Let me tell you a story.   

All my friends and business associates know my interest in “all things franchising” and often share their experiences with me. One of my business friends told me an astonishing tale which as a Franchisor you really need to hear and heed.

A large franchise, offering a consumer service, that advertises on an ongoing basis on TV, radio and in magazines is the subject of this story.

Let’s call the customer Mary. Mary had rung the local Franchisee on 3 occasions to arrange a quotation for, let’s call the service cleaning. Mary was keen to get the cleaning organised  a.s.a.p. and was really disappointed that she was greeted with a voicemail message on those 3 occasions she called. She left a clear message with a return phone number and asked the Franchisee to call her back urgently.

After a week of no returned call, Mary in sheer exasperation called in to the shop front. The Franchisee Jack was busy shuffling mountains of paperwork and muttering to himself, meanwhile ignoring Mary completely.

Mary, now losing patience with this complete lack of customer service introduced herself to Jack and asked why her 3 calls had not been returned.
“Listen lady, if you had as many people ringing as I do, you’d have to turn your phone off too. I’d never get anything done. Listen to this …….” Jack put his mobile on loudspeaker “you have 62 new messages.” “THAT’s why I didn’t return your calls” Jack shouted. The b…… Franchisor keeps spending all our marketing levy on b……. TV advertising and the phone never stops. I’m having a breakdown. How they think I can cope with all this business I don’t know, but they just don’t listen. Anyway now you’re here, what do you want?”

Needless to say Mary walked out at this point and has shared her tale and complaint with many.

Is your jaw on your chest? Yes of course. It’s an unbelievable but true story.

But could this happen in your franchise? What checks and measures do you have in place to ensure it’s not your business losing its reputation?

Here are some strategies that can assist you.

• Is there a defined level of sales where you advise Franchisees that they will need to employ an extra staff member?
• Are your franchisees capable of running a business? or have they just bought themselves a job?
• Engaging mystery shoppers on a regular basis with the Franchisee’s knowledge ensures that the Franchisees know any major misdemeanor would be identified.
• Are your Franchisees trained and confident in handling busy periods such as pre Christmas trading?
• Do you communicate regularly with your Franchisees regarding national advertising campaigns?
• Are you and the Franchisees testing and measuring the results of your advertising? This is crucial.
• An overload of business spasmodically is not good business practice and is extremely difficult to service. If you know what advertising makes the phone ring, share this knowledge with the franchisees and help them be prepared for the extra business.
• Guidelines and directives regarding new business enquiries are imperative. Every operations manual should detail customer service standards.
• Has your franchise system addressed whether a Franchisee has the choice to turn new business away? This is a very important consideration in any franchise and The Franchisor should ensure that the Franchisees clearly understand their obligations.

It is most businesses’ dream to run an advertising campaign that results in the phone running hot. Before you invest in such a campaign ensure you have the service systems in place to stop the dream turning into a nightmare.

© franchisingplus

Author ; Carolyn Dufton Dip.Bus(franchising)

Carolyn is the principal of franchisingplus. franchisingplus is a franchising consultancy advising and mentoring on all aspects of franchising on a national and international basis.

The content displayed is franchisingplus copyright and can only be reproduced or re-published with the acknowledgement of the author Carolyn Dufton. www.franchisingplus.com.au/contact/

When and how to terminate a Franchisee

Terminating a franchise mid- agreement is a process that should not be undertaken lightly.

The disclosure document states that all terminated franchisees should be listed for the three previous financial years.

No reason for termination needs to be provided in the disclosure document, but terminations do not present well to franchise prospects.

Franchise network morale needs to be considered. Is the franchisee to be terminated known by other franchisees to be unco-operative and a negative influence? or is the franchisee generally popular with franchisees but challenging and non compliant with the Franchisor? Tread carefully here.

So why would you consider terminating?

• The franchisee is not performing.

This can be a tricky one. “Not performing” can be subjective. Do you have a clause in your franchise agreement specifically addressing non or under performance? If you don’t, it would be unadviseable to pursue this line of termination.

• The franchisee is not paying royalties.

This is a much easier situation to prove. Even the worst franchise agreements I see (and there are some shockers out there…) contain a clause relating to termination in the case of non payment of monies due to The Franchisor.

The question should be why aren’t they paying their royalties?

•  The franchisee is in breach of the system and procedures and is non compliant.

Franchisors have varying approaches to non compliance. Some look the other way and allow non compliance to continue as “it’s all too hard”. Non compliance can be extremely damaging to a franchise system and impact upon other franchisees. Check the Franchisor obligations in your franchise agreement to remind yourself what your obligations are in respect to protecting the brand and the other franchisees’ reputation by association.

Mediation can work well to resolve disputes and should not be overlooked. Either the Franchisor or the Franchisee can request mediation and the Franchising Code states that the other must agree to attend and share the costs equally.In Australia the Office of the Mediation Adviser can assist Franchisors on 1800 150 667.

Termination should always be a last resort.

Continue reading →

A Blame Game

The chances are that you’re reading this article with a preconception about Franchising.

The very word Franchising can inflict pain upon failed ex-franchisees who are still harbouring grudges against a Franchisor…. and for some Franchisors, blaming franchisees for the network’s failure is standard conduct. Whilst for some entrepreneurs, franchising conjures up a cash cow concept. Franchising is the goose that will lay golden eggs.

The truth is, that for franchising to work effectively, each party, that is The Franchisee and The Franchisor must firstly understand and secondly follow through with their obligations.

Best franchise practice provides a transparent and clearly documented system. Obligations are stated in the franchise agreement and are legally binding.

In my experience many “injured” ex franchisees were, to varying degrees, responsible for their own demise despite the fact that Franchisors are often blamed for their failure.

 As for Franchisors who consider franchising to be a cash cow, I would suggest that a responsible Franchisor would be investing substantial time, money and effort into growing and supporting their Franchisees. There’s no such thing as a free ride.

For all parties involved in franchising there are some common rules for success. Continue reading →

I was recently invited to write a chapter in a book regarding how to keep motivated in business.                                                                              

It was interesting to reflect and consider this. I came to the conclusion that motivating myself when I was a Franchisor was a very different matter to self- motivation as a franchise consultant.

In franchising it is a more complex matter of not just motivating yourself The Franchisor, but also motivating the franchisees.

Technically, Franchisees should be self motivated business owners.

In an ideal world franchisees take absolute responsibility for their own personal and business development.

However there are always some business owners who need a helping hand.

A Franchisor has much to gain from creating motivated franchisees;

• Increased income
• A happy network of franchisees
• Happy franchises = happy clients
• Happy franchisees + happy clients = one very happy Franchisor!

So how would you go about motivating franchisees? Continue reading →