Unique Selling Points (USP) and Competitive Advantages have long been recognized as the differentiating factors in selling a franchise offering. However, to ensure sustainability and ongoing success, core values of the franchise system is equally, if not more, important than the first two factors.
To succeed in this competitive franchising business, franchisors must position their concept attractively while offering compelling benefits to both customers and potential candidates. They must also create and establish a corporate culture within their internal team and franchisees to edge out their competition, positioning this culture as a strength of the organization.
“Dick Rennick, founder and former CEO of American Leak Detection, was named Entrepreneur of the Year at the 1998 IFA Convention. During the Convention, nearly 100 franchisees had flown in at their own expense to celebrate and validate their leader’s compassion, values, and relationships instilled within their system. Dick’s inspiring comments focused on his owners and employees, the builders of his successful franchise family. An explosive, standing ovation followed, bathing the general assembly in the infectious warmth of his franchise fans clapping, whistling, and cheering for their leader. This extraordinary ceremony of franchisors and franchisees has never been duplicated at an IFA convention in the past 25 years. Rennick also received the “Lifetime Achievement Award” in 2006 from the American Association of Franchisees and Dealers (AAFD), recognized for developing fair, franchisee-friendly franchise documents. Dick’s humanitarian actions expanded to the consumer population throughout the U.S. He founded and championed the Franchise Emergency Action Team (FEAT) of participating franchise systems that have donated many hours, services, and products to assist U.S. communities during times of disaster. He created culture, inspiration, and pride within his franchise organization, and made a difference giving back to the general population when it mattered most.”
What have you done to establish a corporate culture within your internal team and franchisees today? How are you edging out your competitors apart from your USPs and competitive advantages in your franchise offerings? How can you be “Dick Rennick” in your own market?
Give Credit When Credit Is Due
Everyone loves recognition. As a child, we love to be rewarded with commendation from parents and teachers when we do well in exams. As an employee, we smile and feel good when our bosses commend us for a job welldone. Why should a franchisee feel any different?
Show your franchisee that you care and show it with actual actions. These can be done via a number of ways: Newsletters, emails, meetings, conventions, phone calls, personal letters, and “Franchisee of-the-month” awards are various avenues to show their contributions and a job well-done. Reward them for their extraordinary efforts and share their winning ways with the rest of the team on how they have achieved their targets.
Franchisees love the idea of joining a franchise system akin to joining a family whose members share and exchange ideas and best practices amongst each other, to grow the brand together. Franchisor and franchisees should operate on a “We” mentality and not a “Me-versus-them” structure. “We” and the concept of independent yet part of a team” is certainly a USP, competitive advantage and a core value of franchising since its inception.
There had been endless incidents and case studies on franchisees (master and unit), disillusioned by bright promises of cohesion and family spirit from Franchisors during the initial signing, but left the “family” when their efforts and contributions are deemed insignificant or due credit was not given after long periods. These franchisees eventually sold off their rights and started their own franchise program. Never lose touch with your franchisees, no matter how large your system becomes!
Recognition Powers the System
Ever wondered why “Star Franchisee” often gets better and better? The reason is that the power of recognition oftenmotivates franchisees to achieve greater accomplishments and give back more to the system.
This is similar to how top performing students are almost always the ones who share the most with their peers, are there to guide and coach their friends before the major exams, and yet, still emerge as the star performer of the day. As “Star Franchisee” shares with new and aspiring franchisees, they are also learning from these new franchisees on how to make the business and system better. Sharing and learning from each other reinforces their overall contribution and commitment to Franchisor and customers, thus making them better each day.
Franchisor always refers potential candidates and underperforming franchisees to “Star Franchisee”, to convince them to become a franchisee and to improve their performance respectively. It is easy to understand why the Franchisor does so, but for these “Star Franchisee”, they view it not so much as a corporate obligations, but also the opportunity to share and reinforce their practices and beliefs.
Balancing the Relationship
Franchisors and franchisees will always face the challenge of living harmoniously in two business worlds that are not quite the same. As small business owners, franchisees must make compromises for the strength of the national network and brand. Likewise, Franchisor must also be sensitive to the genuine needs of its franchisees. Swiftly addressing issues as a team and creating solutions for the benefits of both parties are key building blocks for establishing franchisee and franchisor satisfaction.
Franchisors should not jump to the conclusion that franchisees are operating against their interest. Distrust and termination often occur once the parties tip the balance in their own favor. Costly lawsuits do not benefit both parties on the ends of this balance scale.
Happy Franchisees Equate to Successful Franchise
Franchisees get excited by franchise organizations that listen to their customers and align their services and values with what’s important to these customers. Franchisees are the Franchisor’s customers. More so, they are also the ambassador, the sales person, the champions of every successful Franchisor. It’s all about the experience, not the transaction. Inspired franchisees proudly tout their victories to inquiring prospects who want to know why customers are so attracted to their business. Let these franchisees be your voices today!
Self-assessment by the Franchisees
Make periodic visits to see how your franchisees are faring. Your Franchise Agreement must have stated the minimum number of visits per year which you are obligated to visit your franchisees. Understand their issues and concerns during these visits, as well as their opinions of the relationship. Don’t just focus on sales and profits. If you don’t know where you stand with your franchisees, how can you effectively respond to their needs and interests?
Alternatively, Franchisor may adopt franchise development surveys as feedback tools that allow “your franchisees” to communicate formally with you, similar to an employee appraisal. They are easy to develop, administer, and analyze. But beware: Don’t ask owners what they think if you aren’t going to respond to their input. Surveys can be extensive or limited, depending on what feedback you are seeking from your franchisees.
Consider hiring an outside firm or qualified individual to conduct the interviews. An outside firm builds credibility with your franchisees and can be more objective in gathering information. Their third-party relationship usually makes franchisees more comfortable in expressing what they really think about the franchise. Also, the project will be completed much faster, while allowing your own operations to attend to more pressing daily activities.
Gary Loh is the Director of Purpleclay Consulting Pte Ltd, which is a franchise consultancy firm and grant application specialist. Purpleclay Consulting has assisted many promising franchise brands for local and overseas expansion, as well as assisting these brands in winning various business accolades and awards.
This company is an approved SCOPE-IP Business Consultant under the Intellectual Property Office of Singapore (IPOS) and an I-Advisor under International Enterprise Singapore (IE Singapore).
Gary can be reached at +65 6561 3011 or email at firstname.lastname@example.org. For more information, visit www.purpleclay.com.sg