The question is, do Franchisors really have a choice as to whether or not they should grow their franchise network ?

Let us consider;

• How will a potential Franchisee view your network if you have not sold any new franchises in the last year?

This could be seen as being a more high risk venture for them. It could suggest that you are not serious about your role as a Franchisor looking to grow the business for the benefit of all.

• How do existing franchisees perceive a stagnation in growth and expansion? Could they feel more vulnerable and feel that the Franchisor is losing sight of the big picture?
• Ask yourself, why aren’t you selling more franchises?

Is it a deliberate strategy? Are you consolidating? If so, let your franchisees know that this non expansion is only temporary and keep them informed of your franchise growth plans so they’re not left guessing.

• Is there a ”right” number for annual expansion plans?

Although there is no right number, the best expansion policy is gradual and consistent so as not to overwhelm the Franchisor and burdon the infrastructure. The larger the system and managment infrastructure the greater the capacity there is for expansion.

• Franchisors need “new blood” in their system. It’s good for the business. BUT it is vital that Franchisors do not compromise in their new franchisee recruitment process.

Franchisees must meet the necessary criteria to ensure a continuing high standard of franchise and alignment to the current system and people.

Professional advice should be sought to assist with the growth strategy.

 © 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/

Recently I had a very unsatisfactory customer service experience with a local franchised business. The manager wasn’t on the premises so I asked the young assistant to ask the manager to call me. He didn’t, so I rang the shop to be told that the manager was too busy to talk to me about their customer service.

I decided to see if The Franchisor was more customer service focused and aware, by posting on both Facebook and Twitter. It went something like this “Had a truly awful experience at ‘company name’s’ local store today, and the manager doesn’t care”. I waited to see whether the company would pick up the comment. They didn’t.

So to give them a second chance – I posted again. I had lots of comments from other people who saw the post but none from the company.

Google alert is a tool that allows businesses or individuals to monitor for free, what is being said about their company in the online world. It is a free service.

You can’t stop people talking about you online, but being aware of what they’re saying allows you the opportunity to respond quickly to diffuse a situation.

You do not have to be engaged in social media to use this tool. Google will send you an email of whatever message they find online. Twitter will also pick up any “mention” of you if you subscribe – again for free.

In my opinion all businesses and Franchisors in particular, need to be informed about what is being said about their businesses online, and Google Alert provides an easy and free method of achieving this.

Go to www.google.com/alerts to set up your alert today. No excuses now!

 © 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/

Listen to Carolyn speaking with Scott Levi on 92.5 ABC Central Coast.

Visit ABC radio website

Learn more about The F World Book

Why I wrote The F World book

The book has been “in me” for a long long time. Every client I met and every franchising story I heard provided material for the The F World book.

I had reached a point where I was bursting with stories and information to share, and knew that writing a book was the outlet I needed. I had already completed a 3 part CD series for clients (Discover Your Franchising Potential) considering franchising, and this has been really well received.

This time, I wanted to write a book for everyone.

The F World book is a generic franchising commentary and will appeal to anyone wanting to know more about franchising. The book is not a hard sell for franchising. It is a ‘warts and all’ objective commentary on the franchising world and its common practices. As I say in the book, not everyone is suited to franchising.

As a franchising consultant /coach, I work with Franchisees and Franchisors alike, so I have no bias to any particular sector of the franchising industry. Some of the things I see in franchising I love, whilst other situations I encounter I detest.

Much coverage of franchising is biased. The media can sensationalise a “hard done franchisee story’ and a franchisor can spend a large sum of money to obtain great editorial about the wonders of his franchise.

I wanted to write a book that told the truth about franchising.

The F World book has been written in plain everyday language for those looking to learn more about the reality of small business franchising. In particular it will provide insight for potential and existing Franchisees or Franchisors in small to medium franchise networks.

Franchisees and franchisors are asked to review their franchising performance and the book then gives examples of how to be ‘the best’.

I sincerely hope that readers will learn from the experiences and mistakes of others as described in this book, particularly in the ‘scary’ chapter.

You can buy a copy of The F World book here: http://franchisingplus.com.au/fworld/

Or for US and UK residents visit: www.amazon.com

© 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/

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/

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.

So how do I terminate the franchisee? 

Check your franchise agreement for the specific clauses relating to termination and follow the process point by point. The franchising code of conduct states that in the case of a breach of agreement by the franchisee;

The franchisor must give reasonable notice of the breach to the franchisee

Tell the franchisee what needs to be done to fix the breach

Allow a reasonable time for the breach to be fixed (not more than 30 days)

If the breach is fixed then the Franchisor has no grounds to terminate on this basis.

If the Franchisor wishes to terminate the agreement on other grounds, reasonable written notice must be provided with the reasons for the proposed termination.

The franchisor does not have to comply with these termination conditions if the franchisee:

• no longer hold a licence needed to carry on your business
• become bankrupt or insolvent
• abandon the franchise
• are convicted of a serious offence
• operate the business so that it endangers public health or safety
• agree to terminate the franchise agreement

The franchise agreement must be clear on this termination process. If you feel your agreement does not contain a comprehensive termination clause contact a lawyer who understands franchising or franchisingplus for assistance with upgrading the agreement.

© 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/

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.

• Seek professional advice – gain clarity

Most of the Franchisees I see with problems in their franchise did not have specialist pre purchase franchise advice at the outset.

 Franchisors should develop a system and legal documentation with specialist assistance.

• Understand the nature of franchising

Research the franchise industry extensively before getting involved as a Franchisee or Franchisor. Make informed decisions.

• There must be acknowledgement that a Franchisee is a self employed person who is responsible for their own business success.
• Address potential issues in the franchise pro-actively using honest communication and dialogue before they become unmanageable.

Mediation is an attractive and cost effective practice to resolve Franchisor – Franchisee differences. The franchising code of conduct states that if one party requests mediation the other party must agree and that mediation costs are shared.

When blaming is replaced by acknowledged responsibility, Franchising really can provide a win –win situation for both Franchisor and Franchisee.

© 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/

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?

Here are some ideas for you to consider;

Money!!

Nothing motivates a business owner like money. It sounds so simple doesn’t it? Yet when I review Franchise systems which I do on a regular basis, I am astonished at the fact that many franchise systems do not allow a franchisee the opportunity to make money.

If you are not 100% confident that your franchisees can make money, or if your franchisees are telling you exactly that and you’re ignoring their plight; seek advice now.

Motivate by example

Everyone loves hearing success stories.

Encourage your “star” leading performing franchisees to speak at your group meetings and to share their tips on what works for them.

Be passionate and get excited!

When speaking at conferences and seminars I often get feedback about how passionate I am  about franchising and that I actually trigger excitement in the audience through the infection of my passion.

As a Franchisor you should be passionate about your business.  It should be easy for you to share the passion for your success in the business which will in turn motivate your franchisees.

Franchisees need to believe to achieve.

Accountability and follow through

Why are business coaches so successful in increasing business performance? Because they keep the business accountable.

Have you ever been to a conference where an amazing motivational speaker has made a really big impression on you?

You feel upbeat.

You start making big plans…… in your head.

………..for at least 24 hours, or less.

Help your franchisees to remain motivated by encouraging them to follow through on the plans they make whilst in a motivated state.

Specifically to write down their thoughts and ideas as they occur and to share them with The Franchisor.  Those thoughts can then be turned into shared goals which you can both work on to make it possible.

Motivate yourself and be consistently positive

Nothing is less motivational than a whingeing Franchisor.

Your franchisees have chosen to adopt your business system and brand and to pay you money for doing so. Don’t disappoint them.

Read motivational material every day.

Mix with high achieving business people by networking or master mind groups

Write down clear goals and review them regularly.

Achievement is motivating in itself

Nothing motivates more than success itself. It’s an upward spiral. Work at achieving your best and the best for others and reap the rewards. This is truer than ever in a franchise situation.

© 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/

• Franchising profits are up according to the latest survey from PricewaterhouseCoopers.
• Franchisor profits rose an exceptional 19 percent, while franchisees showed growth about twice the rate of the Consumer Price Index.
• The current franchise profit levels of about six percent are set for a huge jump to just under 46 percent over the next three years, the report indicates.

The bad news

• The sector does face challenges, not least the funding of franchisees who are unable to get the appropriate finance from banks, an issue 73 percent of franchisors cite as a major hurdle.

The really awful news!

Have you been reading about the chaos surrounding the demise of Allied Brands? Franchisingplus believes that this debacle is a blight on the franchising sector.
The company’s shares remain suspended from trade on the Australian Securities Exchange, its Cookie Man chain is in the hands of liquidators and reports from disgruntled creditors are growing.
The company is also locked in a dispute with the global owner of the Baskin Robbins brand, US company Dunkin Brands.
To add to the chaos The Department of Immigration & Citizenship has accused Allied Brands of breaching immigration laws by running an elaborate immigration rort where it sponsored a group of Korean nationals to work in administrative roles under 457 visas, put them to work in Baskin Robbins stores and in some cases sold Baskin Robbins stores and in some cases sold Baskin Robbins franchises to their family members.

To add to the bad press, the CEO admitted last week that the company has fallen behind on some employee’s superannuation payments with employees acknowledging they have little hope of being recouped for their losses.

Any prominent negative media story like this affects all franchising personnel:
               
             Franchisors selling franchises
             Franchisees trying to onsell a franchise
             Franchise advisers who establish new systems
             Any franchise professional who does not want the
             reputation of franchising to be further tarnished.
             Financiers who are nervous about putting all their
             financial eggs in one basket. If a Franchisor goes down and
             they have funded many of the Franchisees in that system, the
             impact for a lender can be severe.

These bad news stories only reinforce why creating and then maintaining responsible, sustainable  franchise systems is so vital for the benefit of the reputation of franchising and all  involved in the franchising sector.

© 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/

So let’s explore the concept of expanding overseas.

Firstly, before even considering overseas, a Franchisor needs to be confident that the franchise business model is working efficiently, effectively and profitably. A business that is not performing well in its own country is highly unlikely to perform any better internationally!

Why would you consider expanding internationally?

It’s essential to have identified and thoroughly examined the objective and anticipated outcome for expanding the business overseas.

Some reasons for expanding overseas may include;

• Demonstrated interest from a party overseas
• International distribution of an existing product under a franchised system.
• The desire to do business in a specific country due to family/friend ties.
• The sheer challenge of it!
• Limited home market
• Research identifies that your product/service would perform well in specific overseas markets.

What to do next?  

Just as you should develop any new business idea with a written business plan, expanding overseas deserves the same attention.

A proven concept in one country does not guarantee success in another.

• Prepare a thorough business plan on the concept of overseas franchising.
• The business plan should incorporate a well thought out SWOT analysis.
• Spend time and research developing a budget. Overseas franchising does not come cheap!
• Identify the countries that you would target for expansion in order of appeal.
• This should be done with assistance from local professionals in the countries of your choice who have “local knowledge”. Be prepared to spend money on researching local markets.
• Consider opening a flagship company operation in the country of your choice. This could be a lot cheaper than starting a franchise operation from scratch. This is a great way of learning about business trends in your “new country”.

This is no different to having piloted a business prior to franchising.

• Register a trademark in the country of choice.  See below for more on overseas trademarking 

What not to do

• Rush in without due consideration.
• Underestimate the cost.
• “Do it on your own.” Consult with experts.
• Expand overseas for the “sake of it” or the “kudos”.
• Underestimate the ongoing involvement in an overseas business
• Abdicate from the overseas operation because of distance
• Operate overseas without involving the local people.

Overseas trademarking

• The Madrid System for the International Registration of Marks (“Madrid Protocol”) and the Paris Convention for the Protection of Industrial Property (“Paris Convention”) are two very important international treaties regarding the registration of trade marks.
•  The Madrid Protocol provides a one-stop filing system so that the franchisor can file for trade mark protection in their own country as well as  targeted countries at the same time. It does not give you an international trade mark that is recognised by all its member states or all countries across the globe, but does provide the convenience of filing in different countries at one go and also reduces the costs of filing.

 http://www.ipaustralia.gov.au/trademarks/international_index.shtml

•  The Paris Convention provides a very useful mechanism allowing the franchisor to file the trade mark in their home country first at an earlier date and subsequently, within a given time frame, when they decide to file the trade mark in the targeted country, they are able to claim priority or use the first and earlier filing date in their own country as the date of filing in the targeted country. The Paris Convention gives the franchisor time to source for funds before filing for trade mark protection in the targeted countries and the peace of mind that comes with knowing that they can be protected by filing first in their home country.

   http://www.ipaustralia.gov.au/resources/international_agreements.shtml#paris

© 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/