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My franchisee is out of control
My question is: How do franchisors monitor the management style of the Franchisee?
Is the franchise operated domestically or internationally?
A critical success factor for most franchises is continuity and uniformity. These are descriptive terms that relate to good quality franchise operations. A franchisor knows these attributes do not come about by chance. They are the result of a passion for communication, constant training, review, supervision and care.
Franchises spend significant financial and people resources to ensure similarity across their network. They do this for customer satisfaction and familiarity, as well as allowing franchisor business operating systems to become more manageable. Customers expect the same products and services in each branded location they patronize. To compete and profit, both the franchisee and franchisor marketing promises must be kept for customers to remain advocates for the brand.
Control is the overriding component that guarantees both, and therefore a necessity in every franchise. Now, whether or not it is attended to is a different story. Why do some franchisors take time to nurture this critical business element while others do not? Simply stated, the best franchisors take a long term view of their business operation and they develop standards in a very methodical way to deliver quality systems. The marginal or poor franchise companies either don’t care about the franchise network quality or lack the wherewithal to achieve it. It takes time, money, desire and know-how to provide sound training and support, which in turn produces the desired control and a quality product delivery. In essence, control is not just about a legal contract, it is the result of attending to the numerous elements that reflect the franchisor’s personality, character, skills associated with organising and a decent bank account.
Of course, there are exceptions to strict operational controls in franchising. Traditionally, retail services, fashion and food franchises require high degrees of uniformity and control. What about personal and/or professional services like accounting and bookkeeping? Even within the same franchised bookkeeping network you will find a variety of software programs, client types and focus of services elements. The point being, is that control is critical, but quality franchising is dependent upon determining which items will be success factors and therefore must be controlled.
Lack of monitoring and control often leads to abuse of a franchised system, and this is an important issue. As is true in all things, the best, the brightest, and the most concerned with long-term success will create and use adequate programs to reach quality goals and objectives.
Good management systems that consist of adequate financing followed up with quality training, support and control activities with an overarching long game are a key to being a successful franchise that franchisees will want to buy. However in most cases, the overseer is an entity that has purchased (for significant capital) the rights to develop that region or country. Their investment would be in jeopardy if the franchisor’s system was not properly delivered or developed. Still, the key ingredient is the franchisor’s desire, ability and need to create and enforce control systems.
I hope when selecting a franchisor or franchisee, this helps you form the questions to ask before your purchase.
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Written by Chris Cooper
Who has owned and operated franchises and seen the benefits of good and not so good franchisors.