If you have not already started, then you can jump right into planning for the upcoming year. We will be sharing with you our key tips on how to prepare your franchisee for success? – Part 1 in this article. These will aim to improve the visibility of your brand’s results, gain insights into franchisee behavior, and improve processes to drive efficiency. As a result, you boost franchisee performance, achieve franchisee satisfaction, ensure franchisee compliance, and drive engagement and alignment.
Start your year by connecting and speaking with all your franchisees. This helps you share your goals and vision. Ensure all important areas of business are covered in the discussion. This includes receiving feedback and insights that can be valuable for your budgeting. This is not the time to brag about your work, instead find out about their operations, challenges and aspiration. Though this does sound like the work of franchise consultants, it has a different level of impact when the executive team calls the franchisee directly to check on them and give a listening ear. You will be surprised with how touched they will be by this genuine connection to see if they are receiving the support and training needed to achieve their goals.
Additionally you could also use third-party companies, such as Franchise Business Review and Franchise Research Institute, which can to turn the voice of the franchisees into actionable data. Remember the aim is to understand the health of your franchise culture and see which resources are more valued than the others. This also lets you gauge if franchisees are recommending the franchise, and also measure franchisee intentions to sell their business so you can minimize any impacts.
Most of the franchisees lack business or marketing plans. Franchise profitability is based on franchise recruiting, satisfaction, and retention. By leading the budgeting process to help franchisees actively engage in situational budgeting, you are increasing the profit generating capability of the franchisees. This engagement is crucial for both the franchisor and franchisee. In a study conducted by Ingage Consulting and Franchise Business Review, engaged franchisees were 3.7 times more profitable than non-engaged franchisees.
Each franchisee is different from the other in terms of strengths, weaknesses, time in business, store types. Nevertheless, you will still need to streamline your process in order to process their results and understand their performance. Review of KPIs are an excellent tool to drive success on a franchisee-by-franchisee basis. It is necessary to equip them to monitor trends and identify what they are doing well and what may need improvement.
In other words, ensure they have a process driven playbook for your franchisees. This shows where and how to identify KPIs aligned with your goals (e.g., cost of goods sold, revenue, or cost structures that are out of balance). These KPIs also help develop franchisee sales plans, marketing plans, and margin plans, as well as your budget.
This kind of management in budgeting keeps the franchisees more involved in the process as they have a better understanding of the reasoning and the process for achieving it. The franchisees must understand and agree to the set goals in each area. This applies to all kinds of franchise industry types to educate and create engagement with franchisees throughout and beyond the budgeting process.
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