The Pandemic Didn’t Create Your Franchise Operations Headache, It Just Made It Worse.

So, What Can You Do Now?

COVID-19 has disrupted franchising like no other event in modern history. Nearly every size company in every sector is dealing with new operational issues spanning safety, compliance, customer acquisition and other drivers of performance. But with so much attention focused on day-to-day changes and survival, many businesses aren’t able to address serious operational pre-existing conditions. It’s necessary to examine the state of Franchise Operations 6 months ago to pinpoint cracks in the foundation, many of which must be addressed to help survive the recovery period.

In a January 2020 survey conducted by FranConnect of nearly 250 operations professionals representing brands with greater than 100 locations, it was evident that franchise operations teams were already struggling to drive the unit level success of their franchisees.

The first question that we asked was “What is your biggest challenge in helping your Franchisees to improve their performance” and 96% of respondents identified the following symptoms:

  • We don’t get enough time with our franchisees.
  • Ineffective systems for following up on audit and visitation findings.
  • Our franchisees do not have their own business or marketing plans in place.

The second question was “Are your franchise business consultants’ communications and visit frequency enough to positively impact your franchisees performance?” 72% of respondents answered with a resounding NO.

The third question – “Does everyone in your organization understand the top 3-5 operations activities that have the greatest impact on your franchisees business goals and profits?” Once again, the majority of respondents (52%) answered NO.

Additionally, in a Bain and Company large scale study of business leaders on the topic of organizational change found that:

  • Only 15% could name one of three top goals
  • 87% had no clear idea on actions
  • 81% surveyed not held accountable for progress on the organization’s goals

Given that the defined role of the operations consultant is having the responsibility to:

  • Drive franchisee performance
  • Drive Franchisee satisfaction
  • Ensure Franchisee compliance
  • Create engagement & alignment

“So, how’s that working for you?” Given the survey responses, one could conclude that this was and likely remains a “systemic pandemic”. To help solve for this, we’ve got to clearly identify the situation and problem so that we can move beyond treating the symptoms to the addressing actual root cause.

First recognize that one of the major issues is that Franchisees are too busy working "IN their business” rather than “ON their business”. As you can see from this visual, there are literally 22 job functions that are owned by the franchisee day in and day out that divides their time and focus.

Pandemic-Franchise-Operations

Additionally, the average number of franchise technologies that a Franchisee is expected to use is ranging from 8 – 12 different software tools. And to further exasperate the problem, very little of that data that is being captured is linked together making it nearly impossible to link data to insights and actions.

As a franchisor, we need to recognize that it may not be your fault –but it is your problem! So, what’s one to do? Here’s a short checklist of action items to move your organization in the right direction:

  1. Initiate a formal training program for your Operations Consultants & Field Staff. How much training do your Operations Consultants get in behavioral management & coaching for improving performance? If you look at your training curriculum, you’re likely find that very little time is spent on your Franchise Business Consultant’s development in the area of how to “coach franchisees” on performance improvement, or conducting difficult discussions. There are solid programs and subject matter experts that exist on how to handle difficult situations and challenging discussions. Recommended reading is Coaching for Improved Work Performance by Ferdinand F. Fournies.

  2. Make sure your Franchise Business Consultants work closely with their Franchisees to collaborate on updating business and marketing plans. These should be the basis for all coaching discussions as the business plan and marketing plans. These plans should consist of goals which are SMART:
    • Specific (simple, sensible, significant).
    • Measurable (meaningful, motivating).
    • Achievable (agreed, attainable).
    • Relevant (reasonable, realistic and resourced, results-based).
    • Time bound (time-based, time limited, time/cost limited, timely, time-sensitive).
    You’ll find that it’s far easier to coach a franchisee on goals they’ve generated (with your assistance) as opposed to those that you attempt to impose upon them.

  3. Consider the implementation of a tiered support structure. It’s not likely that a Franchise Business Consultant possesses all the performance skillsets required to support franchisees from onboarding through the complex issues facing multi-generational owners, or specialized areas such as business valuation, etc. Some progressive Franchisors will provide a different coach for each step of the franchisee journey from a Right-Start Specialist for a new Franchisee to a skilled Financial Manager for working with your top-tier performers.

  4. Compel your Franchisees to submit P&L’s on a monthly basis. You may not have the contractual right to compel them, but if you’re able to provide them value-added insights on how to improve their revenues and profitability, you’ll have a greater likelihood of buy-in.

  5. Leverage Franchisee Peer Groups to improve results and accountability.  Many franchisors have found great success in getting their franchisees focused on achieving results and accountability is achieved through franchise peer performance groups. Useful information on putting together PPG’s can be found in the book Disrupt from Within by Justin Walt available on Amazon.com.

  6. Establish Engagement Metrics as one of your critical elements in determining franchise success. According to the experts at Ingage Consulting and Franchise Business Review, they were able to demonstrate that creating avenues for active participation is key as franchisees that see themselves as an active participant are 6.6 times more likely to be engaged.

  7. Have a readily available playbook made up of the top 3-5 actions that need to be taken on each of the prioritized areas that you believe your Franchisees should be focused on.

  8. Have a system in place that allows you to receive real-time information on your franchisees critical key performance indicators. The challenge often-times is that the KPI’s that are selected are lagging indicators, and you’re missing timely feedback on the leading indicators that would effectively give you the time to address issues prior to missing your goals/objectives.

  9. Ensure that you have an open technology platform that can permit you to import all of your key metrics from disparate systems (including your POS, NPS, QuickBooks, etc.) into a Command Center or centralized dashboard where all of your data can be viewed against your goals, insights and required actions.

    Such a solution exists with FranConnect’s new Operations solution which includes the means to:
    1. Create dynamic digital playbooks that are designed to ensure that critical activities are being executed, and the means to identify and coach in real-time if they are not.
    2. Making your teams and units efficient by effective information sharing and centralization of your operational elements.
    3. Increasing stakeholder transparency and accountability to achieve consistent and coordinated efforts across various business processes/procedures.
    4. Providing easy access to actionable insights with an ability to perform peer group analysis.
    5. Helping you gain competitive advantage by being agile, learn and adjust quickly to scale your business operations.

How can FranConnect help?

FranConnect’s Operations software solution allows franchisees to develop and install their business and marketing plans, and the technology enables the analysis of all the relevant data (including your POS, NPS, QuickBooks or other financial data, etc., in real-time. It then introduces dynamic playbooks that are the best practices for resolving shortfalls in performance and tracks a franchisees execution against those plans. To simplify, you’ll have the ability to look at your complete portfolio; the ability to segment your portfolio into peer performance groups, franchisees by time in business, single unit operators vs. multi-unit operators; measure all KPI’s in one centralized location and to drill down to the unit level to help them achieve their potential.

To learn about how to initiate the best practices in solving your execution challenges and achieve consistently improved unit level success, request a demo to see FranConnect’s all new Operations solution.

 

About the Author

Keith Gerson

Keith Gerson

Keith Gerson, CFE is the President of Franchise Operations at FranConnect. Keith brings 40+ years of executive level expertise as a passionate and driven Franchisor and Franchisee with a proven track-record in building rapid-growth, and highly profitable franchise organizations. For nearly the past decade, Keith has worked closely with numerous Executive Boards and Leadership Teams that are part of FranConnect’s portfolio of 800+ brands and 150,000 locations. His focus is on helping franchisors to get to their desired future state in sales, operations, and marketing. Recognized in franchising circles for his extensive leadership experience, and ability to drive execution, Keith is a highly rated keynote speaker and author. He has had the rare opportunity to create several leading franchise systems from inception through launch and sustained growth into successful enterprise level brands.

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