Franchising is a great way to expand your brand and make a bigger geographical footprint. Take note: there’s more to building a successful franchise business than simply handing out a few brand guidelines and letting your franchisees run with it.
The most successful franchises go the extra mile.
Often, franchisees are new to the industry or new to business ownership altogether. With initial fees averaging between $20k and $40k, you want to make sure their investment in your brand pays off — for everyone involved.
Here are a few ways you can be a support system for franchisees and ensure success.
Franchisee common problems
First, let’s look at a few of the challenges franchisees typically face:
- Lack of support and communication. In some scenarios, franchisees are handed brand guidelines and left to their own devices. Like we mentioned above, many are new to the business or to the industry and have to overcome a steep learning curve.
- Financing. Aside from startup costs, franchisees also face additional expenses when they want to remodel a space or even move to a new location. “HQ teams can help with financing if that is a barrier for operators given that the site location and condition also affect the brand’s perception,” says Carlos Castelán, managing director of retail management consulting firm The Navio Group.
- Employee hiring and management. Franchisees might also be new to recruitment and management. Especially in the retail world, retainment is an ongoing struggle. “Franchise companies need to be more hands-on with training franchise owners in this area,” says Tom Scarda, CEO and founder of The Franchise Academy.
When and how HQ should step in
That’s just a shortlist of the obstacles franchisees have to overcome. Here are ways HQ can step in and help them not only face those challenges but also become more profitable business owners — ultimately helping your bottom line too.
1. Proactive, two-way communication
Many issues in business can be solved through communication. The same rings true for HQ offices who want to help their retail franchisees operate seamlessly and become more profitable.
Communication is only effective when it goes both ways. More important than communicating to your franchisees, you want to communicate with them. This means two-way conversations full of active listening. If you don’t hear from them, you won’t know the challenges they face and how you can help.
“A simple way HQ teams can help franchisees is by having a strong understanding of the issues franchisees are facing and working with them to help them solve the needs of the business,” says Castelán. “One way to do this is by asking the franchisees to appoint an advisory council that can convene quarterly with the HQ leadership to share information and collaboratively build a roadmap of initiatives that will help franchisees drive their business.”
An advisory board is a great way to organize consistent, formal communication. There are other ways you can facilitate these as well.
True REST Float Spa uses a forum to get the conversation going between HQ and franchisees. “Our franchisee discussion forum, Speak Up, has been a great tool to allow franchisees to share honest feedback, brainstorming ideas, new discoveries, questions, and idea-sharing,” says James W. Rowe, CEO of True REST Franchising, LLC. “They can vote each other’s topics up and down, comment, and share, giving everyone a voice.” This group participation allows everyone to feel heard, even if they aren’t outspoken or communication-forward.
Regardless of the route you take, it’s a good idea to standardize things. That way, expectations are shared and people are more willing to take the appropriate route. Which brings us to our next point…
2. Document your roadmap and the processes to get there
Communication should be both verbal and written. Written communication is valuable especially when franchises are spread across the country — or even the world. Part of that involves documenting overarching business goals, where franchisees fit into that, and how you can collectively achieve those goals.
Part of that involves collecting information from your franchisees. They’re the ones who are on the ground, dealing with customers every day. You can learn tons of valuable insights from them and find ways to better support them (and help them support you).
“One big area of opportunity for HQs are to identify ways to work with franchisees to collect relevant data for the business and then share back out with franchisees to optimize the business and boost results,” says Castelán. “Due to the fact that many franchise operations were started without standardized technology systems, franchisees may have started with different tools for their operations which make it hard for HQ to gather data to better serve customers and roll out initiatives.”
Once you collect these insights, you can begin to form documented processes which will work for your franchisees and for HQ. “While a difficult undertaking, bringing standardization across franchisees can help position the business for better growth through visibility to more information and personalization for customers,” he says.
3. Share resources
This is also closely tied to our first two points, but it goes beyond simple information-sharing. You also need to provide resources and tools which will help franchisees meet performance expectations.
“Access and support are two of the biggest challenges. Franchise models differ significantly, but HQ should do all it can to ensure that each franchisee has an appropriate level of access to the … assets that most directly impact their branch and community.” – Miriam Ellis, local search marketer, Moz
So what do these resources look like? Aside from financing, there are tons of tools you can provide. Here are a few ideas to get started, but really you can span to any area of the business:
Ellis points out that you should make sure the Google My Business permissions are set up so local franchisees can update important things like store hours, address, and closings. Rowe even has a 12-week marketing education and implementation plan for True REST Spa franchisees, along with microsites for each location and regular best practice webinars, among others.
Employee recruitment and retention
Again, make sure your franchisees are well-informed about the best practices for recruiting and retaining hourly retail workers — from the sales associate to managerial roles. Provide them with access to employee retention programs, such as scholarships, free local transportation passes, and other perks to increase staff satisfaction and productivity. Host friendly company-wide competitions so employees are motivated and recognized throughout the organization.
This is one of the most important areas to pay attention to. Poor retail ops can lead to financial drains. Rowe has a program to specifically address operations with his franchisees: intranet and True REST University (an interactive portal with team training content), site support visits, annual conference, weekly statistics and rankings for transparency, and an in-house tech support team for their float pods.
Look for a turnkey solution that can do it all, like Compliant IA. The store communication and execution platform has retail audits, task management, and collaboration features you can use across franchisees. With Stories, team members can create and distribute helpful content, and browse through a feed of franchise-wide updates and resources. You can also create tasks based on Stories, which serves as follow-up and holds individuals accountable for action items.
To understand which types of resources will benefit your franchisees the most, consider sending out a survey to find out their pain points and challenges. From there, you can develop effective programs.
4. Be accessible
Remember: Your franchisees are likely spread across different time zones. Noon local time could be midnight your time. It’s important that you have someone available to assist them should emergencies arise.
Digital resources are available around the clock. It could also be a good idea to have an emergency support line should the circumstance arise. “Having more personnel in the field to visit and help the franchisees in the midst of their operations will help everyone be more successful,” Scarda points out.
5. Provide customer service training
Customer service training is absolutely essential — both at the beginning and on an ongoing basis. Franchisees are a representation of your brand. Consumers want the same experience at every location. They only see one brand, regardless of which franchisee they’re doing business with.
“HQs that hold training in franchisee customer service best practices are on the best path towards brand longevity,” says Ellis. “Over 50% of consumers still prefer to shop in stores to interact with products, but over half of complaints also arise from employee behavior and customer service issues.”
6. Pilot and calibrate
Before you implement brand new processes or policies, test them out in one of your HQ-owned locations first. “Operational efficiencies and marketing tactics [should be] tested at company-owned locations before being introduced to the larger system,” says Rowe. Change is difficult no matter how experienced a franchisee is, so it’s best to be the guinea pig to knock out the kinks before a full-on rollout.
7. Visit your franchisees
Nothing compares to being in your franchise locations. Conduct retail audits to ensure franchisees are meeting brand standards. Retail audits are about more than checking up on your franchisees. Retail audits provide an opportunity for personal communication, mentoring, and continuing education.
Remember, even after processes have been rolled out, you’ll want to evaluate and optimize them on an ongoing basis. The market and consumer behavior is always changing, and it’s up to you to stay on top of those shifts and adjust accordingly.
For more information about how to manage and support retail franchisees, check out this post:
About the author:
Alex is a copywriter who works with B2B companies in the retail, e-commerce, and travel sectors to create strategies and expert longform, website, and blog content. You can see her work on sites like Shopify, Vend, Stitch Labs, Money Under 30, and more. thealexsheehan.com.