May 2008 Franchising World

There are many different ways to measure success in franchising but, clearly franchisee satisfaction is at the top of the list.

By Eric Stites

In the passionate words of the late Bill Rosenberg, founder of both Dunkin’ Donuts and co-founder of the International Franchise Association, “You can’t have a successful franchisor without successful franchisees and you can’t have successful franchisees without a successful franchisor.”
 
I never had the opportunity to meet Bill in person, but I believe that his ideas and vision for what franchising should be are very much alive in some of today’s franchise leaders. I have had the opportunity to work with some of the very best in the business, learning from their years of experience with successful franchisee-franchisor relations. Here are just a few of the ideas that could have a major impact on your franchise relations and the overall success of your business.

Painting a Picture
It goes far beyond just simply having a strong vision for your company. You need to communicate your vision to your staff, your franchisees and your franchisee candidates repeatedly. Your vision needs to be so vivid and clear that everyone can see it, feel it, and believe it. It’s what Brian Scudamore, founder and CEO of 1-800-GOT-JUNK? and IFA’s Entrepreneur of the Year, calls “painting a picture.”
 
Scudamore’s 2012 vision for 1-800-GOT-JUNK? is driving the company toward his goal of $1 billion in sales, operating in 10 countries and having a globally-admired brand. “Admired not for what we’ve built, but how we’ve built it,” said Scudamore. It is those crystal clear, concrete goals, painted with exacting detail, that keep his home-office staff and hundreds of franchisees focused on where the company is going and how it is going to get there.

Keeping Commitments 
It sounds so simple and obvious that it’s almost silly to mention. But occasionally, we all drop the ball. No matter how hard we try to be perfect, something always slips through the cracks. That is why Catherine Monson’s “Keeping Commitments Worksheet” is such a brilliantly simple idea.
  
Monson, an IFA board member who serves on the association’s Franchise Relations Committee, heads up Franchise Services’ PIP Printing & Marketing Services and knows about keeping commitments with her franchisees. Each year during the PIP annual convention, Monson and her staff use a simple pen and paper worksheet to keep track of every commitment made to a franchisee. After the convention, the worksheet is circulated among the corporate staff until every commitment is completed and followed up on.

“Any time you are with a large group of franchisees, lots of commitments are made,” said Monson. “One of our pledges to PIP franchisees is that we will keep every commitment we make. The Keeping Commitments worksheet ensures that even during the hectic times at our annual convention, when it could be easy to forget a commitment, especially a small one, we capture it and then follow up to ensure it is handled. Sometimes it’s the smallest ideas that make all the difference.”

In Business Together
Sandler Training Pres. Bruce Seidman credits his company’s “together we’re stronger” culture with helping it maintain very strong relations with their franchise owners. Part of the “we’re in business together” legacy of founder David Sandler, the life-long learning never stops for franchisees and corporate staff.
 
While many franchise systems struggle to get franchisees to attend their annual conference, Sandler hosts three national conventions each year with 95 percent  attendance. And it doesn’t stop there. With a highly-active franchisee advisory council, regular regional meetings, an on-call coaching staff of retired franchisees, and coaching videos online or in MP3 format, Sandler Training franchisees have lots of resources at their disposal. On top of that, each franchisee has his own “accountability coach,” another franchisee that they talk with regularly to make sure they are hitting their own goals.

“Because we’re a training company, we’re good at training,” said Seidman. “We do what we say and follow through with our franchisees. It’s all just basics but so true – and we deliver.”

Communication Flows Both Ways
Good communication is a challenge with just about every organization, franchise or non-franchise. The art of being a great communicator starts with being a great listener, actually hearing the other person’s word and more importantly, the meaning behind those words.

In a franchisor-franchisee relationship, as in any relationship, it is important to put yourself in the other person’s shoes to see (and hear) the issue from his or her perspective. Ask questions, listen to his or her responses and respond thoughtfully. Repeat any issues or concerns you’ve heard and create a solutions-based plan together.
 
Paul Hogan, founder and CEO of Home Instead Senior Care knows a lot about the art of listening. “We do a lot of listening,” said Hogan. “We talk to and survey our franchisees more than any company I know. We’re seeking to grow the whole organization, not just one aspect of it. We don’t leave any stakeholders out.”
 
For Hogan, the listening has paid off. Home Instead’s franchisee satisfaction and performance ranks among the highest in the industry.

Engage Early and Often
Having franchisees involved in every level of a franchise organization is critical to the overall success of any franchise system. The franchisees are interacting with customers every day and it is important to have a feedback loop to the corporate team. While many companies setup a franchisee advisory council specifically for this purpose, some go an alternative route that can work just as well.
 
Joe Lindenmayer, president of TSS Photography, said,  “Without listening to franchisees and having them engaged in the vision and the direction of the company, you’re really in a glass house; you don’t know what you’re truly missing. There are opportunities out there and you can shorten the learning curve if you engage with the franchisees earlier.”

Lindenmayer, who views franchisee advisory councils as often too political, came up with a better solution. “What we do is go out into the franchisee community and look at who has best practices—people who are experts in a specific area that we look to add value to,” said Lindenmayer. “We then engage those people and ask them to participate on our panels. They then recruit like-minded people that will contribute to the progress of that project in a very positive way.”

Rules of Engagement
Having established ground rules for how franchisees and the franchisor work together can be a powerful tool for successful franchise relations. Just ask El Pollo Loco Pres. and CEO Steve Carley.
 
“The first week I was on the job, the president of the franchisee association called and informed me that the franchisees had already collected the money, set aside a war chest and were going to sue us if we didn’t address the following points in the next two weeks,” recalled Carley.
 
Carley quickly tossed his 90-day action plan out the window and immediately sat down with his franchisee advisory council and executive team to draft a new action plan together. “The vast majority of our franchisees’ issues were around communication, respect, the ability for the franchisor to listen and respond thoughtfully and things like ground rules,” said Carley.
 
Together, Carley and the franchisees drew up a set of “rules of engagement” centered on a true partnership orientation. These rules laid out the responsibilities for the franchisor and the franchisees on exactly how they were going to work together going forward. Now the central core of their franchisee-franchisor relationship, Carley proudly introduces the rules to prospective franchisees during the recruitment process. “We sit down [with candidates] and talk about the kind of relationship we want to craft.”
 
The rules of engagement must be working. El Pollo Loco is enjoying growth and profitable stores.

Leadership Summits
Bringing your top-performing franchisees together for a few days of brainstorming and vision-sharing not only builds strong bonds, but also produces amazing results. “Once a year we fly in 10-15 exemplary franchise owners for a three-day, vision-sharing summit,” said Liam Crowe, president and CEO of Bark Busters USA.
 
Bark Busters Leadership Summits are not just another business gathering, long on dreaming and short on actionable items. They are results-focused power gatherings of the best and the brightest in the system.
 
“These are franchise owners who are excelling in their business, are operating within the parameters of their franchise agreements and are true thought leaders,” Crowe said. “We start each program sharing our long-term vision and then dial it back to the next 12 months. It’s a dynamic, energy-filled time that always generates some phenomenal action plans.”

Masterminds
Many systems offer different types of franchisee mentoring programs designed to bring franchisees together and coach each other to achieve better business results. These programs may be organized formally through the corporate office or informal groups setup by interested franchisees. Pres. and CEO John Hayes and the team at HomeVestors have taken the idea of mentoring to a new level with a program called Masterminds.
 
To begin, franchisees cannot join a Masterminds group until their third year of successfully operating a HomeVestors franchise. While at first this may seem counter-intuitive, since new franchisees usually need the most help, reserving the ranks of Masterminds for more senior people is said to make these groups more powerful and effective. And for those new franchisees, HomeVestors offers many other training, coaching and mentoring programs specifically designed to meet their needs.
 
Each Mastermind group includes a half-dozen franchisees from different parts of the country and a corporate facilitator. The groups meet quarterly with each franchisee member taking turns hosting the two-and-a-half day sessions. Day 1 begins with a brief follow-up report from the previous meeting followed by an all-day presentation by the host franchisee. Mastermind presentations are full-disclosure sessions where the host franchisee gives a detailed report on the status of his business, going deep into profit-and-loss statements, employee issues, market analysis, current projects, and business forecasts. Visiting franchisees are allowed to ask questions but no advice is given during the presentation stage.
 
After a group dinner and a good night’s sleep, Masterminds Day 2 begins with a morning meeting of the visiting franchisees, without their host. This is an intense session where the group picks apart every detail of the host’s business. After a short lunch, the host returns for an afternoon of open business discussions and invaluable advice from five seasoned colleagues.
 
Day 3 wraps up by noon with final discussions, action planning and farewells until the group meets again next quarter, when another Mastermind member will be on the hot seat in front of his peers.

Bill’s Approval
Bill Rosenberg would be proud of the legacy he helped to create and applaud the efforts of today’s great franchise companies, which have built very successful partnerships with their franchisees. There are many different ways to measure success in franchising, but clearly, franchisee satisfaction is at the top of the list.

Eric Stites is president and CEO of Abistar Group, LLC, the parent company of Franchise Business Review. He can be reached at 866-397-6680 or eric@franchisebusinessreview.com .