Making the Franchise Engine Work : How To Achieve The Basic And Clear Goal Of Franchising: To Create A Profitable Relationship Of Both Franchisor And Franchisee.
Franchising can be likened to owning a car after a trip to the car dealership. After we choose a franchise or decide to franchise our business, we need to answer this important question: in the same way we need to take a car out of the dealership after paying for it, in the same way we need to take a car out of the dealership after paying for it, how do we franchise? work once in our hands?
Much has been written about how to franchise a business or choosing one, but this phase of franchising is just the tip of the iceberg, so speak up. It’s getting the franchise to work making it a success and growing it into a viable and vibrant business that’s really at the heart of the matter, and I have to say it’s a challenge that is bound to test the maturity of both the franchisor and the franchisee.
The basic and most obvious goal of franchising is of course to make the relationship profitable for both parties, but even so, we must realize that our actions in franchising are not necessarily motivated by the material benefits we get. can come from him.
It could be that the benefits we hope for are primarily social – “I want to own or be part of a successful team.” “I can prove that my business has great potential.”- or psychologically- “I just want to do what the franchise concept requires.” “With the franchise, I can now expand my business.” – or maybe even emotional – “I need a support system to start my business.” “I’m not alone, but there are other entrepreneurs who manage similar branches.” However, at the end of the day, the bottom line is the financial benefits that both parties can derive from the franchise relationship.
Granted, franchising may be different from other ways to grow a business, but the expectation of good financial returns will always be at its root.
As in driving a fine race car to a top speed of up to 220 kilometers per hour, you can make a franchise engine run at peak efficiency only if all its components work smoothly and harmoniously. Franchises are like personal cars in a race – they have to be very well cared for and spare parts must always be kept in tip-top condition.
So, to take the analogy further, if your franchise is a car, how do you make it work so you can get the most out of it and take advantage of its full potential?
The first thing to do is get the franchise Operations Manual to work for you.
Oops! Don’t make the mistake of keeping the manual in a safe and convenient place or, worse, keeping it locked away. The Operations Manual is meant to be understood and regularly referred to as you operate your franchise. You must read and fully understand the operating manual of the car. Why? That’s because car manuals identify all parts of the car, explain their functions, and show users how to care for them.
In the same way, the Franchise Operations Manual contains all the information you need to make a franchise work, whether you are a franchisor or a franchisee. Because it stipulates in detail the standard business model, it is this Franchise Operations Manual that enables the franchise system to achieve uniformity and consistency in its implementation.
Franchisees should use the Operations Manual as the primary guide for implementing a static and inflexible set of rules. The franchisor must periodically update and upgrade it so that the franchise system can keep up with technological developments. It would not be an understatement to say that a franchise system that does not update its Operations Manual regularly is headed for disaster in the near future.
Many articles have been written about the importance of communication not only in franchising but also in general. Back to the car analogy, what will keep the car going to the destination we want is fuel. In a franchise system, the equivalent of a car’s fuel is communication.
It is the communication that will enable the key participants in the franchise system – the franchisor and the franchisee – to achieve a unified vision and goals and agree on how to achieve them. When there is a basic acceptance of the importance of frequent dialogue between the franchisor and the franchisee, the franchise system is greatly enriched and grows faster.
When the unity of mind between the franchisee and the franchisee is the goal, the dynamics of communication in see now can sit in the spirit of openness and dialogue.
Franchisors often have to take the first step by going back to the basics, especially about why there was a franchise in the first place and why there was a franchise in the first place and why he decided to franchise his business.
Then the franchisee can begin to reveal his reasons for choosing a particular franchise among all his other choices. The dialogue can continue and move on to the identification of the current problem of the franchisor and franchisee.
They need to look at current concerns from the perspective of the original goals and objectives, and when they do, they will discover that their goals are not contradictory but actually the same, thus leading to a shared desire to continue their franchise relationship. The deal can then be sealed with a handshake and both parties can leave the room in high spirits and on a positive note on how to develop the franchise system together.
Preserving the Brand or Trademark
In the past, brands and trademarks were not given true value; today, however, companies value far beyond their actual physical assets because of the value of their brands and trademarks. Giant global brands like Colgate, Coca-Cola, and McDonald’s, for example, have enormous actual value. For this reason, preserving the brand in a franchise system benefits not only the franchisee but the franchisee as well.
Some franchisees often disagree with their franchisee’s strict rules on trademark use; for example, in the printing of promotional materials that require the written consent of the franchisor for their use. This is actually an unacceptable reaction.
Preservation of the integrity of the trademark should be a major concern not only for the franchisor but also for the franchisee, because it is the trademark that the customer will remember about the product or service being franchised, and only when the customer gets a “wow” experience from using that product or service – translated to the perception of a highly favored brand – that the franchise system can hope to add that customer to a coveted base of loyal and regular customers.
So important is the trademark or franchise mark that some franchisors have even gone to the trouble of preparing a standard corporate identity manual to provide precise specifications for their use to how the brand should be represented in pantone colors. Therefore, it is very important for all parties in the franchise system to work closely together in communicating a consistent trademark or brand to the market and various other publics.
The productive life of a car depends heavily on the constant care and maintenance it receives, and some classic cars have even been known to outlast their owners. What lessons can we learn from this analogy? This is that the engine of the franchise system can be expected to continue to generate energy for growth only when the franchisor and franchisee are one in ensuring the system undergoes continuous improvement. Indeed, while improvements in the franchise operations manual are a must, the entire system itself also needs to be periodically upgraded.
The big question to ask is: Is the franchise model still relevant to a changing market? Could the franchise application process be improved to better screen applicants? When was the last time a franchisee and franchisee sat down together to review a franchise agreement? Do franchisees regularly analyze local markets and their positions? Are there ongoing efforts to promote and market the brand? Is the franchisee consistent in doing local store marketing?
Is there a need for a change in the format of meetings and conferences that both franchisees and franchisees really expect to attend? Does the franchise system regularly monitor its current market share compared to its target?
Is there a corporate planning conference that franchisees and franchisees attend? Are initial franchise fees and royalties reviewed regularly? Have any comparative studies been conducted to examine the financial performance of franchisors and franchisees?
These are some of the questions that need to be answered if the franchise system is to outlast its founders, such as what McDonald’s has achieved by maintaining a very strong franchise system and surviving even though Ray Kroc is dead.
Getting the franchise machine to work will always be a challenge for both the franchisor and the franchisee, but when both parties remain focused on mutual benefit, the task need not be a hostile and unpleasant task.