A 3-Step Plan to Ensure Franchisee Success in 2021-Step 1: Franchisee Engagement
If you’re like many franchise leaders, you’re currently in the midst of planning for the upcoming year. Given the challenges of 2020, it’s more important than ever to take several key steps before the year ends to set up your brand and individual franchisees for success.
Over the next several weeks, we’ll share our top franchise planning recommendations on how to prepare for 2021 to improve the visibility of your brand’s results, gain insights into franchisee behavior, and improve processes to drive efficiency. By focusing on these key items, you’ll boost franchisee performance, achieve franchisee satisfaction, ensure franchisee compliance, and drive engagement and alignment.
The first step in this 3-part series focuses on franchisee engagement. To achieve your goals in 2021, you and your franchisees must start the year on the same page. With that in mind, it’s critical to communicate with your franchisees about the upcoming year, including goals, budgets, and more. Here are two key ways to engage with your franchisees now, to make sure they’re positioned for success in 2021.
1) Speak with every franchisee before the end of the year
Having your executive management team personally check in on franchisees between now and the end of the year won’t take much time — but it will likely produce the greatest ROI of almost any investment or activity you can undertake. A simple call will go a long way in showing your level of commitment and in conveying how much you value your franchisees. The insights you’ll uncover can be critical for the budgeting process.
This should not be a time to inform your franchisees about all the great things you’re doing on their behalf, but rather an opportunity to ask your franchisees to share their hopes and dreams, highs and lows, and how they are doing in their personal operations. Though you likely have franchise business consultants (FBCs) that initiate these conversations on a frequent basis, it makes a difference when these calls come from the executive management team.
You probably remember episodes of “Undercover Boss” where an executive of the company would go disguised into multiple locations to learn what was really going on in the field. While doing this can be an expensive and unscalable endeavor, by establishing these same touch points through phone calls, your franchisees will be genuinely moved that you care enough to take the time to hear how they are doing. You’ll have the opportunity to offer advice and ensure that they receive the training and support they need to move forward in times of uncertainty. Most important, you’ll come away with a SWOT analysis that will help you construct your 2021 budget based on systemic needs, while your COO/VP of Ops/FBCs will have the basis for coaching your franchisees in situational instances where there is a financial or performance delta to be bridged.
Another effective way to capture these invaluable insights can be achieved by using third-party companies, such as Franchise Business Review and Franchise Research Institute, which are able to turn the voice of the franchisees into actionable data. Again, the key is to get objective feedback on the health of your franchise culture, and from your franchise support managers about the resources and services most and least valued by your franchisees. You’ll also have the opportunity to gauge if franchisees are recommending the franchise, and also measure franchisee intentions to sell their business so you can minimize any impacts.
2) Help your franchisees budget for success
In surveys we conducted with franchisors in early 2020, 80% said their biggest challenge in helping their franchisees improve their performance was a lack of business and/or marketing plans. At the end of the day, franchise recruiting, satisfaction, and retention all are contingent upon franchisee profitability. With so much uncertainty in the days ahead, franchisors must lay the foundation for success in 2021 through leadership in the budgeting process to help franchisees actively engage in situational budgeting. That engagement is critical. In a study conducted by Ingage Consulting and Franchise Business Review, engaged franchisees were 3.7 times more profitable than non-engaged franchisees.
Defining your process
Every franchise system has franchisees performing at different levels, especially when you consider their strengths, weaknesses, time in business, store types, etc. But despite those differences, you can — and should — have a defined process you can use to address the varied results from location to location and region to region.
Whether you’re aiming to complete a sales plan, marketing plan, margin plan, or overhead plan, you will need an evaluation process (as mentioned above), as well as a comprehensive review of the top 10 KPIs needed to drive success on a franchisee-by-franchisee basis. To boost franchisee performance, you must equip them to monitor trends and identify what they are doing well and what may need improvement.
With that in mind, we recommend having a process-driven playbook to provide to franchisees. Your playbook should include where and how to identify KPIs aligned with your goals (e.g., cost of goods sold, revenue, or cost structures that are out of balance). You will use these KPIs to develop franchisee sales plans, marketing plans, and margin plans, as well as your budget.
The whole point of the budget is to identify and mutually agree on what the priorities are, where franchisees want to make changes, and what they want to fix. You’ll need to have your franchisees describe the change they desire and how they’re going to do it. Before the budget can be finalized, the franchisee must acknowledge and agree to each of these areas. This is applicable to all franchise industry types and segment sizes to educate and create engagement with franchisees throughout and beyond the budgeting process.
If you don’t already have a budgeting playbook to provide to your franchisees, download The Franchise Budgeting Playbook: Your Roadmap to Unit-Level Profitability.
Editor’s Note: This article originally appeared on FranConnect’s website and is used here with permission.
Keith Gerson is President of Franchise Operations at FranConnect, a recognized leader in franchise management software. For the past decade, he has worked closely with executive boards and leadership teams that are part of the company’s portfolio of more than 800 brands and 150,000 locations, with a focus on helping franchisors achieve their desired goals in sales, operations, and marketing. For more information, best practices, and guides, visit the company’s Resources Page.
Share this Feature
Comments:comments powered by Disqus
- Multi-Unit Franchising
- Get Started in Franchising
- Open New Units
- Featured Franchise Stories