It's Complicated: Aligning stakeholders' many voices

A franchise system is a huge web of businesses, owners, associations, and executives with a wide range of experiences and responsibilities. A franchisor can have a complex departmental structure, operational divisions, corporate/platform parent companies, investors (private or public), franchise affiliates, non-franchise retail affiliates, and supplier affiliates. 

Large franchisees can be just as complex. A multi-unit, multi-brand owner group can have executive management and divisions based on brand affiliation, geography, or maybe traditional vs. non-traditional locations. They can have investors who influence operations or not. Some are family-run, some are partnerships, some are corporate-run, some are a mix of all those. Units can be managed individually or as groups. 

While this complexity might seem daunting, it’s also one of the strengths of the franchise model. Franchisees benefit from access to a wide range of resources and advisors who can provide valuable insights when making critical business decisions. Collaboration and knowledge sharing are fundamental components of the franchise ecosystem.

The IFA’s 2023 Annual Franchisee Survey underscores the significance of knowledge exchange, with 76% of franchisee respondents acknowledging it as a key strength of the franchise business model. Best practices are shared on various fronts, from strategies for navigating challenging labor markets to exploring opportunities with new brands. Events like industry conferences, including the Multi-Unit Franchising Conference, serve as fertile grounds for this exchange of ideas and experiences.

However, the very diversity and richness of the franchise ecosystem can also pose challenges in decision-making. The multitude of voices and perspectives can easily become a cacophony, making it difficult to discern the right course of action. 

To illustrate the complexity of decision-making within franchise systems, let’s examine a case study from the QSR industry. A couple of years ago, FRANdata produced a white paper for Comcast Business, seeking insights from executives in QSR systems regarding technology purchases. The study aimed to understand who the key decision-makers were in shaping brand-wide technology strategies and funding.

Each of the groups had varying degrees of influence, and their priorities could differ significantly. For instance, the franchisor’s technology department and executive office were seen as highly influential by some respondents, while others placed greater importance on advisory committees or multi-unit franchisees.

In an environment with so many different advisory groups, it’s imperative to navigate this complex landscape effectively. Decision-makers must follow a disciplined process that includes the following steps.

1) Defining needs. Clearly articulating the specific needs and objectives of the decision-making process is the first step. This helps in focusing efforts and aligning stakeholders.

2) Gathering data. Access to relevant data and information is crucial for making informed decisions. Suppliers, franchisors, and franchisees must collaborate to ensure that the right data is available and accessible.

3) Objective analysis. Objective analysis of information is paramount. Decision-makers should prioritize evidence-based decision-making and avoid biases that can cloud judgment.

4) Consensus building. Given the diversity of voices within the franchise ecosystem, consensus building is essential. This involves active communication, negotiation, and compromise to align stakeholders’ interests.

5) Iterative process. Decision-making in franchising is often an iterative process. It requires continuous monitoring, evaluation, and adaptation to changing circumstances.

Navigating the complex world of franchise decision-making is both an art and a science. The intricate web of businesses, owners, associations, and executives within franchise systems adds richness and depth to this landscape. While this can be challenging, it is also highly rewarding for those who understand how to harmonize the diverse perspectives and voices.

Market research plays a pivotal role in providing the insights needed to navigate this complex terrain effectively. It enables suppliers and decision-makers to cut through the noise, identify key influencers, and develop strategies that resonate with the varied stakeholders in the franchise ecosystem. In the ever-evolving landscape of franchising, market research is not just a tool. It’s the key to unlocking success and making smart decisions that drive growth and profitability.

Find the full whitepaper, “Technology in the Quick Service Restaurant Industry,” at business.comcast.com.

Paul Wilbur is COO of FRANdata where he is instrumental in building the company’s research and consulting framework. He manages the research, information management, marketing, and IT departments and plays an integral role in the strategic development of FRANdata’s suite of franchise solutions. Contact him at 703-740-4700.