Relationships of all kinds are built upon initial expectations and the subsequent execution that follows.
Franchising World October 2011
By: Mario Altiery, CFE
Your brand’s franchise development person has undoubtedly been asked, “So how much is it and what do I get?” Typically during the franchise discovery process, the question comes up shortly after the company has been describing the highlights of its franchise business to a prospective franchisee. The franchise candidates are beginning to gain interest so now they are eager to know if they can afford the business and what they receive for their fees. While the questions are common, the answers require uncommon care; as the answers are neither simple or without serious consequences. Carry out these important steps incorrectly and your business might be paying for it long into a franchise relationship. However, carry out these steps well and it can transform your entire franchise system.
Relationships of all kinds are built upon initial expectations and the subsequent execution that follows. In commonplace language, if one says one thing and does another, there is going to be a difficult time for the life of that relationship. Especially in business dealings, people don’t like surprises. It is important to set clear expectations from the start of your relationship and then follow through as closely as possible as the relationship progresses. In a franchise relationship, expectations may be forming even prior to the first conversation with a new franchise prospect, therefore it is important to determine key expectations and then start defining them early on.
Step 1: Determine Key Expectations
Before creating a franchise development system, sales process or franchise marketing materials to represent your franchise offering, first determine the top aspects of your business that any new prospect should understand fully before joining your system. A few key items may include, but are not limited to: the culture, what is received for the franchise fee, what is received for the monthly royalty and advertising fees and the type and amount of support franchisees should expect on those items. Additional items to be represented are what important tasks a franchisee needs to perform on a daily basis to be successful, funds required to launch the business and ongoing fees needed to fund the business until break even and eventual profitability, as well as such important items as understanding competition and how to go about marketing and promoting the new franchise. How does the business determine and define its message pertaining to these items for the franchise company? The franchise might consider creating a list of questions that it can disperse to the various departments within the company. The brand should include such questions as: describe our culture, what specific skills are required to be a successful franchisee, what day-to-day tasks most affect the success of an individual franchise unit? Also, being honest about some previous post-sale issues will help the franchise business understand where it or its development team hasn’t set proper expectations in the past and allow the company to emphasize those in the future. By polling the executive team, development group, administrators, trainers and field staff, the franchise company will gain valuable insights allowing it to create a more accurate and comprehensive list of the key descriptions of the business. Step 2: Creating Development System and Materials
When prospects first begin looking for a franchise business to join, they are like a blank piece of paper waiting for information to be added. The initial data they encounter will greatly affect them and often becomes some of the main catalysts for the buying decision; therefore, it is very important for franchisors to provide an accurate message in all their pre-sale materials. These materials include: the Web site, franchise information packages and electronic information pieces, including e-mails, as well as the message delivered by franchise salespeople during the initial phone calls of the development process.
Step 3: The Transition to Operations
The initial messaging and steps of the development process are controlled by the franchise development and marketing teams. Once the sale occurs, the new franchisee is now transitioned to the operations group. It is very important the expectations set by the development and marketing team are edified and strongly supported by the operations group. At this stage, the new franchisee is both excited and likely a bit nervous. If there is a change in the message between sales and operations, it can create issues that can be both time consuming and expensive to correct. On the other hand, the transition to operations provides an opportunity to add value for a new franchisee while continuing to solidify the important aspects of your business. The organization can continue its messaging by including key components in its manuals, training materials and positioning key items early in training.
Step 4: Hand off to the Field Team
Because your field staff works autonomously, often far from the home office staff, there is an opportunity for your message to become diluted as it encounters the real-world scenarios during “live fire” in local franchise markets. It is important to ensure that field support staff understands the key messages and believes in the company doctrine, knowing it is in the best interest of the new franchisee. When franchisees begin to operate their new business and encounter success based on the expectations that were set in the first three steps of the process, they will become more and more confident in the brand, corporate staff and culture. By reinforcing the message with your field team, the franchisee will trust the advice of the franchisor and look forward to additional support and advice.
Step 5: Staying the Course
If the franchise business has chosen top franchisee prospects, delivered a consistent message and launched the franchises properly, it is likely the franchisees will require less hands-on support over time. While less hands-on support is required, consistency is still important. Often, franchisees will receive newsletters, attend national conferences, log onto company intranets, and review the franchises through online messaging. It is important that the theme of communication is maintained by your marketing team as they passively communicate with the franchisees through these various resources. By utilizing macro-communication tools, your marketing team can unify and maintain company messaging with limited time or employee resources and without great cost.
To create a happy, profitable franchise environment, take time to define the key aspects of your system, ensure staff is behind the message, and recruit franchisees who value and respect the company’s doctrine. Then make sure your message is clearly delivered to franchise prospects beginning with pre-contact marketing materials and continuing through ongoing communication with the most mature franchisees.
Mario Altiery, CFE, is president of Upside Group Franchise Consulting, a full-service franchise consultancy assisting franchisors in marketing, sales, development, day-to-day operations, strategic planning and crisis control. He can be reached at 888-445-2882 or firstname.lastname@example.org.