Experienced Franchisors Weigh in on Tactics: Is No News, Good News?

April 2009 Franchising World

Healthy relationships are the backbone of any successful business.

By Jim Squire, CFE

Franchisors, like anyone else, are probably growing weary of what   is becoming the most common way to start a sentence these days, “In today’s uncertain economic times, it’s more important than ever to …”

Unfortunately, here it is, one more time, with the ending appropriate for the franchising audience: In a down economy, now more than ever, it’s imperative to maintain consistent, positive relationships with the people that are the lifeblood of your system––your franchisees.

In an atmosphere where many circumstances, such as the turbulent stock market and the sub-prime   mortgage crisis, are out of a franchisor’s power, franchisee relations is the one thing the company can control that can directly affect franchisee satisfaction, system-wide profits and franchise sales.

Telling franchisors how important it is to maintain positive relationships with their franchisees is easy enough to do, but providing real, practical tactics for them to start building and improving positive relationships with their franchisees carries more value. Consulting with experienced franchisors of mature franchise systems to discover proven tools of the trade is a great place to start.

The majority of established franchise system executives agree that constant review of franchise relations tactics is imperative. The most successful, mature systems consistently evaluate what’s in place, decide what’s working and what’s not, and also introduce new techniques to perk up their systems as needed.

The Validation Factor
As a franchise system’s most powerful sales force, franchisees can be strong allies or not so strong allies. Positive franchisees demonstrate to prospects that the system is sturdy, and supportive. When franchisees’ ideas and questions are consistently heard, and actions are taken to implement their suggestions, overall franchisee satisfaction increases. Satisfied franchisees, in turn, are likely to provide positive feedback to prospects.

Communicate, communicate, and communicate. If location, location, and location are the age-old three most critical factors to the start of a business, communicate, communicate, and communicate are the three most critical factors to the success of a business.

So, how can franchisors better utilize existing approaches in terms of franchisee communication? Might a change be needed? Some traditional methods, such as using field consultants for store visits, are adequate, but how can these consultants be better utilized? Often, a field consultant is sent out to troubleshoot a problem, but is a rare sight in quiet times. They take use the “no news is good news” approach. However, a more proactive campaign can head off troublesome times to begin with.

Field consultants should consistently offer new ideas to franchise owners and assist them regularly with tactical means of boosting sales and driving business, not just make sure things run smoothly or help put out fires.

Tips From the Pros
Once a franchisor has objectively examined its franchise relations methods, it’s time to find out what’s working and what areas   need to be addressed. Consider some of the following advice from some of the nation’s most successful franchise systems.

Jo Kirchner, CEO of Primrose Schools, with 200 locations nationwide, said the key to healthy franchisor/franchisee relationships begins with respect and clarity. It all starts with finding the right franchisees.

   • Build Trusted Relationships
“All good partnerships start with a shared vision, core values and a clear understanding of each others roles,” Kirchner said. “At Primrose, we recruit people who share our vision and our values, such as our foundations of trust–integrity, fairness, social responsibility and enthusiasm. When you start to build trusted relationships with the right franchisees, you have a clear understanding of how they are going to work together. Only then can positive relationships flourish between both groups.”

   • Listen Well and Over-Communicate
“Positive relationships require good listening skills. Each party should have a need to understand what the other is thinking, and why,” Kirchner said. “Most of the time, we are able to come to mutually-acceptable agreements when conflicts arise, but only if we both understand what’s important to each other, and why. Communication is a huge challenge in today’s fast-paced world. People need to know what’s happening, when it’s going to happen, and why. When they don’t, it leads to speculation, which breeds negativity and fear. In the end, relationships suffer.”

   • Focus on Their Bottom Line
“Engage franchisees in initiatives that are important to their business. When franchisees feel that you are focused and highly-committed to the profitability of their business, the partnership is strengthened,” she said.  “When they know that their opinions count, that their ideas are considered, and that their thoughts are embraced and incorporated in strategic decisions, their confidence in the partnership grows.”

Technology-Aiding Communications
Jennifer Lemcke of Weed Man, a Canadabased lawn care provider with more than 230 U.S. territories, has found that the use of technology has increased communication with franchisees exponentially. Examples include:
   • Weekly Webinars
Weed Man provides weekly Webinars for all franchisees throughout the United States on topics ranging from the simple (how to enter your budget into QuickBooks and balance entries) to the more strategic (the keys to success when knocking on doors to drum up business). The seminars are audio/visual, combining PowerPoint on the Web with a phone conference line. During the Webinar, franchisees can participate and ask questions.

After the Webinar is completed, the company offers franchisees the ability to download it for future use, or for those who were unable to participate. In addition, Lemcke said, the company tracks which franchisees attend the Webinars to see how it has affected their bottom line. “This further validates and encourages all franchisees to participate as it can mean more customers and dollars. The campaign has been highly successful,” she said, noting that on average, more than one-third of franchisees participate in the weekly Webinars. Those owners, Lemcke said, are the system’s best performers.

   • National Conference Calls
The company regularly also holds national conference calls and brings in guest speakers to talk about such topics as ‘The Art of Conversational Selling,” and others. This provides franchisees the opportunity to hear from experts in the franchising and sales fields for ways to better their business. Calls are available online for franchisees’ future reference.

Traditional Relationship Builders
Here are three other simple, but proven franchisee communications/relations strategies:
   • Intranet Communication
Having an intranet to communicate with franchisees is something that many franchise companies have, but it’s important to look at how your intranet is set up to ensure that twoway communications are optimized.

Tim Goodman, vice president of franchise administration for FOCUS Brands, franchisor and operator of more than 2,200 ice cream stores, bakeries, restaurants, and cafes, said the company’s intranet system serves multiple purposes. Not only does it provide franchisees with essentials such as press-release templates, up-todate news and contact information for vendors and other parties, but franchise owners can also communicate via a Question Board section. “The goal with our intranet is to effectively communicate with franchisees, but also give them an opportunity to communicate with each other, which also builds positive relationships. We also use it to provide a vehicle to hear some of their ideas. When it comes to positive franchisee relationships, it’s definitely a two-way street.”

   • Satisfaction Surveys
According to Goodman, it’s important to ascertain franchisee satisfaction utilizing an objective, third party source. At FOCUS Brands, the company conducts annual satisfaction surveys to get a good feel on what’s working and what concerns are in the field, and then sets specific goals and   initiatives based on survey results. Using the surveys, the company can objectively judge their progress in a wide variety of areas, ranging from marketing, sales, and basic functions of the business.

   • Advisory Councils
At HoneyBaked Ham Co. and Café, we have a Franchise Advisory Council elected by our franchisees that plays a key role in helping us maintain positive franchisee relations. While the concept of an FAC isn’t new, it’s an important distinction how we embrace our council’s ideas and suggestions and tap into the power of the franchisor/franchisee strategic partnership. Franchisors should examine their council and determine if they are utilizing the body to its fullest potential. They should meet with them regularly and assign a member from the corporate office to communicate with members on a regular basis, outside of quarterly formal meetings. Franchisees sometimes have the best ideas that can radically change your franchise for the better. After a McDonald’s franchisee devised the idea of the Egg McMuffin, franchise systems have become more aware of the potential of golden ideas that franchisees may have, and offer formal outlets such as FACs to give their suggestions and proposed ideas a voice and a vehicle for implementation.

Healthy relationships are the backbone of any successful business. But in franchising, where the most important assets––franchisees––are out in the field, versus the corporate office, the distance can create challenges in maintaining positive relationships. However, by utilizing some of the advice and best practices of some of the industry’s most mature, and well-respected players, franchisors of any size, category and age, can create strong, lasting partnerships with their franchise owners.

Jim Squire, CFE, is the director of franchise development for the HoneyBaked Ham Co. and Café. He can be reached at jsquire@hbham.com or 678-966-3254. Squire also serves on IFA’s Franchise Relations Committee. For more perspectives on franchise relations, visit the FRC online at www.franchise.org/franchiserelations.aspx.