My franchisees are behaving like children!
Article by Andrew Fraser
Harper MacLeod LLP
“My franchisees are behaving like children” cries the exasperated franchisor. “That’s normal” replies the consultant, “Here’s why...”
There are 4 stages in the growth of a franchisee: Childhood, Teenage, Maturity and Old age. A Franchisor has the delicate task of managing each stage to get the most out of their franchisee.
At this early stage a franchisee requires a lot of care and attention. It is here where they learn how to run the business (and, if you allow it, develop bad habits). They require a lot of ‘hand-holding’ and are prone to mistakes and plenty of nerves.
It is important for you to be on hand here to help the franchisee when they get into trouble. When they fall, you need to pick them up and tell them why they fell and how to avoid doing it again.
The franchisee has learned how the business works and is making a success of it. This is all down to the franchisee’s own brilliance as a business person (nothing at all to do with that meddling franchisor). You are deemed to be out of touch with the business and doing everything wrong. The franchisee knows better.
As with parenting, this is a difficult stage to manage for any franchisor. It is important to give the franchisee some freedom here (provided that they have earned it). However, never let them forget who is in charge. It is equally important that you listen as the franchisee is still keen to develop the business – they may come up with genuine ways of improving your operation. Franchising legend has it that McDonald’s ‘Big Mac’ was the brainchild of a franchisee.
This is the prime of the franchisee’s life. They are making money, growing the business and engaging constructively with you.
The quicker the franchisee gets to this stage and the longer they stay there, the better.
Lethargy sets in. The franchisee is content with their lot. They’ve had a good run, made all they can of the business and are happy to sit back and enjoy the good life.
This is almost as tricky a time for you as it was in the teenage years, however the problems are different. How do you keep the franchisee motivated? How do you encourage them not to rest on their laurels? What makes this stage particularly difficult is that you have known the franchisee for a long time now, you’ve been through a lot together and shared many a laugh. However, the franchisee is not driving the business forward anymore and profits are beginning to wane. It is at this point that you have to begin discussions about ‘Succession’. You need to encourage the franchisee to consider selling on his franchise while it still holds a lot of value.
Andrew Fraser, AMO Consulting
Last Updated: 29-August-2011