A guide to franchisees to re-invent their thinking and stay relevant

Franchisees have been through a long and hard period of economic squeeze where costs are increasing and margins are decreasing. Franchisees have to withstand political and economic disruption and forge ahead to keep their businesses growing. They need to be resilient and focused on spotting opportunities. Despite best efforts it is not always easy to keep sales rising faster than the costs, and as a result margin compression can be suffocating. In a changing world where we are shifting to impersonal digital platforms there is remains a significant place for engaging with customers. There is great value in acknowledging and incorporating technology without losing the human touch.

Based on research by psychologist, Greg Nathan, and his team at the Franchise Relationships Institute in Australia, top franchisee sales performers practice the following 7 habits.

  1. They actively engage with their local communities and collaborate with other local businesses. Local area marketing does not just involve passively donating money or products. Top franchisees are getting actively involved with their communities and are “present” in the initiatives. Furthermore, seeking collaborations with other local business owners who serve a similar market has proved fruitful for them.
  2. They coach staff on the specific behaviours that drive sales and customer satisfaction. Top franchisees make it their business to understand their customers and meet their expectations. This knowledge is continually passed on to their staff and they implement systems to ensure it happens.
  3. They set challenging goals, and seek feedback and ideas from their field manager and peers. Top franchisees are growth orientated and will do what is needed to drive performance. They are also open to new ideas as well as constructive input.
  4. They create a vibrant internal culture that inspires high levels of brand passion in their team. All businesses have a culture that determines how things are done. This stems from the direction of the franchisor, the adoption thereof by the franchisee and filters all the way down to the franchisee’s staff interaction with the customers.
  5. They obsessively focus on understanding and staying connected to their existing customers. It is much easier to keep an existing customer than make a new one. The existing customers can not be taken for granted by the franchisees and they are continually engaged with.
  6. They use systems to measure sales related KPIs and respond quickly to new opportunities. Franchisees who are performing are continually aware of the indicators that predict and influence sales especially those related to customer service.
  7. They wisely invest in local area marketing and initiatives to keep their business fresh and relevant. Top franchisees are cognisant of the financial investment required to keep this habit. They prioritise spend based on the outcomes that are required.

In the digital age and our general addiction to these devices it is important to use them where required but not to lose the “face of franchising”. The personal touch is still valued by customers. However franchisees can not live in a bubble where they don’t acknowledge the impact of technology on their business. But it should be used to enhance sales – not be an obstacle. We live in an age where we rapidly switch our attention from one thing to attend to another. But often that means missing out on what is in front of us.

  • A franchisee or a franchisee’s staff member in training who is using their device to be in touch with the outside world and thus losing the importance of what is happening in that room.
  • A franchisee staff member who is interfacing on a digital device loses touch with the human face and customer that is in their store – seriously impacting on the quality of that relationship.

That being said franchising has to be nimble and embrace the advantages that technology offers and incorporate them where they add value and enhance the customer interaction with our brands. This may include staying ahead of social media trends and incorporating the digital developments into the franchise system development.

New digital developments can have the benefit of:

  1. Engaging with customers at different levels and meeting their needs across different platforms. Use technology to engage, acquire and retain the customers.
  2. Incorporate digital enhancements that ease the cost burden and make doing business easier rather than more difficult. Technology should assist in enabling the sale rather hindering the customer experience. Furthermore it should be smart and agile so that it can achieve this.
  3. Streamlining the role technology plays in systems and procedures so that the human resources can better be used in other areas. This allows people to reach their maximum productivity and efficiency in the areas that are important.

The focus on the above elements will go a long way towards achieving the 3 cornerstones of a successful franchisees:

  1. Run a profitable business
  2. Maintain brand standards
  3. Participate constructively in the franchise network

Franchisees who are making money but doing damage to the brand will not be beneficial to the brand in the long term. Franchisees who are proactive and positive are the most successful. They need to passionate about their brand and transfer this enthusiasm to their employees. The franchisees who are best at these elements feel that they are in a system that cares and looks after their interests.

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