Three Relationships That Are Key to Success
Value is derived from a variety of areas within the organization. Understanding the value drivers is a critical component of ensuring long-term sustainability and success. The four key areas of focus, as outlined in “Building a Foundation to Weather the Storm” are relationships, lending, operations and leadership. Although leadership is one of the most important categories for long-term success, it is not the only one.
We discussed last time how leadership impacts value in the areas of generational management, recruiting and retention, successor identification, and development. This time, we are going to look at the area of relationships and drill down into how they impact the value of your franchise operations. As with any business operation, relationships are a critical piece of the complex multi-unit franchisee business puzzle. The franchise industry is one that relies on relationships more than many others because of the dependence on brand reputation and product quality.
Although there are a multitude of relationships that have impact on the success of a franchise, there are three that play directly into the value of your organization:
Franchisor – Developing a strong tie to your franchisor is critical to your ongoing success. One of the key things to look for with your franchisor is alignment of core values and what is their long-term growth and succession strategy. Ultimately, your business is impacted by the culture of the franchisor as they set the tone for marketing, branding, quality, and performance benchmarks. Ensuring there is alignment between your organization’s and the franchisor’s core values is essential to ensure your organization is not taken off track. Additionally, the same “succession” principals we often discuss in relation to multi-unit franchisee organizations apply to the franchisor. Does the franchisor have a short-term (3 to 5 year) strategic plan and do they have a long-term succession plan? Are they actively grooming leaders in the organization to take on key leadership roles? The sustainability of your franchise (investment) is highly dependent upon the sustainability of the franchisor’s business. Know where you stand as a franchisee before you set out to launch or expand. Ask questions, be involved and analyze the relationship return you receive from the franchisor.
Customer – The lifeline to the success of your multi-unit franchisee organization is in your customers. Brand loyalty and dependence on product quality are critical aspects. However, just as important, are the customer experience and the service that your locations provide to the customer. As an operator, you selected a franchise brand for specific reasons, and brand is traditionally one of the factors. Customers have learned behaviors based on their experiences with a brand, both positive and negative. As the franchisee and operator, it is upon you to deliver the service experience, in addition to the quality that will keep your customers loyal to your location.
Community – Sometimes forgotten by franchisees is the importance of the community relationships and their impact on success. Too often, customers and the community may see your franchise location as nothing more than a “big brand” in their town. There is a lack of understanding that as a franchise owner, you are a local business owner. Investing in your community and involving your team, stores, and yourself helps to bring awareness and drives loyalty.
Relationships, in any business, are one of the most important aspects of success. In the franchising business, they are critical to driving long-term value. Ensuring that your franchisor is invested, means that your investment will work for you. Delivering exceptional client service and constant product quality will keep your customers loyal. Investing in your community and in part, educating as much as you can that you are a local business owner will keep your community loyal to you. All combined, you protect yourself, your employees, and your brand portfolio through the ebbs and flows of the economy.
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