BRAND BUILDING & MAINTAINING A WORLD-CLASS FRANCHISE

As franchisees are not supposed to ‘fiddle’ with the system, it compels franchisors to pro-actively strive towards improving customer satisfaction and to keep reinventing the business system with a particular focus on the value proposition to the end user. Franchisors have the obligation/duty to anticipate how the consumer landscape will look five years from now and to start developing an appropriate value proposition today. Changes in technology, communication and energy affect all businesses directly and indirectly — embrace the opportunity to optimise your business system at the back of these changes and don’t forget to involve franchisees in the process.

We recommend embracing digital means of communicating with your target market. Tomorrow’s customers — Millennials and the Z-generation — have a different set of references when it comes to communication and brand values. Appoint a competent and established, digitally-focused marketing agency to ensure that your brand is correctly positioned to appeal to its target market. Franchisors live inside their brands and as such don’t have the luxury of viewing their brands from an outsider’s perspective.

Culture is contagious; it should start with the CEO of the franchisor entity and filter right down to the franchise owners, employees and consumers of the brand. Cultivate a culture of compliance from day one by demanding adherence to even the most insignificant rules and resist the temptation to allow exceptions. People are the carriers of culture, so employ smartly, promote candour and be concise but fair in dealings with franchisees and your own staff. 

Being in business earlier is never worth more than holding out for the best possible location, even if it comes at a price. Always keep in mind that location is difficult and costly to change.

Quality brand presentations to landlords result in better location options and invitations, which translate into higher sales, ultimately impacting the value of the brand. 

The competency and attitude of franchisee and franchisor staff have an exponential effect on consumers’ perception of the brand. Employ the best you can afford and continue to invest in their development. It is particularly important that franchisees and their staff feel that they are able to trust the franchisor’s staff. If you, as franchisor, treat your staff well, and they treat franchisees well, who then treat their staff well then franchisees’ staff should ultimately also treat customers well. 

Recognition is a powerful motivator; devise and create opportunities to acknowledge and reward extraordinary performance. It is crucial to be consistent and fair in rewarding and acknowledging performance and the more transparent the process and the results, the better. Accepting sub-par performance signals that mediocrity is acceptable. It could be beneficial to adopt a strategy to purposefully rotate non-performers.

Franchisees must make money before the franchisor does, assuming an acceptable level of commitment, compliance and throughput generated by the franchisee. The franchisor’s business case is built on scale over time and should exclude rebates, whether disclosed or not. While marginal franchisees are not conducive to network growth and will deter prospective franchisees, the opposite is also true. Flourishing franchisees will speak about their success within their circles of influence.

Management is not possible without the ability to measure. Provide franchisees with a set of benchmarks on as many aspects of the business as possible and equip them with effective and user-friendly tools to measure their progress and status. Besides the tools to measure, the skills and disciplines required to use such tools are imperative and that comes through the astute choice and structured training of people.

As the Spur debacle has taught us, social media is powerful but ruthless — especially with high-profile brands. Unhappy customers now have the power to devastate a brand, so business owners must be proactive about defusing any situation that could lead to negative exposure as even one isolated incident could, ultimately, affect the entire brand network. 

 Protect your reputation at all costs, especially amongst the funding fraternity. The circle of funders in South Africa is small and they hold the key to network expansion. Don’t allow franchisees to damage your brand and no matter how much royalties they pay, never allow the tail to wag the dog.

Suppliers and service providers are underrated when it comes to assessing the value they contribute to the business system. Through their innovation and research, suppliers and service providers may hold the key to improving your brand’s value proposition to the end user. Actively manage the relationship between suppliers and franchisees and never take a passive approach to disputes between the two parties — it will come home to roost. Creating mechanisms for franchisees to rate suppliers and vice versa will do wonders to influence behaviour at both ends.

The franchisor-franchisee relationship will be tested, probably sooner than later. Every franchisee relationship goes through a J-curve when reality sets in and the honeymoon phase develops into a hangover. While some franchisees travel through the relationship maturing phases fast, others never survive, but those who complete the cycle will become a valuable brand asset. Good franchisee relationships cultivate tolerance on the side of the franchisee. Visit franchisees as often as possible, value their opinions and encourage openness. Don’t ever make promises you are not absolutely sure you will be able to honour and never rely on a franchise agreement to govern a relationship. Treat members of the national franchisee forum well as they have the ability to influence the network.

Choose franchisees for their attitude and willingness to learn rather than what they know. Keep growing your pool of suitable candidates and be deliberate in terminating relationships with poorly performing franchisees. The ability to secure funding should never be the qualifying criteria for entering a network, but sadly there are always franchisors for whom it is the only benchmark. Developing a franchisee through continuous exposure to trends, developments, brand culture and fellow franchisees operating in the same environment, is just as important as choosing the right franchisee.