push into new territory. In this case, those conversations or “revisits” can help a mature franchisee set new goals for learning and growth.

It’s all about engaging them as individuals while giving them opportunities to learn new techniques that will benefit the business. This can be initiatives rolled out by corporate HQ but it can also be strategic partnerships with complementary industries such as scheduled tours, sponsored participation in conferences or speaking opportunities. It can also involve ongoing mentorship from senior executives.

Franchise support tactics for every stage

Now that we’ve spent some time elucidating the motivations and psychological make-up of emerging versus mature franchisees, it’s time to bring them together. At the end of the day, there are certain experiences that both sets of franchisees will have to face. And it’s up to you, as a franchisor, to make sure you’re entering the relationship with the right mindset as well as strategies.

Here are 5 important support tactics that should underpin every interaction, initiative or coaching opportunity.

Divide & conquer

Remember our recommendations for a segmented training and on-boarding process? An online component that complements on-site training as well as in-store shadowing is a neat way to respond to the learning cycle as well as initial momentum. But franchisors would also do well to consider whether they should be offering regional support rather than centralized leadership.

Either because their brand has expanded — in complexity (of operations or offers), size or location — or because they’ve re-written their level of commitment to support initiatives, regionalized support might be a useful response for multiple units moving in unison.

There are perks that are cost-based as well as operations-based: regional support staff are focused singularly on their areas of support. They’re not distracted by other HQ goings-on. They can maintain constant and a more immediate contact. Franchisors can expect lower travel costs and give franchisors a sense of visibility. But there are cons, too, and these center around the capability of corporate leadership: can corporate leadership bring together the unique combination of people in leadership positions, communication techniques and strategies to maintain a consistent connection with a proposed regional support system?

Remember that these are models and choosing to use them or not should take stock of where you are as well as where you hope to grow. It is, then, an internal evaluation.

Answer this question

What’s in it for me?

That’s it.

That’s the question that rests just below every introduction of a new initiative, on-going training, new piece of equipment or new marketing campaigns.

To support franchisees in consistent and positive growth, franchisors should be able to begin with the answer to the question “why?” Why are these changes being implemented? Hint: the response should include addressing what benefits the franchisee can expect to earn.

This allows them to feel empowered to make the change rather than dictated or forced to comply. Examining “what’s in it for me” in a way that articulate clear benefits to the franchisee also allows them to gain trust in the change itself, not just your relationship with them.

It’s as though they are a part of the process.

Working on your business is just as important as working in it

Based on what your business is, where in its stage of evolution the overall company brand is and where you hope to grow, you should be allocating your time and splitting it between reviews of marketing sales, operational compliance and the status of profits.

Reviewing these aspects regularly allows franchisors to form relationships but also to control the progression of the brand. Typically, franchisors focus 50% of their time on sales while profits and operations are evenly split at 25% each.

Get your hands dirty

It’s a fact of leadership: your willingness to get your hands dirty and come to the “level” of your franchisee, operating in-store or imparting your advice in “coaching” sessions, can help them feel as though you empathize with them. It allows franchisees to see that there’s no job that’s “too small” when you’re running a business and that, even as corporate leadership, you’re just as connected with the operations of the business today as ever.

The unexpected benefit that comes around from this willingness, however, is that the franchisor actually ends up learning a lot from his or her franchisee, underscoring the truth that the relationship is symbiotic and mutually-beneficial — always, when done “right”.

Always be data-driven

Being “data-driven” means that you allow your numbers to determine what issues you’re going to address, where you’re going to grow next and what strategies you’re going to use when supporting franchisees. It’s not simply that the numbers don’t lie. The level of transparency and “stake” that franchisees have in the business model and successful daily operations is likely to grow if they have access to proper reporting tools and the numbers for their unit.

For you as a franchisor, it’s important to have a system that allows role-based access to these reports and numbers — by unit and by position. You should be sending out reports that accompany the new“strategies” that you’re focusing on — thereby giving franchisees their “why”.

You can choose to post top-sales performers as a way to encourage specific units, if there are “flagging” units. If costs are an issue, consider posting metrics about units who have been most effective on cost control, showing your other franchisees that it can be done!

If you’re operating on a cloud-based intranet,don’t be afraid to show the results of marketing campaigns that simply didn’t pan out versus ones that have been very successful in bringing in incremental sales. Compare these to numbers from the previous year, when neither campaigns were running.

Data is a powerful driver so use it wisely.

Remember that franchising is all about setting up a tried-and-true, well-established system and distributing the rights to reap from the specifics of the system itself as well as the larger idea — the fact that the “guesswork” is taken out of the equation for franchisees. Without the secret sauce of the franchise, the franchisee would not be able to experience the initial bump, security and protection they do when they run a business under a well-known brand.

It’s teaching old tricks of the trade to “new” dogs and re-engaging the old dogs, so they all move towards becoming your “top dogs”.

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