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Getting it Right as a Franchisor in 2010

Posted by Carolyn Dufton on 15 February 2010
Getting it Right as a Franchisor in 2010

"The Ostrich method" does not work well in business generally and particularly in franchising.

Burying your head in the sand and hoping your problems will go away will NOT WORK.

Being in denial of re-occurring issues in your franchise will only lead to a massive blow out of the issue....whatever it may be.

Remember, that since March 2008 when the new disclosure changes occurred, you must disclose

There's no picking the best of the bunch to act as advocates to franchise prospects as has happened in the past.

Typical "Ostrich triggers" for  Franchisors are;

  • Underperforming Franchisees
  • Complaining and negative franchisees
  • Out of date and inaccurate franchising documentation
  • No growth in network numbers
  • No plan
  • No support. A franchisor's role can be a lonely one at times.

The impact

So how can these issues affect your wellbeing and your business? And what can you do about them?

Underperforming Franchisees

These franchisees will affect the network morale.

Underperforming franchisees =unhappy franchisees. By being proactive in your network you can prevent many problems from arising.

Be aware of general underperformance and also of a sudden drop in sales figures. Are there extenuating circumstances?

Do you have systems for measuring and dealing with underperformance?

Most importantly do not ignore these people and hope the problem will go away. You do not want them to fail in their business as this will impact on the whole Franchise network.

Deal with their situation sensitively, effectively and expeditiously.

Complaining and negative franchisees

Meet with these franchisees individually.

They are often not so vocal without an audience.

Try and understand where the root of their dissatisfaction lies. Don't talk listen and allow them to vent their grievances.
These franchisees can be the bad apple that rots the barrel.

Once you have more insight into the franchisee's situation you will have to decide how best to deal with it.

You may need to seek external guidance from a franchising professional with mediation skills.

Out of date and inaccurate franchising documentation

Some franchisors have franchising documentation that was prepared by solicitors with minimal franchising experience.

This may not present a problem when all is going well (although is not ideal) but can involve serious risks for The Franchisor if a franchisee seeks legal advice.

Documentation should be as a minimum:

  • Up to date with the 2008 changes. ( I have seen many that aren't when franchise prospects are seeking advice on a franchise purchase and it doesn't reflect well!)
  • Clear and unambiguous
  • Compliant with the Franchising Code of Conduct in all regards

No growth in network numbers

Unless a Franchisor has reached his National capacity, this suggests underlying problems.

The longer between Franchise sales, the harder it becomes.

It is also demoralising for existing Franchisees.

Seek urgent advice and assistance to get your network rollout plan on track.

No plan

A Franchisor must lead by example. If the Franchisor doesn't plan, It is likely that neither will the Franchisees.

We all know the old adage "A business that fails to plan , plans to fail ".

Sit down with the decision makers in your business and work out your plan for 2010 and beyond.
If it's all too hard, seek help, but don't find excuses for not doing it.

No support

I know that a Franchisor's role can be a lonely one at times. I've been there!

If you're a sole Franchisor with no business partners, you have no-one to confer with.

You can sometimes feel unappreciated or frustrated and have no sounding board.

Try to find a business mentor. An experienced business person who also understands the human psyche and the reality of being a Franchisor and the many roles you play in your business. Counsellor/diplomat/adviser/teacher and the list goes on!

So make this year a great one Franchisors!

© franchisingplus

All rights reserved. No part of this publication may be reproduced or transmitted by any means, electronic, photocopying or otherwise without prior permission of the author as permitted under the copyright act.

Carolyn DuftonAuthor: Carolyn Dufton
About: Carolyn Dufton Dip. Bus (Franchising) heads the team as the owner and manager of franchisingplus. Carolyn has a wealth of small business experience, and many years of hands on franchising experience.
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