Monthly Archives

October 2015

How forward-thinking franchises coach their franchisees

By | Franchise Coaching

Congrats. You’ve just signed a new franchisee. Now the hard work begins. You need to train them. You need to transform them into stellar franchisees. You need to imbue them with your unique culture. But you’re only face-to-face for a few short days or weeks. After that short period, they will be on their own in their assigned territory. How do you ensure they succeed?

Alternately, maybe you’re an established franchise that is stagnating. You’ve known this for a while now but you’ve just recently decided on your strategy to improve. But how do you assist your franchisees during this endeavour when most are resistant to change and set in their own ways? Your brilliant plan will fail if not properly executed.

In both of these scenarios, the franchisees must learn new things. If you’re serious about continuous franchise improvement, it is important to note that this won’t happen overnight. This will require constant efforts over a long period of time.

We’ve worked with a number of franchises over the years and have come to be firm believers in the power of the self-assessment.

Have your franchisees help themselves via self-assessments

Self AssessmentWhat are self-assessments? Simply put, they are questionnaires filled out by the franchisee and/or their store manager(s) on a recurring basis. The questions themselves vary significantly per franchise.

Some see self-assessments as a copy or subset of the field audit questionnaire that is simply filled out by the franchisee instead of the franchise business consultant. Because geography is not an issue, the franchisee can assess themselves on a frequent basis (weekly or monthly) and make sure they’re on track. Let’s call these operational self-assessments because they mainly track operational information (temperatures, order times, cleanliness, etc.).

Others see self-assessments as a way to change higher-level, longer term behaviour. They ask questions that guide the franchisee into working on the business instead of in the business. For example, “Have you reached out to a leader in your community this week?” or “Have you sponsored any charity events in the past month?”. The actual answer to the question is not important, but if you’re answering these on a weekly or monthly basis, you understand what’s expected of you if your goal is to be a stellar franchisee. If you are engaged and serious about your business, you will want to surpass your past results. The purpose of these questions is to engrain a certain mindset over time – to transform behaviour based on the company’s culture and values. Let’s call these transformative self-assessments.

In our mind, this latter definition of a self-assessment is more powerful than the former. Operational self-assessments are typically delegated to the store staff to monitor standards whereas transformative self-assessments ensure certain behaviour is top of mind and, as per their name, are truly transformative.

In the wild today, few franchises do mindset self-assessments on a formal basis – only the forward-thinking ones do. (And one of the reasons for this is no technology was available to make this easy – up until now.) Most of the one’s we’ve seen are in the mobile service industry – and we believe it’s because it’s much harder to perform operational assessments in their context. It’s harder to have a second pair of eyes review an individual job than it is to walk into a restaurant and start checking temperatures.

Furthermore, the mindset self-assessments that we’ve seen in most franchises are done much too infrequently (annually, in most cases). If a franchisee is only taking the time to reflect on the higher-level aspects of their business annually, they are gaining awareness of certain issues – but not necessarily changing how they behave.

The reason transformative self-assessments are so powerful in the context of a franchise is because the franchisor knows the behaviour that should be accomplished to improve performance. They’ve seen the top 20% of their franchisees operate this way and are trying to propagate this behaviour to the others. When properly aligned with the franchisee’s goals, transformative self-assessments work wonders because it helps them keep them in a mindset of continuous self-improvement.

A word of caution: franchisee engagement is obviously required for transformative self-assessments to work. Self-assessments thrive on the franchisee’s intrinsic desire to improve their condition. Apathetic franchisees won’t magically change their ways – that requires rebuilding the franchisee relationship from the ground up. We recommend you take a look at the writings of Greg Nathan for more information on the psychological aspects of this subject.

Leveraging technology to help change franchisee behaviour

To illustrate how technology can help, let’s firm up the ideal process. First, a library of self-assessments must be created with certain goals in mind (for a new franchisee, for an established one wanting to increase sales, for an established one wanting to prepare for becoming a multi-unit franchisee etc.).

We should reiterate that the transformative self-assessments should be aligned with their personal goals and ambitions for increased success. Franchisees wanting to spend more time with their family now that they’ve reached their location’s peak potential shouldn’t be focusing on the same elements as someone who wants (and can) significantly increase sales over the next year.

Second, a frequency must be established. For newer franchisees (first three months), weekly assessments are typically adequate. Once they graduate, maybe reducing the frequency to once a month and/or changing the self-assessment questionnaire may be desirable. Finally, for established franchisees, monthly self-assessments are also desirable.

Third: automation. This is where technology comes into play. Once configured in a software system, such as our franchisee polling app, the right self-assessments can be pushed out to the right franchisee at the right frequency in a fully automated fashion. Reminders can be sent out automatically when deadlines are missed. The franchise coaches can (and should) still review the results and assist the franchisees in their journey, but they don’t have to constantly ask for information from their franchisees.

Franchisors obviously benefit when their franchisees are more engaged and unit-level economics improves. But managing the self-assessment process in software also provides them the benefit of learning trends. For example, what tasks are their newest franchisees typically not performing? This may indicate that the newer franchisees are overwhelmed, not properly trained or don’t see the value these tasks.

 



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Franchises: A strategy to improve brand consistency

By | Brand Consistency

Yesterday, your clients chose to spend their hard earned dollars in one of your locations. But will they come back?

Most franchise systems are transactional in nature (that is the customers visit the location, make a purchase and leave – concluding the transaction) but to become truly profitable these businesses need to transform first-time visitors into loyal customers who return on a regular basis and/or brand advocates who tell others about the franchise.

For this to happen, they need to have an exceptional customer experience every single time. If you want them to leave with a positive image of your franchise, it is very important that you deliver a consistent experience – and your brand is a big part of that equation.

Hundreds of little details have an impact on a customer’s impression during their visit in your location… and that’s precisely what makes it difficult. It’s a continuous effort by your whole team – day in and day out.

If you don’t pay attention to the details, if you miss any single element, you risk transforming the exceptional experience to simply a good one – or worse, an awful one. Losing a customer is one thing – but creating detractors who tells others to avoid your business will kill it. What’s even worse in the context of a franchise is that all locations are independently owned: one bad apple in the system can negatively affect all the other innocent bystanders. This problem is compounded with social media which makes it trivial to quickly spread bad news on a global level.

Most franchisees get the big things right, but overlook some little things. It’s somewhat funny how trivial some of these little details are: but they are still important. If you forget to refill the catering menu holder, you’ll eventually run out of catering menus. How will new customers know that you offer catering? Catering sales will go down and, because of such slim margins, that minor oversight could have a big impact on your bottom line. Another example: if some of your employees are wearing worn-out uniforms from 2005 with your old branding, customers will subconsciously prefer to visit that new place across the street because everything feels fresher.

There are a few root causes to most brand consistency issues:

  1. Expectations are not properly defined. Everything is on a best effort basis.
  2. The importance of certain elements is not communicated. Some people need to understand the reason behind the work they are doing, or they won’t do it.
  3. When you see the same thing every day, you don’t notice issues. A fresh pair of eyes can work wonders.
  4. Resistance to change. Sometimes people resist for financial reasons and sometimes it’s just because they’re doing what they’ve always done.

How can we improve brand consistency?

Step 1) Plan: Define and communicate expectations

The first step to improving brand consistency is also the most obvious one: everyone needs to be made aware of expectations. When a system has been left to its own devices for many years, each location ended up creating its own set of standards. Someone needs to step up, analyze the current situation, formalize the expectations for the improved system and communicate it to all stakeholders.

As you know, getting everyone on the same page in the context of a franchise is a difficult endeavour. Competing interests sometimes transform simple tasks into one that is as difficult as herding cats. Therefore, it is important that all stakeholders be made aware of the rationale behind the standards. Not everyone may agree, but transparency and consistency in the decision making process help improve engagement. Of course, franchisors must provide leadership that franchisees are willing to follow.

Step 2) Measure: Compare yourself against the gold standard

Once you’ve established your expectations, how do you measure your current performance?

One way is to review customer satisfaction surveys and mystery shopper scores to observe issues which need to be addressed. The great thing about the information generated by customers is that they will tell you exactly what your weaknesses are and help you determine if the standards you established are sufficient and that you didn’t miss anything important. Customers visit the location every day and, if you’ve made it easy for them to communicate with you, they will alert you as soon as something is off. It is a continuous measurement of how a location meets or exceeds standards.

Still, the best way to measure the gap between the communicated standards and the actual results in the wild is via field audits. Franchises typically send franchise business consultants (FBCs) to every location to ensure compliance to operational standards and to coach the franchisees to improve performance.

Why is this the best way, you ask? The FBCs perform the field audits looking at both what customers see but also, and more importantly, what’s going on behind the scenes. Painting a complete picture (front & back) is what makes field audits so powerful. Someone with domain expertise will obviously give more insightful advice than a simple customer. Furthermore, when the team is properly calibrated, franchise business consultants will give consistent feedback. Anyone who visits the location should give the same feedback.

One key element to remember: your franchise’s culture is critical here. Everyone must understand that auditors are coaches, not police officers pointing out violations. It is a collaborative effort to improve performance.

The main drawback of field audits is that they are point-in-time evaluations. Most systems perform visits once every quarter and sometimes only once per year. Obviously, when your goal is to improve brand compliance, the more often you visit, the better. Systems who have continuous improvement at heart aim to visit every location once per month when geographically possible.

Combine the two approaches and you’ll be able to properly measure brand compliance.

Step 3) Improve: Put processes in place to quickly find and address issues

Even if we do our best, problems are bound to occur. To improve brand consistency across all locations, being aware of issues is not sufficient. Someone needs to be accountable for getting problems solved in a timely manner. Otherwise things will fall through the cracks and issues will persist.

This is where technology can play a great part to increase accountability and reduce the time it takes to respond to an issue. A good field audit system will not only track follow-up items on a per-audit basis but also help you quickly identify and address system-wide weaknesses via training programs. Furthermore, a good customer satisfaction program will broadcast an alert when an issue is reported and ensure someone addresses the issue as soon as possible.

Continuous Franchise Improvement

Put steps 1 to 3 in action and you’ve started the virtuous cycle of continuous franchise improvement. You’ve defined measurable objectives, have a process in place to identify the gaps between your current performance and your standards and have tools in place to address issues in a timely manner.

Improving brand consistency is a long term effort that requires continuous work on a daily basis. Exceeding customer expectations day in and day out is difficult but it is also very rewarding as it is a great way to differentiate your brand and ensure its future prosperity.



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5 key elements to extract from your franchisee field audits

By | Field Audits

Established franchise systems have been performing franchisee field audits for decades. Sending franchise business consultants to visit every location periodically is a big part of what the operation’s team does every day.  These visits obviously help ensure compliance to operational standards but also, and more importantly, they help improve franchisee performance.  Successful franchisees not only write bigger royalty checks, they end up happier and more engaged, which helps them sell more franchises.

As such, a big portion of the operations budget is attributed to the field operations team to establish this virtuous cycle within the franchise. However, did you know that most franchise systems are throwing away valuable information gathered during these field audits and consequentially wasting money?

If you’re a franchise’s VP of Operations, Regional Manager or Director of Operations, here are five things you should be getting out of your franchisee field audits. If you’re not getting this information today, know that there’s a better way of performing field audits.

1) You should know overall system performance

If your franchise’s business consultants are filling out paper forms, Excel spreadsheets or simple online surveys, odds are you’re not compiling this information appropriately after the fact.  The results are presented to the franchisee and that’s the end of the story. What if you had access to the aggregate results across all visits?

Find system-wide weaknesses

When you have access to the combined audit scores, you’re able to systematically address your system-wide weaknesses via training programs.  Your decisions are based on concrete data, not the gut feelings of your franchise business consultants. The impact of your training programs is also measurable.

2) You should have drill-down ability

Having system-wide performance is the first step but the ability to slice and dice the data based on time periods, store regions or the auditor is critical.  This is how you can narrow down on your weaknesses to try and understand their root causes.

Filter field audit scores

For example, maybe you’ll discover discrepancies in the way auditors evaluate a certain element or confirm that the issue is localized to a particular region.

Find issues localized to certain areas

With this additional information, you’ll be able to focus your efforts on territories that deserve it most rather than expending efforts in a national training campaign where the issue is localized.

 3) You should see the evolution of your scores over time

If you hold two field audit reports side-by-side, you can compare and contrasts the variance between the two snapshots of the franchisee’s performance.  Most franchises formally visit their franchisees once per quarter – sometimes with quick visits in between.  It becomes difficult to compare those evaluations and figure out any interesting trends.  That problem is compounded system-wide when you have hundreds of evaluations to compare.

One can cut through the complexity by comparing the evolution of the aggregate section scores per month.

Your field audits evolve over time

Without having to parse through hundreds of audit responses, one can get an immediately sense of any anomalies. Above you see that Quality was much lower during the month of April 2015. There are many potential reasons for this but a graph like the above could help you come to the conclusion that a limited-time-offer (only present during that month) is not being handled properly at the store level.

 4) You should be aware of individual auditor performance

It has been proving that a great coach can have a huge impact on a franchisee’s profitability and engagement.  It makes sense to have your best consultants visit the locations where they can have the biggest influence. However, being a franchise business consultant is tough. They often get a mixed-bag of franchisees – each with specific issues requiring different approaches to help improve both performance and compliance – too many troublesome units has an impact on morale and you don’t want your best coach to jump ship.

As a VP of Operations, you want to keep your coaches engaged with challenging work without overwhelming them. Thus, some thought should be put into how you segment territories.

Breakdown scores by franchise business consultant

You should be able to track and compare the performance of your auditors to help you segment territories but also to ensure that everyone is performing the evaluations in the same way. The best franchise systems have their coaches perform a calibration run on the same unit on the same day to ensure the results are comparable.

 5) You should have visibility into follow-up tasks completion

It is more than likely that a serious field audit will reveal issues of varying degree of importance.  What’s important to know is if the action items that were recommended are actually completed.  Can you trust your franchisees to remember everything you’ve asked of them with all that’s going on in a store on a daily basis? If they forget something, the field consultants will only discover this fact months later. In that time, disgruntled customers affected by these issues may have negatively impacted your brand via social media.

Follow-up tasks are key

Having a system to make sure that nothing falls through the cracks is a critical element of continuous franchise improvement.  What good is finding issues if no one is fixing them?

Leverage franchisee field audits to make data-driven decisions

In this article, we’ve shown five different elements that can be automatically generated from the audits you’re already performing today. Byleveraging the appropriate technology to perform field visits, you can reap the rewards of this additional information without any extra steps.  Start analyzing your field audit today instead of throwing that information out the window.



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