Tips For Great Franchising - Part 7

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 seven more best practices – you can find  them in full, along with all the previous tips, at www.franchize.co.nz.

47. Scientific approach to innovation

Franchisees own their businesses and, while operating within a franchise framework, are often rightfully concerned about changes impacting on their strategy, processes and resources. This requires franchisors to develop a compelling case for change – ideally based on sound logic, proof or evidence. In simple terms, this means demonstrating actual before-and-after effects and/or performance comparisons.

48. FAC franchisee representation

A Franchise Advisory Council (FAC) should involve good franchisee representation with a meaningful diversity of franchisee members on the Council to help facilitate achievement of the FAC’s purpose. Importantly also, we believe it will help franchisees generally see the FAC as a valid, productive and useful forum.

49. Franchisee business planning template

Franchisee business planning is a critical franchise system management process and an important driver of both franchisee performance and, as a by-product, franchisor performance. A franchisee Business Planning Template that is bespoke to the system is an important best practice.

50. Require potential franchisee advice

By using professional advisors (eg. legal and accounting), potential franchisees will not only make a more informed decision – they will also gain a more realistic alignment of expectation to performance. Advice will help the potential franchisee better understand the franchise system, including the various roles, responsibilities, restrictions and other agreement terms. They will understand support levels, and what will be required to make the unit successful from a management perspective. All of this helps provide for a solid start point in the franchisee-franchisor relationship.

51. Crisis management plan

Recent history has demonstrated the importance of having an active Crisis Management Plan. Even the strongest and best-managed franchises, like any other form of business, could have a crisis hit at any time.

52. Board meeting duration

Board meetings must afford adequate time to the many elements of franchisor governance. Our research across a diverse sample of New Zealand franchisors and national master franchisees indicated the most common duration for board meetings is one full day – however this ranged from a half day to two days.

53. FAC franchisor executive representation

A Franchise Advisory Council’s purpose will often include taking both franchisor and franchisee businesses forward, involving the whole franchise system. It follows that a FAC should include franchisor representatives who are sufficiently senior to be impactful within the FAC environment.

More detail

Dr Callum Floyd, managing director of Franchize Consultants, says, ‘Great franchises look for constant improvement to keep their own and their franchisee’s businesses accelerating. Go to our website to find more detail on each of these tips.'

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