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How to have an effective Franchise Advisory Council?

Posted by Carolyn Dufton on 28 July 2010
How to have an effective Franchise Advisory Council?

What is a Franchise Advisory Council?

These organisations operate under many titles and you may choose to call yours a;

  • Business development group
  • Filter group
  • Advisory committee
  • Network council

and really anything else that appeals to you!  I would suggest that you don't get too hung up on the name and that you keep it simple.

So the name aside, why and how would you form a franchise council within your franchise network? or if you have already one, how could you improve what you're doing now?

Some franchise councils are formed specifically to address a particular niche of the business. This could be ;

  • Marketing
  • Product R and D
  • Conflict
  • Service

In general terms the group should be formed to aid consultation on matters of deemed priority by The Franchisor and The Franchisees.

Most franchise councils do not cover specific topics and are broad based discussion groups.

Many Franchisors are apprehensive about forming franchise councils as they fear that will become group "whingeing" opportunities.

Q. Have any of your current or former franchisees used any of the following methods to communicate negative messages about your system?

Response

Methods of negative communication               Number of Responses                     Precent


Meetings of franchisees                                       44                                                           74.6%
Chain emails                                                          36                                                           61.0%
Website/blogs                                                         6                                                             10.2%
Class Action                                                            5                                                             8.5%
Media interviews                                                    3                                                              5.1%
Newsletters                                                             2                                                             3.4%
Approaching politicians                                        1                                                             1.7%

Notes: 1) A total of 59 franchisors provided a response from an expected 286.

             2) Multiple responses were recorded for some respondents.
 
2008 survey carried out by the Asia-Pacific Centre for Franchising Excellence.

Interestingly, this perception could be fairly accurate as according to the 2008 survey carried out by the Asia-Pacific Centre for Franchising Excellence, 44 negative approaches were made by franchisees at group meetings. This is certainly not an ideal situation and can affect the morale of the franchisees and the Franchisor. Nor would a Franchisor feel happy about franchisees stirring the pot by chain emails yet there were 36 cases of this reported with no doubt many more not being reported.
 
So why would you establish a Franchise Council? Are there pros and cons?

Like any committee, yes there are advantages and challenges to setting up an effective council.
 
Effective is the key word here. A franchise council should only meet when there are matters to discuss.

Some of the benefits of creating a Franchise Council are;

Communication
 
  • Councils provide an excellent opportunity for The Franchisor or its representative to engage in meaningful dialogue with a selection of franchisees. This openness creates a feeling of inclusion and respect for the franchisees opinions.
  • The Franchisees feel that The Franchisor is more accountable as they have an opportunity to express dissatisfaction.
  • The Franchisor can gain feedback on proposed new initiatives and products before launching.
  • The Franchisees are able to present their ideas to The Franchisor in a non threatening environment.

Increased Commitment

  • Franchisees who are part of The Council are taking on the responsibility of representing the whole group. This can result in these franchisees having an increased sense of loyalty and commitment to the franchised company.
Increased Trust
 
  • Suspected "Hidden agendas" become obsolete. The Franchisor can speak openly and honestly at council meetings.
  • The Franchisees can broach The Franchisor on sensitive subjects in a proactive manner. Potential problems can be discussed with all parties seeking resolution rather than conflict.

Increased efficiency and sales

  • Yes, franchise councils actually aid in improving the performance of the network.
Disadvantages of a Franchise Council
  • Historically, franchise councils necessitated franchisees travelling to meet together. Travelling incurs costs.
Who should pay for the cost? It would be a very benevolent franchisee who chose to take time out of their business and incur expenses for the "good of the group".
 
  • A poorly structured and managed council can create more problems than it solves. It should not be allowed to be an opportunity for negative franchisees to influence the rest of the group.
How do we form our own Franchise Council?

There are many guidelines to be used when starting a Franchise Council as it is imperative that is structured and run effectively.

Research other councils that work well for their Franchise network and that have achieved positive results. Find out what works and what doesn't for others and assess how you can apply these guidelines in your own Council.
 
© 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.

 

Author: 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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Tags: Franchisee Franchisor Franchising

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