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Are you afraid to talk about your failures? Most of us are. But whether in business or in life, that’s how you learn and grow!
As a franchisor, you might want to believe that all of your franchisees are doing well and making the most of their investment. But the reality is that there is always going to be someone at the bottom. And if your brand has more than 100 units, there could be multiple owners who are struggling. It’s the law of averages; the bigger the brand, the more there are.
So now that we’ve acknowledged that these “problem” franchisees exist, the question becomes, What should we do about it?
No one awards a franchise to someone expecting them to struggle. Any ethical franchisor will provide their owners with quality and ongoing training and support. After all, it’s in your best interest for them to do well!
As much as you may want to ignore that a problem exists, you owe it to yourself and your franchisees to deal with the issue. Your first step, of course, is to provide these franchisees with the training and advice needed to turn their business around, and there are a wide range of possibilities! But you can only do so much. And if they aren’t implementing or responding to your attempts to help, or are now doing their own thing, you’ve reached a point where you must take action.
After you’ve exhausted all your typical internal efforts and ideas, your next step may be to work with a consultant who can, either individually or in a group setting, work directly with these struggling owners to get them back on track. The tough love, brutally honest, and difficult conversation goes something like this, “I respect you, I understand you, and I want to help you. It’s obvious that what you’re doing isn’t working. So we need to try something different.”
I’ve done this work before, and it’s never easy. Sometimes, it’s better for an objective outsider to come in with no baggage, no history… just a mission “to resolve the situation, peacefully.” As a neutral, third-party participant, I’ve helped franchisees and franchisors see the reality (not looking for blame!), and help them determine what steps they have to take to turn things around, as well as help them shift their attitude, if needed.
What comes next can get frustrating, disappointing, and sometimes even hostile (if you’re not careful), but in working with a number of brands over many years, I’ve found an approach or alternative path that gives the troubled franchisees the ability to get out or turn things around gracefully—and usually without legal action or other drama.
This path involves giving them five choices. They must choose, or the choice will be made for them. They must pick one of the following options.
Once you give them their options, give them some time to think about it. Then you can have a follow-up discussion about their choice to dive into the next steps. It’s not an easy decision for sure, but change has to happen. Struggling franchisees can’t be allowed to continue indefinitely. Not only is it an injustice to them, but also to the rest of the franchisees in the system and the brand. You, the franchisor, have the obligation and responsibility to deal with these situations. Ready or not, like it or not.
As a franchisor, it’s your responsibility to deal with these issues reasonably and individually as they come up. No two cases are exactly the same. These situations are difficult and can get ugly. People can be impossible, hurtful, blaming, nasty, and react with all kinds of drama. But you’ve got to see through that and stay focused on a reasonable resolution of the situation.
One solution that can be a helpful piece of this puzzle may be my Franchise Lifecycle Program, designed to give struggling franchisees some new perspective. This four-part video and coaching program is based on my 30 years of experience as both a franchisor and franchisee and is designed for any franchisee who wants to achieve that next level of success.
John Francis (aka Johnny Franchise) is a franchise advisor, speaker, and consultant. Having been both a franchisee and franchisor, he has a deep understanding of the issues both face. He says franchising is in his blood: his parents turned their family haircutting business into a 1,000-salon franchise empire. Learn more here or call 612-868-0745.