Improving Unit Network Profitability and Performance

Clear, concise processes can also quickly lead to improved performance.

By Jerry Crawford, CFE

When the desired results don’t take place, the same phrase is often echoed in sports and business: “We didn’t execute.” Whether it’s a game plan or business process, failure to execute every aspect of the plan can put you behind the competition. More specifically, poor business execution slows unit performance and reduces profits. So what can franchisors do to help their unit franchisees execute within their business and grow? First and foremost, franchise owners must understand they are business owners. Make that an area of focus in their training. If needed to get the point across, hang a neon sign that reads “Welcome, Business Owner” so it’s the first thing a potential franchisee sees when they walk through the door. The sooner franchisors can help a franchisee to think and act like a business owner, the sooner they will understand that their execution of the plan is essential to their success.

Executing the Plan

Franchisors must also execute. It cannot be expected that every individual who invests in a franchise has an expert level understanding of taxes, payroll, operations, insurance, administration, sales, inventory, management, training and so forth. As franchise systems have grown, franchisors have also had to seek answers and implement new, improved methods of doing business and then share that information with franchisees. When that’s done successfully, it’s another assurance to helping franchisees execute, perform more efficiently and improve their bottom line. The commercial cleaning franchise industry is a great example of how people and processes have performed to be on the high-side of the growth of the franchise industry. According to the U.S. Department of Labor, the outlook for janitors and building cleaners is expected to grow as fast as 12 percent over the next eight years. This is the same rate at which the franchise industry as a whole is expected to grow through 2014, as reported by a recent FRANdata study. Why is the commercial cleaning industry experiencing success? While some of the growth can be attributed to the uptick in the economy and new construction, companies such as Jani-King incorporate cutting-edge practices into their training programs that are proved to be profitable, such as team cleaning. Team cleaning, the practice of assigning individual tasks to more than one person in an area, can be best utilized in buildings to improve production rates. Jani-King also embraces the implementation of better equipment for their franchisees. Microfiber technology improves production rates and cleanliness by enhancing cleaning power (less elbow-grease, less time) and reducing water and chemical usage. Embracing these items allows Jani-King franchisees to deliver better and faster service, resulting in improved profitability for the franchisee.

Utilizing New Techniques and Tools

What new techniques and tools can help your business? If you’re not knee-deep in researching the best products and most innovative practices in your industry, you need to be. New technology can be a tremendous springboard to profitability, but it’s also going to demand human and monetary resources.  It’s up to each franchisor to find the right tools for its business and invest in them. It’s absolutely important to have the mindset that you are not buying technology; rather you’re investing in the ultimate profitability of your company and franchisees. On the unit franchise level, there must be complete buy-in to your program. If a franchisee is trying to re-invent the wheel, it’s going to take that person much longer to get where he wants to go. Franchisors have typically already proved the shortest, most accurate route to success and franchisees should be willing to commit to that route. When franchisees turn off-road to explore their own path, they end up driving in circles and stalling profits. Clear, concise processes can also quickly lead to improved performance. There need not be three or four ways to complete a task. Create a single process, prove that it works efficiently and train the franchisee to follow that exact process for best results. When franchisees follow that process, they are not only reducing the amount of time it takes to become profitable, they are reducing mistakes, frustration and doubt in the franchisor’s system. Paying attention to every cost category is also essential for stretching profit margins. Knowing the ins and outs of costs such as product, labor, telephone, office supplies, etc. plays a decisive role in determining profits. Dive into the details of costs and you’ll see where the money is going. Not every franchisee is going to experience immediate success. Some may never experience the kind of results they dreamed of while others grow far beyond personal expectations. Each franchisee has its own goals and it’s important they are addressed up-front, are realistic and are in line with the overall goals of the franchisor. Having objectives that are on opposite ends of the spectrum will almost certainly lead to issues between the franchisee and franchisor. To be profitable and perform over the long-term, common goals must be agreed upon and both the franchisee and franchisor must do their part. Franchisors can help by providing access to information or programs that support a franchisee’s complete business such as payroll, insurance, specialized training or even business management. Those resources can be provided by the franchisor directly or in the form of business alliances with companies that offer those specific services. Franchisees are business owners. Their total buy-in of that reality combined with franchisor support is critical to all franchise companies. The key though is execution. For franchisees to realize greater profit margins, they must execute the proven game plan and communicate with franchisors when support is needed.

Jerry Crawford, CFE, is CEO and president of Jani-King International, Inc. and serves on the IFA board of directors.