Tips For Great Franchising Part 5

Award-winning advisors Franchize Consultants launched their Franchising Best Practice 500 in 2018, and are now well into the project. Here’s a summary of nine more best practices – you can find them in full, along with all the previous tips, at www.franchize.co.nz.

30. Managing franchisee tenure

How long franchisees stay with a franchise is an important measure of system health and franchisee satisfaction. Franchisors should measure and understand franchisee tenure, and make plans to sustain and improve it as appropriate.

31. Franchise system reviews

The operating environment is ever-changing. Franchisors must work to innovate and adapt their franchisee business model, franchising structure and management. A regular specialist Franchise System Review is crucial for ensuring positive long-term results.

32. Enter franchise awards

If you want to be competitive in the market and with your franchising programme, then you will certainly benefit from the process of entering and learning from franchising awards.

33. Agreed field visit agenda

Best practice field visit management means not only a structured agenda with clear objectives but an agenda that is mutually agreed by the field manager and franchisee in advance of a visit. Field visits are for franchisees and the franchisor, so preparation is key to communicate agendas in advance which generate open productive communication for the benefit of both parties.

34. Access to franchisee financials

Franchisors need access to franchisee financial statements so they can understand how franchisees are doing and individualise support. Access is also important so that benchmarking insights can be shared with franchisees.

35. Formal recruitment process

Franchisors should have a formal franchise recruitment process that is adhered to with all potential franchisee candidates. That doesn’t mean all candidates will pass through all phases of the process, but it does mean that key steps are practised in the right sequence to ensure a robust recruitment process and good franchisee selection.

36. Governance structure fit

Franchisors need a governance structure (eg. mentor, board, etc) that befits their situation and plans. Good governance is needed because franchise companies are complex and face an increasingly dynamic operating environment.

37. Prospective franchisees complete pre-entry training

Anyone considering buying a franchise business should complete a pre-entry training programme, provided free of charge in many countries. In New Zealand, a free pre-entry training programme is provided online by the Franchise Association of New Zealand (FANZ).

38. Review franchisee employment compliance structure

It is important franchisees comply with all laws, especially employment law. This is particularly critical because it involves people, one of an organisation’s most important assets – if not the most important asset.

More detail

Dr Callum Floyd, managing director of Franchize Consultants, says, ‘Great franchises like the winners in this year’s Westpac New Zealand Franchise Awards look for constant improvement. Go to our website to find more detail on each of these tips.’   

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