We all know the old saying that you can lead a horse to water, and all franchisors know you can give franchisees all the systems, training and support they need to be successful, but that doesn't mean they're going to be as successful as you would like them to be. So we've come up with five strategies that have worked for us.
1. Before you do anything else, understand the economics of franchise performance improvement
It's a myth that the role of real estate agents is to get the best price for the seller. Their role is simply to sell more houses. And the best way to do that is to do the opposite of what the myth suggests - keep the prices down to what buyers are prepared to pay. Let's do the maths. Say the agent's commission is 2%. The seller wants $320,000 for their house. A buyer offers $300,000. What's the difference worth to the agent in extra commission? A paltry $400. Better not to risk slowing down the sale or losing it altogether by attempting to push the buyer to offer more. Better to take the $6000 commission on the $300,000 and move on to the next sale.
What does any of this have to do with franchisee performance improvement? Just this. As you'll see in the next section, it's a myth that it's your duty as a franchisor to give all of your franchisees the same amount of support. Some don't need it and some need it but won't or can't use it. Yes, as franchisor, you do have a duty to be there for your franchisees. You need to provide them with the tools they need to operate, market and grow their businesses. But the geography of franchising makes providing personal support very expensive and time consuming.
You can do two things about this.
Look at ways of working smarter, not harder. When you do visit franchisees, make sure you make the most of every minute and do more in the time you've got. Be clear about your and your franchisees' objectives for the visit. Make sure the objectives are measurable and then start to measure them. At the same time, use other less time-consuming methods of training and support. Think outside the box. Establish an Intranet, if you don't already have one. Use training videos as well as face-to-face training. Buddy weaker performers up with stronger performers. Outsource some of your training and support to local providers. Etc etc.
Think of franchise performance coaching as an investment. Calculate your ROI on your investment. Every franchisee will provide you with a different ROI. As with any investment, it makes sense to focus on those with the best ROI, without skimping your duty to the others. That's just the way it is.
2. Find out what's holding your franchisees back
In any franchise, as with pretty much everything in life, you get your top performers, your OK performers, and your also-rans. The OKs are almost always the biggest group. Your job as franchisor is to help more of them become top performers and more of the also-rans become OK performers, right?
Wrong. It doesn't work that way in the real world. To understand why, you have to understand the psyche of your typical franchisee. You may not, even though you work with franchisees every day, because you're not a franchisee. You're a franchisor, which means you're an entrepreneur or you work for an entrepreneur. And most franchisees are not entrepreneurs. They went into business for different reasons than you did, and although making money would have been one of the reasons, it's probably further down on their list than yours. Which means that the idea of making more money, especially if they're doing fine already, may not be any motivation at all for them to improve their performance.
So what drives franchisees? Things like the freedom of being in business for themselves and the flexibility that gives them to spend more time with their families and in leisure pursuits. (We did say that's what drives them, not that it's necessarily a reality.)
How can you use those drivers to improve performance? One way is to demonstrate how a larger, more successful business could support more staff, who could free the franchisee up for the other important things in life. The key is to remember that money isn't everything, to others if not yourself.
3. Find out what works and what doesn't work
This sounds painfully obvious, but it's incredible how many businesses, and that includes franchises, don't fully understand the key value drivers of their business and how they contribute to growth and the bottom line. Part of the reason for this is that the value drivers aren't always obvious. Especially when you're working day to day in the business, not - and we're sorry to have to use this old cliche - on the business. Which is why it pays to get a neutral third-party in - a financial expert or (and this is not a shameless plug, it's the truth, I tell you) a franchise consultant - to look at your business with fresh eyes.
Let us give you an example. Some years ago, we had a franchise client whose business had been growing steadily but unspectacularly for a decade. It picked up after we re-engineered the franchise and improved the marketing, but we felt there was still something missing. Then it hit us - sales. Selling was a key driver of the business, yet the franchisees were failing to convert the leads our marketing was bringing in into sales. We put a new focus on sales - and, hey presto, total network sales grew more than 500% over the next three years. Simple.
A final note here. It's just as important if you're going to focus on what works to stop doing what doesn't work.
4. Remember there are two ways to improve franchisee performance. One is to help them do it themselves.
Give a man a fish, and all that. Of course, as we explained earlier, there's no point in teaching him how to fish until you've determined you're going to get a reasonable ROI from teaching him, and identified what the what fishing's key value drivers are. We did all of that with the client we mentioned above, then launched a new sales system and tools, brought in more and better sales people and gave them better training and support. The ROI - sales increased by 40% in Year 1. Trouble was, the client wanted still more. So we launched our secret weapon...
5. The other way is to do it for them.
Our secret weapon was to hire a National Sales Manager. We'll call him Brad, mainly because that was his name. Brad's job was to overcome the problem we were having with the new sales teams - that is, that the franchisees, who had technical rather than sales backgrounds, weren't managing them well. Brad's job was to work with the franchisees and their sales teams to increase sales. And sales did increase, by more than 100% in Year 2.
The point here is that by bringing in specialist help or support - and it could be in the back office, financial management, operations, anywhere that franchisees don't have strengths - franchisors allow the franchisees to focus on where they do have strengths. Which makes their businesses and ultimately the whole franchise stronger.
Looking for an objective professional to take a look at your business with fresh eyes and recommend ways to fire up your franchisees' performance? You've come to the right place. Simply contact us for a free no-obligation initial consultation.