How Suppliers Support Strong Franchise Relations

Supplier services and applications facilitate strong relationships

By Jack Pearce, CFE

Honest, strong and effective relations between franchisors and their constituent franchisees are the backbone of any franchising business model. If the franchisees are not effective at executing the business model as designed, then the franchisor cannot prosper or grow. If the franchisor neglects his responsibility to develop the brand or improve the business model, then franchisees have little hope of survival. Together these two groups must depend on each other to succeed at their respective roles and without key industry suppliers they might just fall short.

The International Franchise Association’s Supplier Forum is a valuable resource for just about any of the critical communication, education, marketing and support applications or services necessary to achieve these relationship objectives. Whether it is an emerging franchise opportunity with only a few existing locations, or a mature system with thousands of units, the forum has a variety of members capable of meeting the needs for the success of the respective business model.

Since franchising is primarily a “distribution” model for rapidly-expanding market development, it hardly makes sense for every new or even older franchise organization to re-invent the basic organizational components it takes to achieve success. Since time and capital are at a premium, the speed at which effective systems can be deployed to manage communications, education and support of ongoing operations becomes mission critical. This is where both franchisor and franchisee can look to suppliers for solutions.

There are several components which contribute either directly or indirectly toward building effective relations between franchisors and franchisees. At the bottom line, if the use of these applications or services achieves any level of improved franchise relations, then it is well worth the investment. The components examined here include intranet systems, sales-data collection and analysis, helpdesk utilities, online training, franchisee Web sites, supply management, customer relationship manage- ment, ad-builder utilities and eventmanagement applications.

Intranet Systems

The ability for franchisees to regularly communicate with each other is one of the most powerful tools for maintaining quality and performance within any franchising system. An internal intranet has become the method of choice for achieving this level of communication and several national service providers offer these powerful networking tools. Almost any franchisee using an intranet system will agree that one of the greatest strengths within their organization is the ability to openly communicate with each other in real time, as well as the ability to share tips, techniques, feedback and other experiences with a variety of fellow franchisees from any region of the country.

It doesn’t mean a franchisor is any less responsible for providing the methods, procedures and support necessary to operate a franchise; it is just a whole lot easier to accomplish using a centralized intranet system. The franchisees appreciate and learn a great deal from the bulletin board or forumstyle discussions with fellow franchisees, but expenses are kept low and communication is uniform when the parent company delivers much needed centralized support and information through this key channel.

Maintaining advertising standards, providing electronic artwork and logos, delivering operations manual updates, keeping franchisees informed on industry news and many other important communication functions are most effectively delivered through an intranet. Service providers within the franchising industry currently offer a variety of intranet systems making it fairly easy and cost effective to implement them at most any stage of franchise development.

Sales Data Collection and Analysis

This type of application is usually connected with a specific point-of-sale system and provides automated collection of key sales data. Relative to franchise relations, the importance of analyzing sales data is to provide realtime, aggregate feedback to franchisees on which product mix, inventory levels, pricing and other operational decisions can be based. Ultimately, it is a mutual goal for both franchisee and franchisor to target the most profitable and highest potential sales categories for concentration within their respective market. The relationship between these parties operates best when it is grounded in factual information collected from actual sales data. Again, a variety of service providers within the franchising industry offer very sophisticated and cost effective products and services within this category.

Help Desk Utilities

“Help Desk” utilities are an obvious component for the development of strong relations between franchisors and franchisees. A store or unit operator must often depend upon a timely response to questions about daily operations or customer service standards. The simple availability of a live support person is a much needed security blanket, particularly for new franchise operators still learning how to most effectively deliver their service and brand to the consumer.

Although a help desk function is typically an organizational commitment made by the parent company, many industry service providers now offer software utilities and online services intended to organize and manage the entire process. From cataloging FAQs to monitoring frequency and severity of operational problems within individual franchise locations, help desk utilities tend to have a dramatic impact on the quality and effectiveness of franchise relations.

Online Training Applications

In terms of franchise relations, training has always been one of the most critical obligations the parent company must deliver to their new franchisee and is a major factor in the unit’s ability to succeed. In the past this training was typically delivered through a combination of classroom and live demonstration sessions and was usually performed at the franchisor’s home office. This process has historically been difficult to maintain in terms of uniformity and comprehension and is expensive and time consuming for the new franchisee.

Today, the proliferation of Web-based training applications supported by thirdparty providers has expanded the number of options and resources made available to a franchisor to achieve these very same training objectives. By taking the time pressure off the home-office experience and focusing more attention on building solid relationships and trust, the new franchisee has a much greater opportunity to truly absorb the essence of the company’s brand and the quality of its management team. Having this solid foundation on which the franchise relationship is built allows all parties to overcome many of the obstacles encountered over the life of a franchisee’s investment in the brand.

Once the franchisee has returned home, there is plenty of time and many opportunities to participate in a wide variety of online training applications. Usually these will feature self-guided and timeless modules allowing the franchisee to manage both their hectic new business schedule, as well as learning at their own pace. The combination of availability and self-direction ultimately results in a more thorough comprehension of materials, reduces the stress caused by limited classroom time, widens the access of materials to other partners and employees, and for everyone, it decreases the costs associated with distributing operations, marketing and educational materials.

Franchisee Web Site Management

The franchisor who provides individual Web site management for their respective franchisees will often experience much greater levels of satisfaction in franchise relations compared to those who do not. When franchisees must spend their own time and money to design, develop and launch individual Web sites, they will most certainly feel an imbalance in the equity of their parent company relations. This often leads to complaints and dissatisfaction over the true commitment on the part of the franchisor and is contradictory to the winning relationship in franchising. Ironically, it is in the best financial, operational and branding interests of the parent company to offer the franchisee an individual and customizable Web site as a derivative of their corporate Web site. The common practice of search engine optimization is best achieved when it includes the depth of content, volume of pages and number of external links associated with embedding the individual franchisee Web sites along side the single, parent company portal Web site.

In addition, even though most Web site management utilities allow the franchisee a wide variety of customizable content and features, it also promotes uniformity in look and feel which is precious to any long-term marketing and branding strategy. The consumer is treated to easy navigation and familiar controls while the franchisee can tailor individual content toward his own operational strengths, products and services.

Supply Management

Offering franchisees an online supply management system is more of an indirect form of franchise relations, but it still serves to create a favorable impression of the franchisor. In many franchise concepts, access to branded or proprietary supplies is an important piece of the operational model and without it the franchisee might struggle to maintain adequate inventory levels or be able to acquire branded supplies on a local level.

As a result, many suppliers in the franchising industry today choose to primarily serve their franchisee customers through Web-based or online ordering systems. Not only does this methodology decrease paperwork and expenses, it also allows the supplier to carry wider varieties of generic stock which can have company logos and other brand identifiers added on a justin-time or as-needed basis. Even though it is the suppliers who have adapted to this new Internet reality, it is often the franchise organization that benefits most from this efficient and convenient distribution methodology.

Customer Relationship

Management

Customer relationship management applications have been around for quite some time and provide very sophisticated tools for staying in touch with key customers and maintaining professional relationships. Both franchisor and franchisee might use the same application within a single organization, but with two very different sets of customers in mind. The franchisee may track key client information to enhance sales efforts while the franchisor might use the software to record routine correspondence and support contact with their respective franchisees.

In terms of franchise relations, CRM applications again provide the kind of factual data and historical records on which very sound relationships can be built and managed. Every franchisor has heard the common franchisee expression “What have you done for me lately?” With a simple look-up function in their CRM application a franchisor can now quickly recite exactly what their support or marketing teams have delivered to the franchisee recently.

Ad Builder Utilities

With a somewhat indirect benefit for franchise relations, an ad builder utility offers a similar positive impression of franchisor commitment as did the supply management utility discussed earlier. Maintaining a consistent look and feel to all branded advertising can be very challenging for a franchisor, but ad builder utilities serve to protect layout designs, color consistency, ad copy, trademarked artwork and a variety of other proprietary marketing components. The franchisor saves expenses and controls uniformity while at the same time empowering franchisees to tailor their local marketing and advertising efforts to suit their specific target market needs.

Without this form of collaboration individual franchisee ad campaigns can be difficult and time consuming. The more effective use of everyone’s time and energy is to invest it in the collective brainstorming and franchise advisory council functions which result in a deeper level of acceptance for advertising standards and materials. This latter process is a far better foundation for solid franchise relations and it leads to the development of collateral materials and marketing strategies in which all parties are much more committed.

Event Management Applications

The availability or use of event management applications on the part of a franchisor might seem far afield from the topic of franchise relations, but in fact it might just be one of the most important elements in developing strong bonds between parent company staff and franchisees. Nearly every franchise organization will experience a positive boost in morale and heightened personal relationships as a direct result of a national or regional convention. Most franchisees will tell you it is the opportunity to share ideas and communicate directly with fellow franchisees which makes these events so powerful and rewarding. On the other hand, it is the franchisor’s responsibility to organize, manage and produce a successful event at which these very positive rewards can be achieved.

Whether it is the indirect reward of pulling off a successful convention or directly facilitating collaborative communications through an intranet system, all of the vendor supplied applications, utilities and services discussed have some measure of positive influence on successful franchise relations. Progressive franchise organizations will take advantage of many of these services and faltering companies will often look back at the opportunity missed by not developing these vital components.

Jack Pearce, CFE, is an executive director of franchise relations for Annex Brands, Inc. He can be reached at jpearce@annexbrands.com . Pearce also serves on IFA’s Franchise Relations Committee. For information on the International Franchise Association’s Supplier Forum, visit www.franchise.org .