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What does it take to build a hugely successful franchise business?

Posted on 9th November 2018 at 6:48pm by Carl Reader in Business, Franchise, General

Google “how to get rich” or “how to build a successful business”, and you’ll see a wealth of thoughts and opinions of all shapes, sizes and styles. There is no one secret key to building a successful franchise business, but I work with franchisors and franchisees every day, and I can tell you what I know.

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When starting a franchise, you are 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 are 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?

First things first – it’s all about the people. 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’s success.

Every franchisor faces a tricky situation however, in that there is 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 they hold the responsibility for managing their own team. In fact, the potential for franchisors to overstep the mark in this respect has been highlighted by the Joint Employment disputes in the US. 

Whilst 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 that the people coming on board are people who will add to the business.

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More importantly, it is essential for the franchisor to set a very firm culture across the organisation. Some of you will know that a franchise consists of four things - three items which are fairly tangible (the legal agreement, the operations manual and the licence to use the brand and trademarks), together with the largely unspoken matter of “the way we do things”. So how can a franchisor help ensure that staff are trained, motivated and managed in a way to maintain the brand ethos? Here are my top tips:

Prioritise making sure that your franchisees are trained, motivated and managed. 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 that 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 will also allow you to identify any worrying trends before they jeopardise your brand.

You can have the very best training and systems but it’s unlikely to actually be implemented unless you have a strong culture amongst 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 fully buy into them and get them truly established in the business. 

Once your head office is aligned with these, you are in a good position to set the culture across the network. There is 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 very top – so make sure you’re fully on board with it.

Next, make sure you spread the love across the network. It’s all well and good having a great culture at head office, but you need to make sure that 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 - but they also help franchisees feel a sense of inclusion.

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Make great use of events, to your advantage. Another way of increasing franchisee engagement is to run a series of regional events, together with a landmark annual conference. Whilst these are focused on the franchisees; you will help ensure that 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. You should make sure that 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 for your franchisees.

Be aware of change, but make sure you’re still true to your values. 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. Whilst it is impossible for head office to train every individual new employee in a large network, you can always find ways to provide centralised training. Consider whether there is the option to run regional workshops for the employees in a certain area, so that they can meet representatives from the head office team and hear things “from the horse’s mouth”. 

Also, look at whether you can provide any e-learning for the employees of your franchisees. If done properly, your franchisees, their teams, and your brand should all benefit from these initiatives. Effective, consistent training that is in line with core company values, even through changes, is vital to a successful franchise.

Finally, just a word of warning! Don’t be the “Undercover Boss”. Some of you might have seen the Undercover Boss TV show. Usually, it shows a CEO of an organisation pretending to be a new worker - and more often than not they find things that they would have never have expected to see. 

If you are in a position where you could go into your franchisees’ branches unannounced and not be noticed, there is a real problem with the connection between head office and the individual units, which can only lead to dilution of culture and standards. Don’t be the unintentional undercover boss!


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