A franchisor leader needs to take care to be sufficiently detailed, consistent and specific in their communications and interactions with franchisees, whether by email, face-to-face discussion, presentation, agreements or follow-up. The formal nature of franchising means that detail and precision is needed. After all, franchise systems are governed by a formal framework, with the franchise relationship first defined by the franchise agreement. The legal franchise agreement framework is then complimented by a business system, typically captured within franchise manuals and …
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Long-Term Communication & Support Plan
Franchise systems need to have a franchisee communication and support plan that details what will happen and when. The franchisee support and communication plan should cover the multitude of elements relating to the franchise, like: Franchise conferences and regional meetings Field visits, ongoing training and business reviews Business and marketing planning and approval dates Audits, assessments and awards Franchise newsletters and updates The communication and support plan needs to be sufficiently planned, and structured, but ideally, in advance (i.e., long …
Working With Valid Data
"Garbage in, garbage out" or 'GIGO' is the phrase and acronym originating in Computer Science to explain the only too-common phenomena of outputs or arguments being flawed if their original premise or data was wrong. Best practice franchisors will ensure data collected for use is valid. Franchise systems and other chain organisations can benefit hugely from data, analytics and business intelligence. The replication of a business model in multiple locations with, in turn, hundreds or thousands of customers and associated business, financial and customer data, lends itself …
Franchise Support Office Structure Aligned
Franchisors operate in a range of industries, and even those within the same sector can pursue a different strategic approach. That legitimately means the exact Franchise Support Office structure for one organisation may well differ from that of a direct competitor (of a similar size) - and for good reason. Notwithstanding, we know from our work planning, reviewing and improving many franchisor companies, of all different sizes and backgrounds, that there can be a gap between a franchisor's situation and plans, and the structure and operations of the Franchise Support …
Field Managers as Business Consultants
Field managers need to wear many hats and fulfil multiple roles. We have for many years been helping franchisors transition their field visit purpose and field manager capability toward adding a ‘Business Consultants’ role, capable of engaging with, and positively influencing, franchisees at a ‘business’ level. It is a generalisation but also a fact, based on our experience reviewing and improving many franchise systems, and training many field managers, that the field manager role has historically focused more on compliance and sales development than a holistic view …
Clear Field Visit Objectives
Field visits need to have clear objectives to maximise their potential and drive impactful outcomes. With multiple field managers, clear objectives are also important in order to deliver consistent, coordinated support and harness efficiencies (e.g., in preparation and approach). Because on field visits, like many other aspects of the business, where there are almost infinite things you could work on or talk about with a franchisee, focus needs to be both directed and constrained for its greatest impact. Clear objectives enable the field manager (and franchisee) to narrow …
Franchising 2019 Starts With a Hint of Optimism
Click [here] for a copy of the full report KEY HIGHLIGHTS Franchize Consultants (NZ) Ltd Media Release KEY HIGHLIGHTS The Franchize Consultants’ January 2019 Franchising Confidence Index demonstrates cautious sentiment in some areas whilst neutral in others. • Franchisors sentiment toward general business conditions, whilst still negative, improved to be similar to January 2018 results with Franchisors at net negative 3% and Service Providers at net 19%. • Franchisors sentiment for franchisor growth prospects also saw improved sentiment after dropping …
Measure and Manage Customer Satisfaction
Customer satisfaction is critical for business and franchise networks. The importance and logic could not be more clearly stated than by the late Sam Walton, founder of Walmart: "There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else." It follows that measuring customer satisfaction should be a high-priority for franchisors. Understanding customer satisfaction at the franchisor or group level and the franchisee level should be of paramount importance. After all, customer …
Franchise Technology Plan
Today technology is such a vital and important area with the power to inform, innovate, improve, power or even disrupt a business – the latter for which those previously involved in video rental, book retail and photo development businesses would attest. Consider the following technology areas as examples: Accounting, E-Commerce, POS, Analytics, CRM, Apps, Benchmarking, Artificial Intelligence, Augmented Reality, Voice Recognition, Social Media, Phones, Computers/Tablets, Vehicles, Printing, Security and Search. Accordingly, these technologies variously bring associated …
Demonstrate Strategic Thinking Leadership Characteristic
Great franchisors need to demonstrate a number of important characteristics as part of their leadership. We believe sound strategic thinking is one such critical leadership characteristic - and that franchisors should strive to provide franchisees with confidence in this area. While one could argue strategy and change (given today's dynamic environment) have never been more important, research also tells us that one of the aspects attracting franchisees to buying a franchise is the concept of having an established and proven business model - encompassing direction for the …
Economic Model Review
A periodic review of a franchise system's economic model is important - to ensure it is optimal, for both franchisor and franchisees alike, for the future. Examples of key fee areas or sources of revenue under consideration should include: Initial franchise premiums or fees Franchise royalties Wholesale margin and/or supplier rebates Local marketing fees Group marketing fees Renewal fees Assignment / transfer fees Other fees, such as conference levies, technology fees, and so on. Decisions on fees and how they are calculated are important as they impact …
Regular Performance Monitoring and Review Cycle
This best practice speaks to the importance of establishing and managing a regular performance monitoring and review cycle. Management thinker Peter Druker famously said “If You Can’t Measure It, You Can’t Improve It.” What he was understood to mean is that you can’t know whether or not you are successful unless success is defined and tracked. The corollary for franchising is, as for other forms of business, while it is important to measure a range of KPIs, they are of limited use unless they are measured and reviewed on a consistent basis. A franchising company needs to …
Franchising Right From The Start
Franchising is a long-term business strategy, from the franchisor and franchisee perspective. Both parties are bound by a long-term contractual agreement, meaning early decisions on the nature of the franchise structure have long-term consequences. For some companies assessing franchising properly in the first place means they don't franchise at all. For others that do franchise, there can be a big difference between those who prepare and plan properly as compared to those who take shortcuts. Typical shortcomings when vital stages are missed: The company is likely to …
Regular Action Planning
Franchise systems are complex organisations where active action planning throughout is much needed, and for many reasons. Not least, franchisors and franchisees have obligations and performance standards relating to one another - that need to be met. Franchise systems are the perfect environment where there is a need to get a whole lot of stuff done, involving multiple people, departments and entities. Consider franchisees with their objectives, the franchisor, field managers, suppliers and so on. Plus, everyone needs to be coordinated - and in franchise systems there can …
Good Franchisor Presentation Skills
Franchisor staff presentations, play an important role in achieving conference and important other objectives – like respect for franchisor leadership. And the better the staff presentation skills, the more likely those objectives will be met. Using conferences as a case in point, we note the importance of franchisor staff presenting well. We have been involved in numerous conferences and have seen a wide variation in abilities, including from some very senior business people. The difference in presentation skills really can mean the difference between a compelling …
Present & Discuss Benchmarking Results
Franchise company approaches to benchmarking varies. At the lesser end of the spectrum, franchisors may benchmark a little; for example, only high-level sales results. At the greater end, by contrast, franchisors may benchmark a lot; such as, sales and sales composition, labour, gross profit and expenses, and a wide range of productivity and/or non-financial (e.g., customer satisfaction) metrics. Availability and communication of benchmarked metrics, in our experience, will also vary from real-time (i.e., right in the moment), through to hourly, daily, weekly, monthly, …
Long-Term Brand Positioning
Many people think of franchise systems as marketing machines. Yet not all companies have a clear brand positioning strategy. As a consequence, some struggle to gain franchisee engagement and confidence in both brand and marketing execution. Issues often manifest in group marketing fund discussions where, to franchisees, decisions maybe questioned, planning appears short-term, and reporting maybe infrequent or light. In our experience, a step back is often needed, to think about what sits behind both marketing and franchisee operational execution. At a basic level a clear …
Join Your Franchise Association
As a franchisor you should be a member of your local franchise association, for the benefit of your franchisees, the franchising business model and, as a by-product, the long-term value and sustainability of your own business. Joining your country’s franchise association is especially important in self- regulated countries like New Zealand, where (among other functions) the franchise association plays a vital role in establishing, developing and protecting franchising standards. In New Zealand, all members are required to adhere to a specific Code of Practice and Code of …
Group Marketing Fund Reporting
We will never forget a small franchise network's conference when the marketing report was delivered and discussed. The report covered the opening balance, the income and expenditure, and the closing balance. Basically, the fund received and spent $150,000 in the same year. The expenditure was explained: $50,000 on radio $50,000 on Google Ads $50,000 on print advertising The number of inquiries, resulting jobs and the ad spend/job were presented alongside each spend. It was abundantly clear where the money had been spent and also how effective each medium had …
Franchisor Business Sentiment Challenging
Click [here] for a copy of the full report KEY HIGHLIGHTS The Franchize Consultants’ October 2018 Franchising Confidence Index continues to suggest a challenging outlook, as perceived by responding franchisors. Franchisors’ sentiment towards general business conditions dropped, after lifting very slightly last quarter, from net negative 9% to net negative 22%. Service Providers sentiment showed a mirror effect dipping to net negative 23% from a net negative 7%. Franchisor sentiment toward franchisor growth prospects remained in positive …
Comprehensive Franchisor Business Plan
A franchisor needs to have a comprehensive 'franchisor' business plan. A franchisor business plan is different from a conventional business plan because there are a number of additional and unique elements associated with being a franchising company. Think of the need to consider the following: Franchisee performance and its importance and potential contribution to the franchisor and franchise system performance, and potential scale efficiencies and value-add. Franchisee satisfaction and sentiment and how this can contribute to sustained franchise growth, innovation, …
Consistent Field Visit Visitation
Field visits are an important part of a franchisor’s communication, support and development plan. Within this plan, established franchisees should receive a consistent and appropriate level of field visit visitation. We identify consistent visitation because we sometimes observe field visit frequency based more on close proximity and friendliness (coupled with an appreciation for drinking coffee) than practical need and equity. At its most extreme case, we have observed a franchise system where some franchisees were visited weekly while others waited 18 months! It is easy …
Franchisee Business Planning
We regard franchisee business planning as a critical franchise system management process and it is a process with references in many Franchise Agreements. Yet, not many franchisors encourage or engage in comprehensive franchisee business planning with all of their franchisees. In other best practices we talk about a leadership focus on franchisee profit. Franchisee business planning is hugely central to this franchisee profit focus. That is because you cannot have a meaningful focus on franchisee profit, if the franchisee doesn’t have a plan for where they want it to be in …
Comprehensive Franchise Advisory Council Constitution
Franchise Advisory Councils (FACs) are an important communication form and mechanism for developing a co-operative franchise relationship. Operating well, FACs can strongly contribute to good franchise relations and an advancing business model for franchisor and franchisees alike. FACs, however, often vary in their effectiveness from both a franchisor and franchisee point of view. We find a common pattern of issues around FACs that are partly rooted in a short and/or poorly written FAC constitution. We often find FAC constitutions do not cover many important areas, leave …
Regular Franchisee Satisfaction Surveys
It is important for a franchisor to know how franchisees feel individually and collectively. This is important because franchisee satisfaction has the power to help build or destroy a franchise system, depending on whether it is positive or negative. Much, of course, should be done throughout the year in personal interactions and otherwise to know where franchisees are at. But nothing focuses attention nor can provide a professional measure, like an independent franchisee satisfaction survey of all franchisees simultaneously. For most franchise companies we would …
A Common Chart of Accounts for Franchisees
Franchise systems need a common basis for understanding and comparing franchisee performance. A common Chart of Accounts is essential for these activities. A common Chart of Accounts is referring to the practice of having the same account breakdown for all revenue, expense, asset, liability and equity items across franchisees. This practice should also extend to other financial and non- financial metrics that are relevant to the particular business model. Then franchisees, and franchisor support staff, have a powerful basis for comparison. The Chart of Accounts should …
Up-to-date Franchise Manuals
Franchising is about the transfer of a successful business model and the protection of a valuable brand. Franchise manuals help formalise aspects of the business model, and thus include important information on how franchisees are to operate the business. Franchise manuals also help franchisees understand how they are to operate within the franchise system. Franchise manuals need to be useful and cover operational information that is relevant and practical to franchisees. That information needs to be up to date. If the manual is not up to date then it is in some ways …
Leadership Focus on Franchisee Profit and Returns
Franchisee profit is a principal focus in our work, whether with would- be franchisors contemplating franchising or established franchisors reviewing or improving an established franchise system. Key here is that a franchisor needs to understand and help franchisees drive performance in a total sense; not just sales performance, but also profit performance – and profit in relation to their total investment. The franchisor needs to know how the franchisee is going in a financial sense. The franchisee invests a lot and as an investment profile they will typically be highly …
Franchize Consultants Launch Franchising Best Practice 500
This is the home of the Franchising Best Practice 500 series of franchise best practices. Franchize Consultants is sharing and publishing these best practices weekly for building great franchisor and franchisee businesses. We know that better knowledge and execution of franchising best practices leads to bigger and more valuable franchisor and franchisee businesses. About the Franchising Best Practice 500 Series We have termed this series the Franchize Consultants’ Franchising Best Practice 500, because there really are that many Best Practice areas and aspects in …
Franchisors Report Mixed Sentiment
KEY HIGHLIGHTS Franchisors and Service Providers report a mixed sentiment with decreasing confidence in general business conditions. Availability of suitable staff remains a key challenge. Franchisor sentiment for access to suitable locations drifted slightly in April, whilst Service Providers confidence increased substantially. Franchisor and Service Provider sentiment towards franchisee sales levels lifted to remain an area of strength. Franchisor growth prospects sentiment also showed strong increases from both Franchisors and Service …
Franchising 2018 Starts With Subdued Economic Outlook
The Franchize Consultants’ January 2018 Franchising Confidence Index demonstrates cautious sentiment. Click [here] for a copy of the full report Key highlights include: The latest results indicated neutral franchisor (net 3%) and Service Provider (net 0%) sentiment toward general business conditions. Franchisor growth prospects dipped slightly (net 23%), down 5% from the previous quarter. Service Providers reported similar sentiment movement at net 0%. Franchisors sentiment toward accessing financing were neutral at net 0% up from net negative …
Franchising New Zealand 2017 Survey Highlights
Franchize Consultants were delighted to be a sponsor of the 2017 Survey of New Zealand Franchising. Conducted by Massey and Griffith Universities on behalf of the Franchise Association of New Zealand. Franchising New Zealand 2017 Survey New Zealand franchising needs up to date information, particularly the quantification of franchising's total size and contribution. This information is especially valuable when explaining franchising's importance and value to key stakeholders, including government. The information is also helpful for franchisors, …
Franchisors Cautious of Economic Environment
KEY HIGHLIGHTS Franchisors and Service Providers demonstrate a strong shift in confidence levels, with changes prevalent in sentiment toward general business conditions and growth prospects Availability of suitable staff along with suitable locations showed increased sentiment. Previously these were viewed as key challenge areas. Franchisor sentiment towards franchisee sales levels dipped, although remains strong. Click here for a copy of the full October 2017 Franchising Confidence Index Report The Franchize Consultants’ October 2017 Franchising …
Strong Franchisee Sales Outlook Continues
KEY HIGHLIGHTS Franchisors and Service Providers demonstrate a continued increase in confidence levels across many areas, particularly, general business conditions, franchisee sales levels, and franchisor growth prospects. Both Franchisors and Service Providers were positive in their outlook for general business conditions. Availability of suitable staff were a standout challenge, and positivity toward franchisee profitability levels diminished. Franchisor sentiment for franchisor growth prospects continues to remain stable. Service Providers perceptions …
Why Franchise a Business
So why do companies franchise? And is franchising for mainly cash-strapped, but ambitious small businesses? 20 years ago this question was something I dived into for my Masters of Commerce thesis. 10 NZ-founded franchise systems varying in sector and size provided their motivations - many of whom have now grown into large national enterprises. It is always a topic that deeply interests me. People often have lots of questions, preconceived ideas and misconceptions. And no, franchising is not just for small to medium sized businesses. In the last two years, by …
Franchising Sentiment Positive, But Growth Constraints Emerge…
View a copy of the full April 2017 Franchize Consultants Franchising Confidence Report KEY HIGHLIGHTS Responding Franchisors and Service Providers demonstrate a positive outlook overall in the areas of general business conditions, franchisor growth and franchisee profitability. Concerns emerge for key growth enablers, including access to finance, access to suitable franchisees and availability of suitable staff. Whilst the numbers show a decline, both franchisors and service provider comments remain quietly positive. The Franchize Consultants’ April …
Franchise Technology Event – Tech for Franchise Success 2017
Franchize Consultants extends an invitation to franchisors to attend the franchise technology event - Tech for Franchise Success 2017. Tech for Franchise Success 2017 is an MYOB led event, also involving Westpac Bank and Franchize Consultants. Franchise Technology Event MYOB are running a special event aimed at helping franchisees get the most out of the latest improvements in business tech. Learn how using tech in your franchise business can help you keep control of your finances, be more productive and reduce risk to help you succeed now and in the …
Are You Measuring and Managing Franchisee Satisfaction?
Measuring franchisee satisfaction is important, as franchisee satisfaction is a powerful concept in franchising. Positive levels of franchisee satisfaction can contribute to strong network growth and development. Meanwhile, poor satisfaction levels have the potential to destroy value and send a franchise system into a slippery downward spiral. If you’re a franchisor you should monitor franchisee satisfaction. Franchisee satisfaction dimensions should make up some of your most important system key performance indicators. And if you’re a prospective franchisee, …
New Zealand Franchising – Franchisors Start 2017 Optimistic
New Zealand Franchising New Zealand Franchising | Franchize Consultants’ January 2017 Franchising Confidence Index demonstrates an increase in confidence across many sector growth drivers. The latest New Zealand franchising results indicated positive franchisor (net 31%) and Service Provider (net 41%) sentiment toward general business conditions. These results were shared by the latest results of other more general business surveys including the ANZ Business Outlook (22% in December) and NZIER (26% in January) business confidence surveys. Franchisors (net 59%) …
Franchisor Sustainability and Buying a Franchise
Evaluating franchisor sustainability and buying a franchise is a critical issue when looking to buy a franchise business. Long term franchising requires a viable franchisor. Franchisor Sustainability and Buying a Franchise Buying a franchise is a complex undertaking. There's a lot to understand; not least, the type of business, the market, the potential, the funding, your own skills and fit with franchising, and much more. There is a lot to consider; so much so, that even for friends thinking of buying a franchise I refuse to go into real detail until they have …
Franchising Research – Key Franchising Sentiment Metrics Remain Positive
Franchising Research Franchising Research: Franchising Sentiment Metrics Remain Positive Franchize Consultants (NZ) Ltd Media Release Franchising Research Highlights Franchisors and Service Providers sentiment continues to provide an optimistic outlook specifically across the areas of franchisee sales levels, franchisee profitability and franchisor growth prospects, and notably increased confidence in relation to access to finance. Franchisors sentiment toward general business conditions was substantially more positive this quarter for franchisors, with …
Making Franchise Field Visits Great
Franchise Field visits are one of the most important franchisor management processes. A well-constructed and executed field management programme, in turn, can have a dramatic and positive impact on both franchisor and franchisee results. Impactful franchise field visits are the result of strong foundations There are reasons why franchise field visits are valuable, with key examples being they: Demonstrate franchisor commitment to franchisees Are the most relevant environment for monitoring performance and identifying improvements Help …
Leadership & Franchisee Investment
Franchisees make a big commitment via the franchisee investment when buying a franchise. Franchises range in value from circa $20,000 to what can often be more than $400,000. In some situations franchisees will invest close to or even more than $1 million - depending on the type of business, structure and situation involved. Franchisees that invest will inevitably be taking a quite a risk - albeit hopefully a highly calculated, high conviction one. Pretty much always the level of franchisee investment is a big deal for franchisees and whether it's $20,000 or $200,000 …
Franchisee Sales and Profit Outlook Strong – Franchising Research
The July 2016 Franchising Confidence Index by Franchize Consultants indicated a strong outlook for franchisee sales and profit. Key Highlights - Franchisee Sales and Profit Responding Franchisors and Service Providers sentiment provides a more optimistic outlook specifically across franchisee sales levels and franchisee profitability. Franchisors sentiment toward general business conditions was slightly more sombre this quarter. Franchisors sentiment about franchisee profitability levels – arguably franchising’s most important key performance indicator, …
Franchise Review – Should You Undertake One Now?
Change is nothing new, and with change comes the need to conduct a Franchise Review and adapt. McDonald’s and many other blockbusting franchise companies would simply not be around today had they not regularly reviewed and revised their business formats, applying best practice to achieve and maintain their market their leadership. New Zealand franchise companies are no different and our experience suggests that many franchisors, along with their respective franchisees, have a lot of opportunity to improve their profits. What are the indicators that a franchise …
Franchising Confidence Index April 2016 – Strong But Mixed
Franchize Consultants Franchising Confidence Index April 2016 demonstrates sustained strong franchisor confidence levels for many areas, like general business conditions, franchisor growth prospects, franchisee sales levels and, to a lesser extent, franchisee profitability. However, sentiment reductions were evident across many of these and other measures. Franchisors were still on balance quite positive about general business conditions (net 33%), the same as the previous quarter. Service Providers reported similar at a net 37%, but down from January …
How to Franchise a Business with Strong Foundations?
How to franchise a Business with Strong Foundations? A franchise system needs to be designed and built responsibly, that is how to franchise a business to succeed. That responsibility starts with designing an appropriate franchise structure based on a successful operating business that has been proven in the field over a period of time. Franchising can be a highly successful method of operating a business which can expand quickly and yield a large competitive advantage. How to Franchise by Building Strong Foundations It should be based on the principle of win-win. …
Franchise a Business with the Right Steps
Franchise a business while achieving excellent results requires planning. In fact, anyone getting involved in franchising needs to do it in the right order. No matter if you are franchisor or a franchisee there is a prior stage. And the prior stage comprises a series of activities, that help pave the way for positive outcomes, and reduce the likelihood and size of challenges along the way. For franchisees in-depth Due Diligence of the franchise and themselves is critical prior to signing agreements. The Franchise Association of New Zealand’s free Online …
New Education Programme for Franchising and Licensing a Business
Franchising and licensing a business can be a very successful way of growing and improving an established business. A new training programme provided by Franchize Consultants, Westpac and MYOB will help business understand the opportunity and steps involved. Wednesday 4th May - Westpac, Auckland - 3 hrs Tuesday 24th May - MYOB, Christchurch - 3 hrs Wednesday 25th May - Westpac, Wellington - 3 hrs Franchising and Licensing a Business Education Dr Callum Floyd of Franchize Consultants, in association with Westpac's Daniel Cloete, and MYOB, will provide …
Franchising and Licensing a Business Training Programme
Franchising and licensing a business can be a very successful way of growing and improving an established business. A new training programme provided by Franchize Consultants, Westpac and MYOB will help business understand the opportunity and steps involved. Wednesday 4th May - Westpac, Auckland - 3 hrs Tuesday 24th May - MYOB, Christchurch - 3 hrs Wednesday 25th May - Westpac, Wellington - 3 hrs Franchising and Licensing a Business Education Dr Callum Floyd of Franchize Consultants, in association with Westpac's Daniel Cloete, and MYOB, will provide …