The success and growth of any franchise company is greatly dependent on having an energised and motivated team of franchisees. To ensure a high level of commitment from franchisees, franchisors have to ensure that an active and engaged franchise support system is in place.
A comprehensive franchise support system is designed to strengthen the business of both the franchisee and the franchisor. But more than anything, it’s designed to assure franchisees that they are not operating on their own, but have the franchisor’s support to back them up.
Therefore, before signing any final contracts, a prospective franchisee should closely scrutinise the Franchise Disclosure Document, speak to the franchisor at length, and confer with existing franchisees to determine the level of support that will be provided.
While you may think it is exciting to join a fast expanding system, you have to make sure that the company is investing in the day-to-day support of franchisees. It is also important to determine which services the franchisor is emphasising in its support programme and investing its resources in.
Although the level of support a franchisee could expect depends on the type and the size of the franchise company, there are some fundamental services which are essential:
Every franchisor should provide training on all the main aspects of the business. The training programme should be quite comprehensive and should include aspects such as financial and business systems, staff recruitment and management, as well as guidance on marketing techniques to attract customers.
This training programme usually lasts anywhere between a few days and a few weeks. It could take the form of on-the-job training at the franchisee’s site or theoretical instruction at the corporate headquarters, or a combination thereof.
In a large franchise organisation, specialist instructors conduct the training, while in smaller franchise businesses, the franchisor may undertake the training himself. The method of training is not important, as long as the franchisor ensures that new franchisees and their managers feel comfortable about every aspect of operating the business.
Ensuring that you have the right location is vital to any franchisee’s success. The franchisor must work closely with the franchisee in selecting the best possible site to position his business, ideally using scientific tools based on Geographic Information Systems (GIS). This should also include guidance with lease negotiations.
Marketing and advertising
As franchisees are required to contribute to marketing and advertising funds, all franchisors should provide a comprehensive marketing plan that extends past the grand opening and that includes brand building and promotional campaigns. In addition, franchisors need to guide new franchisees in local and regional marketing initiatives.
Franchisees should also be supplied with customised, professional marketing materials such as posters, brochures, banners, and many more.
As part of ongoing support, a good franchisor should provide new franchisees with a comprehensive operations manual. This manual should outline all aspects of running the business in detail.
Head office support
Most franchise companies will have a structured support system in place. Specific, specialised personnel within the head office, such as field service consultants, will make scheduled contacts with franchisees with regard to marketing, technology, and any training that is needed. These meetings should ideally take place at least once a month. In addition, franchisees should be able to contact the head office at any time when questions or concerns arise.
Support from other franchisees
Franchisees can also provide ongoing support to each other and new franchisees will have much to learn from others who have been in the system for longer. Apart from learning from the experience of their peers, franchisees can also exchange ideas.
Generally, franchisors also hold annual meetings or conferences with their franchisees. During these meetings the growth and earnings of the franchise is evaluated. It is also a good opportunity to share any concerns, and to examine new ideas and do strategic planning for the business.
- Verify that the services you heard about in your meetings, particularly those services you consider to be most important, are included as franchisor obligations in the franchise agreement.
- Check the credentials of the support staff. Are they professionals with experience in their fields as well as the franchisor’s industry? How long have they been with the franchisor? What is the turnover of support staff? How are they trained?
Set up a meeting with the field staff assigned to your area to determine what level of authority they have. How often will you be visited, and how do they generally help franchisees during these visits? How many franchises are they responsible for? Ask other franchisees they work with about their level of commitment and usefulness of their advice.
- If possible, visit several of the franchises in the system and observe how they’re run. Common problems may signal a larger issue.
- Ask current and former franchisees about the quality of support—are the field staff’s solutions practical and affordable? How accessible and responsive is the support staff when they are confronted with an unexpected or unusual problem, or request?
- Ask the other franchisees about results. How effective was the last advertising campaign in increasing sales? How effective and efficient is the training programme for franchisees’ staff? Does the franchisor have an active R&D programme that keeps its consumer offering fresh and competitive? If the franchisor provides franchisees with products, do they provide quality merchandise and supplies? Are the prices they charge the franchisees fair, and do they have a solid history of having key items in stock?
It is vital for prospective franchisees to do as much research as possible before selecting the franchise company they get involved with, so that they are fully aware of the specific support services the organisation will provide. Include in-depth conversations with other franchisees in your investigation because if they have been satisfied with the franchise support system, you most likely will be as well.
Make sure that you get the answers you need directly from the people who will be providing the support you are counting on. By doing your homework thoroughly, you will be able to access, not only the quantity, but also the quality of the support you will receive from the franchisor. A last word of caution – make sure that you ask any questions you may have, before you sign the franchise agreement.