Franchise Even-handedness

Opened Book In Hand Stock Image  By phanlop88, published on 15 March 2013 Stock Image - image ID: 100147306

Franchise Even-handedness

 

In the world of franchising, there is no more damaging action than a side deal or special perks for a long-time franchisee from an executive in the franchise.  Every franchisor is thankful for the people who looked at the franchise and jumped in feet first on the recommendation of the founders and did well.

Thankfulness is one thing.  Being blind to putting that franchisee high up on a pedestal and not enforcing the rules evenhandedly is when real damage is done.

I could tell a million stories about deals that hit franchises hard because the founders wanted to show deference to a franchisee who has been in the system since the beginning or even just years longer than other franchisees.  I could also tell you stories, great stories, about franchisees who have been in a system for decades and still listen, learn, and help new franchisees out when they can.  Business is a choice.  How you treat your business is the split in the road.

Bulldog Rule for Business #9 You may not be the best person for the job goes right to the center of the problem.  You, as the leader of the franchise, may be the wrong person to be in charge because you are too close to the situation and can’t or won’t see the damage that you are causing to newer franchisees by being best buddies with the ones who helped start the brand.  We are all that way in some part of our lives.  As a leader, you affect more than just the relationship between yourself and franchisee.

  • If you can’t take bad news or even critical news about a franchisee you have known for a long time and deal with it like you would a new franchisee, then you are the problem.
  • If you “shoot the messengers” for the problems of the franchisees, then you are the problem.
  • If can’t see all franchisees as part of the chain and that they all need to follow the system the same way, then you are the problem.
  • If you can’t act the same with a franchisee who just joined as you do with a franchisee who has been in the system for a decade or more, then you are the problem.
  • If you would be sued for giving special treatment to a franchisee, then you are a BIG problem.

I have personally listened to franchise CEO’s give speeches about firing themselves if they were seen as the problem.  Funny thing about that is that they won’t step down and they won’t change their ways because they don’t see themselves as the problem.  So, the problem persists and the chain suffers.  If you have great employees leaving often, then you need to take a good hard look at things.

If I was interested in a franchise to invest in, I would spend my due diligence calling the newest franchisees, franchisees who have been in the system for a year, and a couple who have been in the chain for five or more years.  If I can’t get enough franchisees to call from the franchisor, then I wouldn’t buy in.

Questions to ask a franchisee who is new to a system would be:

  • Did you get what you were promised when you started?  Training, help with real estate, a person to call with questions, and more get promised by the development manager.  All of those items are needed to make you successful.  If you don’t get at least that much help, then sell fast and walk away from the franchise.  It is indicative of bigger problems that will grow over time.
  • A few months after opening, were you connected with a franchisee who has been in the system for years who can be a mentor?  Finding someone who has already been in the system and lived through the rough patch of starting out can make a big difference.
  • Is the mentor they paired you with someone who would remember what it was like when they started?  Build a business from scratch is a lot different than a business that has regular customers and strong base who know the brand.  I see this mistake more often than I like.  It is the “Big Brush Off” from the franchisor.  They figure that a franchisee who has been in the system for a while has the time and the desire to help other franchisees.  In fact, they may want to knock a new franchisee down to limit any competition.
  • Can you give feedback that gets a response?  I listen to franchisees.  It is how I am most effective in getting results.  If they don’t feel like anything is getting done to make changes to build the brand, franchisees become disgruntled and cause problems in order to be heard.  One way or another, franchisees will be heard.

I want to say that I have personally witnessed changes at the top of a franchise that have made the culture in the franchise grow.  But, I can’t.  There are so few times when changes to the way franchisees are treated that I have not seen it work or work well.  It happens but it usually takes a complete gutting of the executive team.  It doesn’t need to happen that way, but the power structure of a franchise is what makes it tough.  Why would a CEO change how he/she treats franchisees if it didn’t personally affect him/ her?  No one under the CEO will tell, so nothing changes for the better.

Step back, look at things as if you weren’t in charge, and give yourself the advice you would give someone who is sledding down a slippery slope thinking its a fun ride.  Rides end.  Being at the bottom is a tough climb back to the top when you could have stepped back sooner and made things right.

Bob Griffin – Chief Bulldog-in-Charge
Bgriffin@businessbulldog.com

Leave a Reply

Your email address will not be published. Required fields are marked *