Why Franchisors Should Visit their Franchisees’ Operations

As I have mentioned in many of my posts and articles in the past, communication is one of the key elements to building great Franchisor/Franchisee relationships. I have also written about the importance of building trust in the Franchisor/Franchisee relationship. When Franchisors visit Franchisees’ operations, they have an opportunity to build trust and strengthen communication, and this should happen often.

When the Franchisor makes visits to their Franchisees, there should be a very deliberate agenda set out so that the most can be made of their time together. As most Franchisors do not get the opportunity to visit their Franchisees as much as they would like, Franchisors should make sure to get the most out of the time they do get with their Franchisees. Also, Franchisees will want to make the most of the time they get to spend with the representative from the Franchisor.

One of the first questions I am often asked by Franchisors is: “Who should do the onsite visits?” Well this depends; I always suggest it be a person who has some decision-making power at the Head Office of the Franchisor. If the Franchisee is going to take 4 or 8 hours of their time to meet with someone from the Franchisor, they want to make sure that their time will be a good investment. No, this does not mean it has to be the President. What I am saying here is: It must be a person who can make change or effectively help to steer change at the Franchisor level. So if the person who will be making the onsite visits does this as part of their job, then the Franchisor will need to build this person and the position in a way that creates confidence with the Franchisees that the visit will be worth their time.

The second question is: “What should we accomplish during our onsite visits?” Now there is no fast way to answer this, but there are many items I would like to share to start the process. There are five functions I suggest you try to accomplish during your onsite visits.

         1. Align Yourselves – Spend some time aligning the Franchisor’s goals and vision, while trying to understand what the Franchisee’s goals and vision are also. Then work to make sure the goals and visions can align with each other. Without doing this, the Franchisor and the Franchisee can never work together as a team. I don’t think I have to explain the importance of team work in the Franchisor/Franchisee relationship.

The important thing is that the Franchisee feels like they are a part of the system and that what they are working towards is important to the Franchisor. It is true that the Franchisee must follow the systems of the Franchisor, but if the Franchisee does not have goals or their own personal vision, they will be lost on a day-to-day basis. However, if the Franchisor can support the Franchisee’s goals and vision while still working within the Franchisor’s systems, the Franchisees will be much stronger.

 

         2. Measure Standards and Performance – It is important for Franchisees to know how they are doing. It is often helpful to let them know how they are doing within a perspective they will understand, like compared to other Franchisees. This can be a helpful tool if you are measuring apples to apples and keep all information confidential.

One example is that you would not necessarily measure the gross sales of a location in Chicago, Illinois, with a location in Boulder Flats, Utah. You may be able to measure the conversation rates of leads for the two locations and come up with a percentage that represents a fair comparison with these two locations. As the markets are so different in these two locations, it still may not be a measurement that is fair or helpful. It is important to make comparisons that will relate well to each other.

Another way to measure is to have targets on which the majority of your Franchisees can agree; we will call this Franchisee Base Lines or FBL™. Then make a matrix of how well the Franchisee ranks against the FBL™ to see if a Franchisee needs improvement or to see if the Franchisor can find out why the Franchisee is excelling in a certain FBL™.

It is also very important to be able to measure a Franchisee’s past performance to show the trending of growth or shrinkage. A key goal for a Franchisor is to always promote growth, and having the Franchisees’ historical data available is an important part of your matrix.

Another important measurement is the success and measurement of the Franchisor. This should be shared with the Franchisee during your onsite visit. The Franchisor can share the strengths and weaknesses of the goals that have been measured. The Franchisor can also ask for input in ways to improve on these items. In my research with Franchisees, I found that most franchisees felt their Franchisors really did not care about their input on the shortcomings of the Franchisor. When information is collected about the Franchisor, it should be put together in a way that the outcome can be shared with the Franchisees. For example, using a survey tool will allow the Franchisor to share the accumulated outcomes of how the Franchisees rate the Franchisor.

 

          3. Know the Market – It is important to know the market of each of your Franchisees. Of course, you will know the basic demographics of the market that is served, but there can be large differences from location to location. For instance, if you are a Private Business College franchise, the difference from a location in Santa Monica, California, and East Los Angeles California, will be great. The demographic of the customer, the demographic of the employee, and the products purchased will in all likelihood be much different. Take a close look at the differences, look to see where a Franchisee may be missing an opportunity or where a Franchisee may be exploiting an opportunity that the Franchisor can learn from.

When the Franchisor representative visits, they should take some time to visit with customers of the Franchisee. Take special note of the customer’s perspective of the Franchisee. Take notes and share this with the Franchisee; usually such feedback will be a very positive part of the day. Also, find out what Franchisees’ perspectives are of the Franchisor. If you ask questions such as, Do you feel the TV advertising is consistent with our product or Do you feel the look such as colors and feel of the location is professional, then you will get a good idea of how the customer views the systems that the Franchisor puts in place. See what can be done to strengthen the relationship between the Franchisee and its customers. Whatever the Franchisor can do to help this relationship will be a huge benefit to the Franchisee.

The real benefit of knowing the market is not only being able to make changes that matter, but also being better able to understand the Franchisee and see what makes them tick. You cannot understand your Franchisee’s needs without first understanding the Franchisee’s customers!

 

           4. Open Mike – This is a great time to let Franchisees air their concerns and ideas. I always recommend this be in the later part of the day, so the Franchisor representative can set a positive feeling throughout the day. If the Franchisor is positive, helpful, and understanding, I have almost always found the Franchisee will be also. However, Franchisors should note that Franchisees have many issues, problems, and concerns: many of which they feel ill-equipped or powerless to fix because the Franchisor holds so much of the power through rules, standards, systems, and perceived and real control.

When the Franchisor truly listens and deals with the Franchisee’s issues, good things will happen. This process can be very liberating for the Franchisees and also for the Franchisor. Not only is it important for the Franchisor to listen, but also to show that you understand and that you will take the information back with you to the Head Office and share it with the appropriate people.

 

           5. Agree on Moving Forward – Often, I find that Franchisors see problems in the Franchisees’ organization, but the Franchisor will not say anything until down the road by letter or email. The Franchisor feels it is safer this way. Well, it might be safer, but not nearly as effective. I suggest you start tackling issues when you see them. Talk about the problem and work on solutions together. Of course, you will have to follow up officially and document serious issues, but don’t leave without some agreement on the issue and even the beginning of an action plan to fix the issue.

At the end of the visit, if both the Franchisor representative and the Franchisee can agree on some of the issues, they will be much simpler to take care of in the future. You will also earn the trust of your Franchisees.

There is another important step to do now: Share with the Franchisee what they are doing right and how you can share that information with other Franchisees. My experience has been that the best form of flattery is asking if you can share the Franchisee’s successes with the entire organization.

If a Franchisor can work on these five key areas when doing site visits, they can maximize their efforts and work towards building the organization at the same time. In future articles, I will talk about attitude of the Franchisor vs. the Franchisee and some pit falls of strong arming Franchisees, even when you do not realize it is happening.

For now, remember the Franchisor/Franchisee relationship is the heart beat of all Franchise organizations, and we should keep those relationships as healthy as possible—just like we would our own hearts.

Steve Whiteside is a consultant specializing in organizational development within franchise organizations and educational organizations. You can contact him at The Franchise Leadership Center, 604-786-5677.