Five Keys to Being a Top-Performing Franchise System

What are the keys to being a top-performing franchise system? We have to remember that first and foremost, franchising is a business model and regardless of the product being sold – a restaurant, a fitness center, etc. – certain principles and practices create a top-performing franchise and bring success.

 

Key Number One: Everyone Plays a Team Game

There is a temptation in franchising for everyone to look at themselves and everyone in the enterprise as separate and not part of a team. There is in fact separate ownership in a franchise, but every success is tied to every franchisee being part of a team. 

Yet it is easy for every franchisee to see him or herself as independent and feel, “I’m going to do my own thing if I want in my business, and so is everyone else.” When you allow that to happen, your franchise becomes like a boat where everyone has different oars and are all rowing in different directions. Franchisors many times don’t realize how important it is that everyone in the system is playing like a team and following the vision of the brand. When franchisors mistakenly think this is happening without their involvement, their actions create a culture of appeasement. They fail to provide a necessary vision and get everyone to support it.

If franchise owners start to have thoughts like, “I don’t want to participate in this franchise-wide initiative or system,” it hurts everybody and holds the entire franchise system back so it cannot move forward. 

This is a cultural issue, If your system does not embrace a team culture, your entire system needs to recalibrate, build trust, develop a shared clear vision, educate everyone, and create a new culture.

 

Key Number Two: Put the Customer First

It is a mistake for any franchise company to focus only on what pleases its franchisees instead of the customers. When a franchise company makes this mistake, mediocrity usually follows quickly.

When you’re only trying to please and appease franchisees, you are not going to drive much business. So be sure to consistently ask, “What does the customer want and how are we delivering it to them?” The franchise system needs to be a leader and an innovator, and that can only happen when you put the customer first.

This connects back to Key Number One, Everyone Plays a Team Game. If you can get all your franchisees to engage in an ongoing process/game of inventing new ways to serve your customers, you will have taken another big step toward success.

 

Key Number Three: Make Sure Franchisees Are Profitable

You cannot have a successful franchise system if the franchisees are not making money. When they aren’t, your business is not sustainable. Franchisees will be unable to grow and will be unhappy, and many will go out of business. And unprofitable franchisees exert a damaging impact on franchise sales. 

So your business model must focus on the franchisee being profitable. This comes first. And remember that when franchisees are profitable, it’s much easier for them to play as a team and to focus on the customer. If profitable, franchisees can afford to invest in their business, remodel and innovate as needed. But if they are not making money, there are no funds to invest in improvement.

 

Key Number Four: Remember that You Are a Training Company

“In the long run, the only sustainable source of competitive advantage is your organization’s ability to learn faster than its competition,” Peter Senge writes in his book The Fifth Discipline: The Art and Practice of the Learning Organization.

Unfortunately, many franchise systems do not focus on training. They create training, but they don’t live and breathe as a training company. They do just enough training to assure that franchisees are not unhappy. In part, this is caused by the fact that when a franchise is still small, it’s easy for management to educate the system on culture and how to be effective. But when the system gets larger, it outgrows the ability to effectively train via management interaction. The initial training franchisees received gets lost with turnover of staff. 

A franchise organization needs to constantly be training. To execute a successful business model, everyone needs to know what their role is and how to execute it. And that means training people who work in franchise management, training franchisees, and training all employees. As it is the role of the franchisee to train their employees, the franchisee management needs to be trained on how to effectively train their team and must be provided the tools to do so. 

Another critical aspect of your training should be to explain the rules you have in place for owning and operating one of your franchises. In other words, don’t simply make rules and require people to follow them. In your training, explain the logic behind your rules. If franchisees can only sell certain products or use your franchise’s approved systems to provide service to customers, explain why in your training. If you require franchisees to use your marketing programs, explain them and explain why.

If franchisees start to run their franchises without regard to rules, chaos will quickly undermine your franchise’s success. And great training is the way to prevent that.

 

Key Number Five: Create a Culture of Listening

Everybody in the system should be listening. Listening goes in all directions and it should be a core priority that you emphasize in everything you do. Franchise system management is listening to franchisees and customers. Franchisees are listening to their franchisor and  consumers and are meeting their demands. They are also listening to their employees. 

So stress the value and the practice of listening in your training and in your regular communications with everyone in your organization. The result will be that more people will understand more of what is taking place in your whole, holistic franchise system. And what a positive and profit-building thing that will be. 

 

 

 

As author, speaker and entrepreneur, Evan Hackel has been instrumental in launching more than 20 businesses and has managed a portfolio of brands with systemwide sales of more than $5 billion. He is the creator of Ingaged Leadership, is author of the book Ingaging Leadership Meets the Younger Generation and is a thought leader in the fields of leadership and success.

 Evan is the CEO of Ingage Consulting, Delta Payment Systems, and an advisor to Tortal Training. Reach Evan at [email protected], 781-820 7609 or visit www.evanhackelspeaks.com