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You got to care for your kids!
You got to care for your kids!
By Nickolas James on April 22, 2009
Choosing and caring for franchisees
Happy families are the product of good parenting – and the same goes for successful franchises. Says Nickolas James.
Any parent will tell you how amazing it is to see theirchildren develop very different personality traits, even though they wereconceived from the same parental genes. Parents will also talk about theirchildren to complete strangers with a very noticeable love in their voices andgiven the opportunity, will proudly recount their child’s achievements andcharacteristics.
Franchisors have a lot to learn from parents. They need tounderstand that to be successful in nurturing franchisees, in developing their“special” commercial relationship with each one, they must develop those samecaring, proud parent feelings.
The culture of caring
That caring culture stars at the very beginning of thefranchisor/franchisee relationship. This is why we stress at how fundamentallyimportant the franchisee selection process is.
Many descriptions or labels have been used to define theuniqueness of a franchise relationship, but the one we think is most apt is‘adoption agency’. The franchisor wants to be a ‘parent’, and after muchthought goes to the orphanage to seek a ‘child’ they want to ‘adopt’. Theyobviously want a child they can relate to and like, and one they genuinelybelieve will take instructions on how to grow and benefit from living by theirset of operational guidelines.
Franchisees are not typically leaders, and are in fact teamplayers happy to follow a proven business method because most of them have notbeen in business on their own before. They look to the franchisor to providethat all important ‘security blanket’ to avoid the risk of possible failure.
These potential franchisees are trying to find a franchisor(‘parent’) who has the type of business they can relate to and a businesssystem which has a proven growth path where the franchisor can provide strongguidance and lead by example. The franchisor, whether or not they say it upfront before the potential franchisee signs the franchise contract, ispromising to be a personal mentor and guardian. Unfortunately we’ve seen plentyof evidence over the years that show many franchisors do not really understandthis part of the deal.
A franchisee thinks that their decision to buy the franchisemeans they have significantly reduce the risk to them in starting up abusiness, they think franchisor, like a loving parent, will be there for themwhen they take the first steps and learn all the new skills that will enablethem to cope with their totally new small business with its different stressesand working environment.
Why do franchisingfamilies break down?
Many new franchisees become disillusioned with thefranchisor over the most basic issues – and it’s interesting to see how much ofthis could be avoided simply by a franchisor showing a bit more imagination andempathy, and understanding the need to keep communication going all the time -just like a parent! These are a sample of the claims made during some of theunhappy franchisee matters we have advised on:
- The franchisor did not even show up on the firstday our shop opened.
- The only time we hear from them is when theywant money.
- They are never available; they seem to spendtheir life in bloody meetings.
Communication is also an issue in the following claims:
- The training was supposed to be for three weeks,we received just two days!
- The franchisor wants to charge me a new fee ontop of my weekly management fee when we want to help to train out new staff.
- The franchisor gets a secret rebate fromsuppliers.
There may be good reasons for these happenings, but thefranchisees obviously felt they were being kept in the dark, which led them tofeeling cheated. Two other claims suggest that the franchisor involved reallyneeds to have a close look at whether they are suited to their ‘parent’ role inthe industry:
- They told us we would do very well financially;we’ll be lucky to last the year out.
- The franchisor just does not know how to helpsolve my problems any time I have asked for real help.
If enough issues remain unsolved, we end up with thesedespairing cries:
- I would not trust them NOW.
- I hate this business; it’s not really what Ithought it would be.
A good parent would not let the situation get to this stage.Franchisors who do will find that franchisees, like kids, will soon startwondering, does Mum/Dad know best?
Parentingresponsibilities
We don’t expect all franchisors to love their own children.Bus that biblical advice ‘treat others the way you in turn would like to betreated’ seems to be tailor made for the ‘culture of caring’ which we believehas to be the professional franchisors golden rule. So let’s look at how webelieve a professional franchisor builds that culture with each and every newfranchisee.
Step 1 – Adopt withcare
Be picky when it comes to choosing who you’ll ‘adopt’ as afranchisee. After all, it’s your name and trading reputation at risk if thefranchisee stuffs up. Don’t give your hard earned image and business reputationto just anyone – particularly anyone who is silly enough to want to pay for itwithout doing some serious investigation and homework on their own first. Webelieve most Australian franchisors are in far too much of a rush to sign upfranchisees without first really getting to know the applicant’s personalstrengths and weaknesses. Let’s face it, we all have some weaknesses, but aregenerally very reluctant to admit them!
Most people inquiring about a franchise are really eithernot ready to buy or have not given enough serious thought to the practicalitiesand realities of small business and all the commercial risks involved. We alsocounsel franchisors to avoid putting pressure on potential franchisees to signup. It’s a brave franchisor who is prepared to point out, up front, how hardthe initial start up period can be for the franchisee, but this sort ofapproach is crucial to establishing the credibility and honesty that arecritical to the long-term success of the franchisor/franchisee relationship.
It’s true to say that, at this stage of the game,franchisees are often their own worst enemies and, tempted by what theyperceive as easy dollars, develop selective hearing. This makes it even moreimportant for the franchisor to take the role of the concerned parentseriously, and evaluate every potential franchisee as if they were adoptingthem into their own family.
Although legally each franchise is a separate business, thereality is that the franchisor must accept ultimate responsibility for thefranchisee’s success or failure. The franchisor has to be a teacher, mentor,friend and role model. If the franchisee is not a hard worker, good listenerand not prepared to follow the business system, or has traits which make a professionalworking relationship difficult, the franchisor may not try as hard to help thatfranchisee, and from then on it’s a downward spiral of resentment.
Yes, we believe that, whatever goes wrong in this uniquepersonal relationship, the franchisor must act without blaming the franchisee,I know that is a bitter pill to swallow, and we can almost hear franchisorscrying out “Geez, surely it takes two to tango; it can’t always be our fault ifthe franchisee gets into trouble!”. Butremember this, the franchisor is the self-appointed leader who chooses eachfranchisee, trains them initially and then provides ongoing monitoring,training and management advice.
So guys, if the franchisee is not working out, look in yourmirror first. It’s your ultimate responsibility to weed the garden. You can’tpick a winner every time but you can recognise weakness and do something aboutit. Leave it, and it will just get worse. Which takes us back to the question,how well did you really get to know the franchisee before you signed them up?
Step 2 – be firm butfair
We tell our new franchisor clients to expect four distinctphases in each new franchisee relationship, and show them how to identify thesigns of change as the franchisees move through each phase. The franchisor mustbe in total control and have a steel backbone to manage those changes. A happy franchiseeis quite prepared to take direction and close guidance because they respect thefranchisor and can clearly see the bottom line profit results that will follow.A professional franchisor enjoys relating to their franchisees and is proud oftheir individual achievements. Sounds just like your parents, doesn’t it? Thereward is that a strongly performing company model does wonders for afranchisor’s own respect and commercial credibility.
As a franchisor you will be judged by your franchise familyevery time they pay you the management fees and advertising levy. They mustfeel they are receiving value for money all the time. They must enjoy dealingwith your management team. They will then be prepared to work together to builda stronger system so the whole family will prosper.
Step 3 – get theright advice
Consult a professional franchise advisor who is brave enoughto tell you all the franchise facts, whether you want to hear them or not.Don’t let your ego get in the way, seek out quality advice and be prepared topay for it.