Franchising Is Full of B.S. No, Not That B.S.

February 13, 2017

Lasting franchise success requires an understanding of behavioral sciences.

By Craig Slavin

Have you ever said something you wished you hadn’t? Have you ever held a great presentation or training program only to have had little to no effect at all? Have you ever scratched your head wondering why someone just did or said what they did?

These are all rhetorical questions because we know each situation has occurred and many of them consistently. If you have been in the franchise industry for a while you know that franchising is simply a method of distribution. The real truth is that “franchising is all about people doing business with people!”

Companies once relied solely on the strength of their products or services. It was, for many years, very top down. Pushing information towards candidates and franchise owners. Today, it is “bottom-up,” meaning, it is now all about the strength of the people that are delivering your product or service to the end-user for usage or consumption.

A good fit

Franchise companies are beginning to understand there has to be a good fit between the franchisor and franchisee, and the franchisee with the business model. This is a proven fact that has been studied, analyzed and measured over time but most franchise companies realize the importance of this fit after the fact.

Around the water cooler at franchise headquarters everywhere you commonly hear, “I wish that franchisee was never awarded a franchise” when the conversation turns to problematic franchisees.

In spite of selection mistakes, most franchisors have confidence in their ability to select new franchisees with only their gut instinct. Many early stage franchise companies depend on the initial franchise fee to fund growth and are all too willing to accept the check regardless of the fit.

And, regardless of how selective a franchisor may be, it is difficult to know if a franchisee is a high performer, mid performer or low performer until about 16 months after the franchise agreement is signed, the franchise relationship forms, and sales and customer service is delivered.

People do what they do, make decisions, interact with customers and employees by one key human behavioral characteristic: their own internal “value system.” Whether we realize it or accept it, everything we do in life and business is based on an individual’s personal value system.

How our mind works and decisions are made or activities performed are all based on the connection between your brain and your heart. They work as a team. Science has proved it. That is what comprises your own individual value system.

Science has been around a long time

But what is the science behind this? It’s behavioral science, the science that analyzes and explains why people do what they do, their natural tendencies, comfort zone, hot buttons, motivators, why some people are leaders, some people are achievers, why some are successful and others not so much.

Behavioral science is not new, in fact companies have been using behavior science profiling instruments for years to make sure they understand their company employees. You probably have taken one of these surveys: DISC, Myers-Briggs or Caliper.

Behavioral science has been used for employee relationships for years but franchise companies should not expect an employee instrument to provide guidance in franchise selection. As we know, a franchisee is not an employee.

Top performing franchise companies are built with people that fit their franchise business model. Behavioral surveys designed for the franchise industry are extremely helpful in discovering who people really are. Knowing the inherent characteristics of your franchise candidates provides franchisors with insights for determining whether they match your ideal owner profile.

Flaws in franchising

What happens when a franchisee is performing poorly? Often, Franchise Operations will order more training for the franchisee. When that doesn’t work, Franchise Development gets blamed for poor selection.

The franchisee becomes more problematic trying to rally other franchisees in disruptive behavior to place blame on the franchisor for its poor performance. The train-retrain cycle continues, then is abandoned and replaced by hope that the franchisee will quietly leave the system.

Franchising is a cookie cutter industry; build the model that works then replicate it again and again until there is one on every corner. The flaw with that model is the people factor.

Since the dawn of time, people have thought differently, acted differently, and fared differently from each other. People learn differently too.

Another flaw in franchising is training programs designed for a cookie cutter approach that assumes all people learn the same way. People learn in different ways because they are wired differently. No one has a better learning style than anyone else. There are people that learn best through listening, others learn best through seeing and others that learn best through touch or experience.

Think about one of life's earliest lessons, often taught by our mothers: the stove can burn you. Listening learners heard their mother, believed the information, and never touched a stove. Seeing learners watched their brother touch the stove, and never touched it. Experience learners touched the stove; but only once!

Another flaw in franchising is the assumption that anyone can be trained to operate a franchise. This thinking assumes everyone is wired the same way, which is not true.

The reality is that a franchise model has a specific role for the franchisee in the business whether they are wired to fill that role or not. For example, a franchise model may have the franchisee fulfilling a key role in sales. The franchisee’s behavioral profile may show he is not wired for sales and no training or retraining will change that.

Avoiding costly mistakes

Behavioral assessments can provide effective insights into the natural characteristics of potential franchisees throughout the qualification process.

Do they have the drive and dominance factors that fit your franchise model? Does their behavior survey show them to be too independent or too indecisive to operate your franchise? Do they
have the social skills to build relationships with repeat customers?

Through the mutual franchise discovery process, the franchisor wants to learn who is really sitting across the table. Does this franchise candidate seem too good to be true?

By using behavior assessments, a franchisor has better insight into the candidate and is not surprised by candidates who are masters of the interview, only to pay the consequences as they struggle after being awarded a franchise.

Franchise selection is not an exact process, but using behavioral science methods adds more rigor to the process. It can be very cost effective by avoiding expensive mistakes especially when awarding master or regional development agreements where the stakes are higher and a bad choice can damage your franchise expansion in a major market with considerable impact to your budgets.

Benchmarking

After exhaustive research, almost 25 years ago, our team of behavior psychologists determined there are four distinct behavior profiles. Every person has a dominant profile and at least two to three subordinate profiles, much like the supporting cast in a play. The dominant tends to be the driving force. The subordinate profiles support and reinforce the dominant profile.

Everyone has all four profiles at all times and their own individual, unique “Personal Source Code.” Just like a computer software program, each person is wired differently.

Upon completing a behavior assessment, each survey taker should receive a quantifiable behavioral profile for four distinct profiles. Not just one or two. Understanding or interpreting the survey lets franchisors understand who that individual is. Yes, this is helpful to learning about the franchise candidate and determining if this individual is a good fit, but through a scientific and statistically valid benchmarking, franchisors can take this science to another level.

Benchmarking is taking the profiles of current franchisees and creating a segmentation model clustering them into high performers, mid performers and poor performers based on the criteria your franchise deems important. The profiles of high performing franchisees are analyzed and an ideal profile is scientifically calculated and used as a benchmark.

Based on over 25-plus years of research, this process, to a high degree of certainty, provides guidance and insight on the best way to interact with candidates that match the profiles of your high performing franchisees. The ultimate goal in this cookie cutter industry is high performing franchisees that are dedicated to growing your franchise brand and are capable of executing your business model the way in which it was designed.

Craig Slavin is Founder and President of Franchise Central, a holding company for Franchise Navigator, ConnectMe to The Right Franchises, Navigator Certified Life Coaches and Franchise Architects. He is the author of Franchising is Full of BS.