10 Franchisor Leadership Practices for 2013

At a consultant meeting late in 2012 we put aside discussions on business models, franchise structure and management, and focused on franchise system leadership.  We went around the room looking for practical examples. Each of our 10 consultants identified both a positive and poor franchise system leadership practice they had observed, along with the consequences.

Given we\’ve commenced a new calendar year, and are fast approaching a new financial year; we thought you mind find this list of 10 useful:

1. Maintain a focus on franchisee profit as a top priority. We believe that franchisee profit, and factors that contribute to franchisee profit, should be among your top priorities. Furthermore, we would argue that franchisee $ profit should be a top franchisor KPI.
2. Listen to the legitimate problems of franchisees. If franchisees have legitimate concerns, address them.
3. Don’t be disrespectful. Franchisees have invested their money in your system. If you’ve recruited a total dud, and/or provided poor training and support, then who is the dummy? Always talk respectfully about your franchisees, and make sure your team do to.
4. Stay close to franchisees. Do not be insulated from your franchisees.Make sure you get out and about, front-up, listen, understand and get behind your franchisee operations, challenges, issues and concerns. Delegation is fine, and needed, as you grow; but don’t let that get you insulated from the front-line climate and facts.
5. Don’t over promise. Not delivering on what you promised is one of the fastest ways to lose credibility and the trust of your franchisees.
6. Do not get too friendly with your franchisees. You need a relationship to get somewhere. But being too-friendly can prove counter-productive. Try confronting a franchisee on a performance issue after a dinner at their house. Sure it’s possible, but it adds complication on all sides.
7. Don’t be the fountain of all knowledge. Many of the best ideas in the world’s best known franchising companies were the brainchild of franchisees. McDonald’s found many, including the Big Mac. Coca-Cola did too. Don’t tune out to an idea that could transport everyone’s business to more productive and profitable place.
8. Don’t forget to put the customer first. This may seem obvious, but we often see a franchisor wrongly assume franchisees are their customers, and regular customers the customer of their franchisees. We’re crystal clear on the point a franchisor needs to be a master of two markets, not one: the market for franchisees, and the market for end-user customers.  Neglect/ignore either at your peril.
9. Don’t avoid the hard decisions. There’s too much at stake, for you and your franchisees. If it impacts a customer –sort it as soon as possible. Most experienced franchisors tell us they wished they followed their gut instinct on hard decisions, rather than watching a problem persist and grow bigger.And finally..
10. Develop a comprehensive franchisor business plan. Make sure you do what almost no other franchisor does. That is, develop and work to a comprehensive franchisor business plan. We should all know how critical business planning is for a franchisee business. Is a franchisor business more or less complicated?

Those were our thoughts. It’s not an exhaustive list, but we believe it contains many pertinent franchise leadership considerations.

Feel free to share yours. We’d love to hear from you.

Callum Floyd

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