February 2008 Franchising World
By Steven M. Rafsky
Last year, Padgett Business Services recently celebrated its 40th year in business and more than 30 years in franchising. As the organization’s history was reviewed, many realized that its core business offering has not changed much. Of course, technology has changed many of the procedures and many components of the system have been greatly updated. Yet, the core elements of the customer-relations model are based on the same principles of 40 years ago. In reviewing this history, it became clear that the most successful of the franchise owners are those who materially follow the entire system.
A More Predictable Experience
Franchise companies offer individuals who want to open and succeed in business proven systems that make the ongoing venture with business ownership a more predictable experience. A key element of a successful franchise system is the well-defined “system” that franchisees buy into both literally and figuratively. Franchise organizations tend to focus on compliance with the system. An alternative focus may be promoting the benefits of continuity within the system.
The system is far more than the identity represented in the logo, letterhead and marketing materials or such elements as software, menus or product/service offerings, support and procedures. Of course, all of these key elements, proven processes or trade secrets make the system special. On a higher level, the most successful systems strive for continuity within and throughout the system by promoting each component to its proper level of importance. The franchise systems that promote the most continuity offer the most support and security to its franchisees. A key item that is sometimes overlooked is promoting the benefits of system-wide continuity. The benefits are widespread for the franchisor and its franchisees. As I have compared our experience with other franchisors, it is notable that system-wide continuity is a common goal, but the emphasis varies greatly.
We all know that people seek to join a franchise system for the security a proven system offers and to avoid having to “reinvent the wheel.” The IFA Web site encourages prospective franchisees to consider the benefits of joining a franchise system as compared to their personal needs. The IFA points out that “If you are a person who likes to make most decisions on your own or to chart the course of your business alone, a franchise may not be right for you.” In other words, one acquires the security of being a part of a proven system while giving up some independence. Yet, too many people don’t implement the system they learned during the initial training. I am not going to offer reasons for this occurrence other than make the broad conclusion that continuity of the system was not emphasized enough, or the benefits of employing the entire system were not accepted.
Make Continuity Benefits Clear
To attain continuity within a franchise system, training and support must be “in sync” and effective. To encourage continuity, the benefits to all must be clear. As an example, in our professional business services format, part of our system continuity focus is on office procedures down to the most basic level –“write-up” and data input procedures, file format, product delivery procedures, and so forth. This may sound mundane; however, our franchisees know that if they become incapacitated due to a health issue, we will be on-site to ensure that their businesses stay in operation, that is, if he or she is following the system. Our franchisees also know that if we find that they are not following the system, we will return home as we will not attempt to learn their “system.”
One way to encourage continuity is to track and report franchisees’ engagement with the system. The anecdotal information suggests that those systems that focus on system-wide continuity not only realize expected benefits, additional benefits are common. As an example, in our system, those who have the highest profit margins strive to employ the entire system. Another franchisor reports that franchisee satisfaction is highest among those franchise owners who follow the system. By encouraging continuity, support efforts are more efficient and franchisee-to-franchisee mentoring is more meaningful.
Many franchise systems have franchisee advisory boards that can help define programs to encourage system-wide continuity and that can help promote the goals and benefits of adopting the entire system. It could be a meaningful effort to work with your advisory board to define the benchmarks to recognize a franchisee for following the system as anticipated or for promoting system continuity with other franchisees. These benchmarks should be definable on a macro level and their benefits of following the company’s model should be clear to the franchisor and the franchisees.
To encourage or promote continuity, one should not be focused on each item of the system separately, but rather, focus on how the system comes together as a whole package. As an example, if you are in a business-to-business system, marketing is usually a key focal point of the company. Certainly, people are focused on the proper use of the marketing collateral, return on investment, defining the prospect, etc.
When focusing on marketing continuity, one would probably focus on on-going effort and conformity to the model that works. Measure results for those who have on-going marketing efforts versus sporadic bursts of marketing efforts. Then separate any reports by showing results for those who follow the system as compared to those who tend to tweak the system. One will probably find that there will be marked improved results by those who follow the system. The same could be said for any other type of system–including retail and manufacturing.
Focusing on ways to encourage franchisees to comprehensively engage the system reaps many benefits. The customer is better served, franchisees are more confident with and more profitable when employing the system and operations benefit greatly as all are more focused. In our case, compliance auditing has become a “best practices” review. Focusing on system-wide continuity tends to encourage people to be an integral part of the franchise community instead of simply being associated with the franchise system.
Steven M. Rafsky is chairman and CEO of Padgett Business Services/SmallBizPros, Inc. He can be reached at 781- 251-9410 or srafsky@SmallBizPros.com.