Category

Franchise Business Plans

How Key Performance Indicators (KPIs) Work with Business Plans

By | Franchise Business Plans, KPI
Franchise KPIs and Business Plans

Business plans contain Key Results (KR).  A subset of these key KRs are the Key Performance Indicators (KPIs) used by the franchise to measure its performance. It may seem a bit like “alphabet soup”, but knowing these acronyms is key to growing your franchisee. Naturally, KRs and KPIs used by a franchisor are very tightly related to their vertical.

If you are looking at a restaurant business, they will be looking at food costs and labor costs as the key drivers for the business. Other verticals focus less on controllable costs, as they are not as impactful as simply increasing top-line sales. In environments such as commercial printing, for example, the focus shifts to KPIs which drive the sales team such as number of calls made, quotes submitted or quote conversion ratios.

Similar to the detailed discussion in FranchiseBlast’s Scorecard e-book, we can define KPIs that are always important to watch. There are normally 12-15 of them at most, to avoid flooding the franchisee with information.  What is different with business plans is that based on your focus areas, you may bring back a subset of these same indicators, but you’ll normally dive deeper in your weaknesses.

The business planning cycle gives you the opportunity to take a step back and observe an area where you want to focus. Your base KR will be around the KPI you’re already tracking in your scorecard, but you’ll develop ideas around this which will augment this KR with other KR which will measure the impact of Initiatives you will be doing.

Example KRs for Restaurants: Check Size

Restaurants typically look at average check size as a metric in the scorecards. Imagine you are building a Business Plan for a franchisee. You look at their scorecard and observe the average check size is their biggest weakness.

One KR would be to increase the average check size to the same level as the average franchisee.  That is a great idea, but it is not actionable if that number has not been moving in a while. So it is a good opportunity to think through some potential root issues. This is best done as a brainstorm together with the franchisee.

In this case, imagine that together you came up with the following ideas:

  1. Staff is not upselling enough, and they need training.
  2. A larger proportion of your morning customers pick up only a coffee and then leave.
  3. Your night staff offers too many discounts.
  4. You increase prices as recommended by the brand last year because a cheaper competitor set up shop next door.

After the brainstorm, you and the franchisee can pick one or two of these to tackle at the same time. So, your business plan could have the following KRs and Initiatives:

  • 100% of the staff redoes the upselling training course before the end of June
    • Related initiatives include: Setting up a training day, having 90% of the crew completing the training, etc.
  • An average of 10 people per day buy a locally-sourced energy bar before 11 am this quarter.
    • Related initiatives include: Stocking enough energy bars, ensuring every customer is offered one, and maybe the energy bars could be included in the above training on upselling, etc. (yes… one initiative can affect multiple KRs).
  • Increase the price of 10 of the 20 top-selling items by 3% before the end of July.
    • Related initiatives include: Review competitor prices to find the easiest price increase opportunities, change menu boards, etc.

As you can see, these key results are very specifically related to your theories about what you think you can do to drive up the average check size.

Measurement

You need to be sure you can easily measure these KR from the line of business application which generates them, as they will not be as convenient to access as the metrics from the scorecard.

A major advantage of this approach is that when you do your post-mortem at the end of the period, you can go back and see if you achieved your main objective –  Increased the average check size. At the same time, you can review each of your theories that you had outlined to drive that growth. The value of franchising is in the network effect. If you find something that works for one franchisee, it can also be applied to others in the system.

If you did the upselling training and no one is buying additional elements, then either you’re not executing properly or training was not the right idea.  In the next period, you’ll want to find new theories to try.

Last Word

Overall, KPIs and business planning are tightly integrated. Throughout the process, it is good to be a guide for your franchisee as they navigate business planning.



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Proactive Vs. Reactive: The Franchise Support Spectrum

By | Franchise Business Plans, Franchise Coaching
proactive and reactive

Franchise business plans accelerate performance so more and more brands are encouraging people to use them.  This is something that we all strive for, but first, let’s take a step back and talk about franchise support from the big picture.

In a franchise environment, the Franchise Business Consultant (FBC) is the bridge between the franchisor and the franchisee.  They have the toughest job in franchising, having to balance emotions with pure numbers, compliance with coaching, and more.

If you think of their interactions with the franchisees on a spectrum from reactive to proactive, the franchise business plan is the most proactive element of their job.

Most Reactive to Most Proactive

The following list outlines the most reactive to the most proactive activities that can happen in the course of supporting your franchisees.

proactive reactive spectrum

Acting as a front-line employee

FBCs are often team players, and when they see a unit that is busy or otherwise needs help they just jump in and help, such as making sandwiches with the hourly staff. This sends a down-to-earth helpful signal, after all ‘no one is too tall to pick up the luggage.’

The downside of this approach is that it is highly reactive. The FBC is not utilizing their skillset, and not offering their true value to the unit.

Responding to problems

Getting calls, emails, and texts about problems can be a big part of the FBC role. While it provides excellent support, it does little to better the circumstance of franchisees. A business is like a project, and if you are not helping franchisees move forward, they will start moving backward.

Performing field audits to ensure compliance

Compliance-oriented audits are a core part of the FBC’s role. Walking around and finding problems to fix is important for a range of reasons, from health and safety to brand consistency. At the same time, this is reacting to what is not happening, and ultimately it is looking to past behavior, rather than on future actions.

Training staff and franchisee on compliance

Training staff on compliance and brand consistency, which is the baseline is something that is focused on future behavior. This activity is definitely moving towards proactivity and we know that it is the hundreds of little things that make support outstanding.  At the same time, training on the minutia of operations doesn’t give the franchisee the opportunity to look at the forest for the trees, like environmental or competitive changes, for example, which could be of great importance to their survival.

Reviewing the scorecard and coaching to improve performance

Taking a step back and reviewing KPIs, strengths, weaknesses, and coaching to bridge the gaps is one of the most proactive things that you can do as a franchise coach. On a scorecard, there will be leading indicators and lagging indicators, and a combination of both will help your franchisees.

Business planning

Putting a process in place to define the right goals and execute towards them is future-focused, so it tops our list of proactive franchise support activities. Business planning is working on the business, instead of in the business.

Balancing Act

FBCs, like the rest of us in business, can get”too busy mopping the floor to turn off the faucet.” Although the role will likely never be 100% proactive, balancing proactive and reactive activities is a great first step.



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Objectives and Key Results (OKR) in Franchising

By | Franchise Business Plans
OKRs in Franchising Intro

Forward-thinking franchisors are now embracing Objectives and Key Results or OKR .The framework was originally developed by Andy Grove at Intel and has been used by organizations such as Google, Twitter, and LinkedIn. While the framework has documentation in the form of videos, bestselling books, and worksheets, the three main concepts will help you through their use, for the purpose of Business Plans.

Objectives and Key Results Key Terms

Objective (O)

The Objective is your goal which aligns everyone in simple terms.

Example: Grow business with sales and marketing.

Key Results (KR)

Key Results is how you measure success, which you cannot control 100%.

Example: Add 250 new customers to our loyalty mailing list.

Initiatives (I)

Initiatives are activities trying to achieve objectives, which you can control 100%.

Example: Perform three marketing campaigns on Social Media.

How to Use OKRs in Franchising

The birthplace of OKRs was in the technology sector. Today, OKRs are used across different industries and business models. Franchising has some unique elements to it that matter when it comes to business planning.

  • Shared Risk: An advantage of the franchise model is shared risk – since the franchisee signs the lease and commits to various contracts. This shared responsibility matters when thinking of many aspects of the business, from profitability to marketing expenses.
  • Motivation: No one is more motivated than a person who has invested their money into the business. But, when engaging in planning activities, you want to remember that the person standing before you is not an employee, they are a business owner. With that, including some set objectives from a franchisor level of reasonable. At the same time, franchisees who set some of their own Objectives, Key Results or Initiatives will ultimately be more engaged.
  • New Markets: Franchising allows brands to expand to new markets, where customs and tastes are not necessarily understood by the franchisor. So when setting OKRs with your Master Franchise, or franchises in markets that have significant differences from your own, you may want to keep those in mind in terms of what to keep consistent, and what to change.

At the heart of these considerations is to include collaboration when building your plans.  OKRs are also loved for their transparency, which will further accountability and engagement.

Getting Started with OKRs

Setting OKRs together with your Franchise Advisory Committee (FAC) and other key stakeholders from the franchisor level is key. Some choose to have an OKR workshop including collaborative documents if online, and whiteboards if off. At the end of the session, you want to have agreement on what you want achieved by the beginning of the following year.

How to Set Objectives

When sitting down to write objectives, the first question you want to have in mind is “what challenge am I trying to solve?” John Doerr, who famously implemented OKR at Google, and wrote the authoritative book on the subject, Measure What Matters, had the following formula:

I will (Objective) as measured by (this set of Key Results).

Objectives should be aligned, high-impact and time-bound. They don’t necessarily need to be SMART (Specific, Measurable, Actionable, Results-Oriented and Timely). In fact, they can be more of a big picture. If you think of yourself steering a boat, the Objective is the place where you are aiming to go.

How to Set Key Results Aligned with Objectives

Creating key results can be tough to untangle from initiatives. A simple rule of thumb is to think “how can I measure it”. For example, if your objective is to Create an Extraordinary Customer Experience, then your key results could include: Receive a Net Promoter Score (NPS) of 30 for the Year.

Notice that this is not telling you the “how” it is telling you how you will measure it. Similarly, a Marketing objectives may be measured by conversions, but it does not get into specifics around “how”.  Key results should be high impact, specific and within influence.

How to Set Initiatives Aligned with Objectives

Initiatives are in the form of tasks or projects. For the NPS objective above, for example, you can have the tasks that will make your customers happier. Related to that Objective, you could have a new Customer Service training to improve that experience.

An example of a Marketing initiative is a Facebook Campaign. Initiatives are just a “best guess” or a “hypothesis” on what may deliver the highest impact because a veteran marketer knows that a campaign will not always get the results that you are looking for, since ultimately the control lies with the prospect (and tastes can be fickle).  Initiatives should be specific and within control.

Reviews

Franchise-Wide planning for OKRs usually happens annually. On the location-level, frachisors can choose Annual Objectives or Quarterly Objectives. Finding the right rhythm depends on how quickly your target market changes or if your business deals with more uncertainty than most.

If you are new to the process, setting an Annual rhythm can be a good start. Either way, engaging in monthly or quarterly reviews of goals with franchisees is helpful.

Tracking

Having OKRs in a central location is key to the process as is tracking them every step of the way. This way, you can see a history of check-ins, and understand what was discussed in previous meetings. FranchiseBlast’s Business Plan application is a fantastic tool to further this goal. Click here to learn more about Business Plans in FranchiseBlast.



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Franchise Business Planning and Strategy

By | Franchise Business Plans, Thought Leadership
Business Planning and Strategy

We hear the words “strategy” and “planning” together all of the time. But, the truth in many franchise organizations is that the franchise business planning process, on the franchisee level, stands on its own, rather than being part of a larger whole. But having a plan isolated in its own silo will not help the company since business planning is part of a larger ecosystem. You can see elements of that system in the graphic below.

business planning and strategy

Vision

A vision statement is a declaration of where the company wants to go and is intended to be a guide for the company’s decision-making. Vision statements tend not to shift much over the life of the business. They are the “where” of strategic planning. According to the Corporate Finance Institute, Vision Statements should have the following characteristics:

  • Forward-looking
  • Motivating and inspirational
  • Reflective of a company’s culture and core values
  • Aimed at bringing benefits and improvements to the organization in the future
  • Defines a company’s reason for existence and where it is heading

The Vision Statement should then be connected to the objectives set in the franchise business planning process. Objectives will change from quarter to quarter and year to year, but the Vision will be consistent.

Core Values

Core values are the fundamental beliefs of the organization. They are the “why” of strategic planning. Today 80% of Fortune 100 companies publicly display their public values, and many franchisors do the same. They adorn front entrances, HR materials and presentations given to franchise candidates.

If core values are properly defined, it will foster a certain culture across the organization as people with the same values will:

  • Follow the same rules
  • Establish the same norms
  • Develop mutual respect
  • Have similar tolerances

Linking core values to franchise business planning is an excellent tool for motivation, since the hardest part about strategic planning is not necessarily figuring out what to do, it is how to align your franchisees and home office team around it.

Strategic Initiatives

Franchise business planning is clear way to put strategic initiatives into motion. For example, if you are transitioning to do more business off-premise, there could objectives from the following perspectives:

  • Marketing to let local customers know of this option, online and in the community
  • Training to help store staff learn new process around delivery
  • New packaging to help food stay crispy during delivery
  • Tours of facilities via video instead of face-to-face

Planning on the franchisee level helps you be a more consistent organization as you encounter changes.

Collaboration and Relationships

Sitting down on a quarterly or monthly basis, can be one of the most valuable activities that you provide to your franchisees. Creating two-way communication, where you are talking about their goals, especially when some of those are created together is powerful. If you reach the goals, you did it together. If you don’t, you will have some insight together.

Of course, collaboration does not happen unless there is some humility and a genuine desire to connect. But if it is there, it will pay back many times over for the franchisor.

Focused Communication

A problem in many franchise systems is an over-communication from home office. When there is too many e-mails, webinars and trainings, franchisees can become ‘numb’ and stop listening. Setting up a proper business plan reminds franchisors to keep focused on a few important things, and not burden franchisees with more.

Last Word

Before completing this exploration of Franchise Business Planning, there is one more idea. Paradoxically, sometimes processes can get in the way of what you want to do. For example, getting every single marketing piece approved can create a bottleneck, if the Marketing team is not appropriately staffed. Business Planning can also create problems, such as the following:

  • Trying to reach goals, when an unforeseen event has occurred, like a Natural Disaster or a Pandemic.
  • Sticking to old goals when there has been a disruptive innovation in the marketplace, such technology facilitating off-premise.
  • High sales expectations, that go unmet, can lead to overspending on staff or inventory

None of the above is intended as an argument to eliminate planning, they are things to keep in mind as throughout the process. In general, the business plan is part of a unique ecosystem in the franchise model. It sits within that ecosystem and is influences by its shifting nature.



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Why is Franchise Business Planning so Important Today?

By | Franchise Business Plans

“If you fail to plan, you plan to fail.” And, never has that statement been more true. As the global landscape shifts rapidly, franchise leaders need to set a clear path in times of uncertainty. According to Harvard Business Review, “entrepreneurs who write formal plans are 16% more likely to achieve viability than the otherwise identical nonplanning entrepreneurs”. As a franchisor, you want to be sure to lead that planning effort.

Industry veterans know that working hard alone is not going to put your franchisees ahead of the competition. There are many, both on the local level and nationally, who put forward a strong effort. But working on the right things will ensure that your franchisees have the best chance at success. In short, it is about working smart.

Additionally, a flexible process where the Franchise Business Consultant (FBC) and the franchisee co-creates the plan, and checks in at regular intervals, can help you have the discussions that you need to have, and make adjustments when needed. To distill the value down of what a franchisor offers a franchisee, it is a combination of:

  • Brand, as a noun and verb
  • Processes and support of them

If you are not planning, there are a few important questions. What processes are you supporting? Are you supporting ones that will actually foster growth, efficiency, and risk mitigation or is this a rudderless ship? A trip with no direction, could mean that no matter how talented or hard-working people are, they will not achieve results.

In a franchise context, planning can create a sense of unity and collaboration. For the benefit of the brand as a whole, it means that franchisees will make similar changes at once, enhancing consistency. From a collaboration standpoint, there is a flow between the franchisees, who see what is happening in the field, and the franchisor, who has more strategic expertise. This flow can create some exciting collaborative experiences that get results.

As we navigate this time of change together, it is important to put our best foot forward. To create value for the franchisees and help grow your system while keeping the pillars of brand consistency and collaboration strong, providing a plan which is worked on collaborative is one of the best resources that you can provide.



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Franchisee Comeback Plans

By | Franchise Business Plans, Franchise Engagement, Video
Are you preparing to help franchisees make a big comeback once the lockdown ends? We work with over 100 franchise brands and this gives us a unique perspective on what different franchisors are doing to help position their franchisees to thrive as the economy slowly returns to normal. Using these ideas, you can overcome the hardships brought forth by the COVID-19 pandemic.

Comeback Plan Overview

We’ve prepared a generic franchisee comeback plan to serve as a basis for your own efforts.  Let’s go through the plan together to explain the various elements and complement the work you’ve already done. To put some structure around this comeback plan, let’s think of it like a standard business plan a coach would collaboratively define with their franchisees.
To come back from this crisis, there are 4 key objectives that we define here in this comeback plan:
  • You need to be able to weather the storm financially
  • You must pivot to the new operating environment
  • You aim to keep your employees and customers safe
  • You want to bounce back rapidly via sales and marketing initiatives
To do this, we are using the Objectives and Key Results (OKR) methodology. We don’t need to go deep in the terminology to explain our plan, but let’s at least explain these concepts.
  • An OBJECTIVE is your goal and aligns everyone in simple terms
  • KEY RESULTS are how you measure your success; you can’t control this outcome
  • INITIATIVES are activities trying to achieve objectives, which you can control 100%

Objective #1:
Weathering the Storm Financially 

When we are talking about weathering the storm financially – the goal of the franchisee is to stay in business. The pandemic brings a lot of uncertainty, making cashflow management difficult. This will likely be the main conversation topic between the coach and the franchisee. When you look at this, it begs the question “how do you measure if you weathered the storm after the quarter”? The pandemic brings a lot of uncertainty, making cashflow management very difficult. All of the following Key Results are samples only, and the values themselves should be customized for your business.
  1. Maintain 12-months of runway – meaning you have enough cash to pay your rent and employees. If you don’t you need to put something in place today – which will be a loan, gov grant, subsidy, or any other type of relief.
  2. Measure having an EBITDA that is not losing 20% of your sales or more. If you are beyond that ratio, maybe the business should shut down completely and take a financial hit for the rent, but not operating.
  3. Reach a debt-to equity ratio under 0.75. The goal is to make sure that you will have enough cash in the future to pay off the debts that you incur today.

Although we touch on cash flow, profitability and balance sheet with these three indicators, most franchisors are focused exclusively on cashflow in the short term. Profitability and debt service aren’t as much of a focus right now (other than thinking of them while you figure out your cashflow issues), but they will become critical over the next few months.

In terms of initiatives, these are things that you can do concretely:
  1. Develop cashflow model with three scenarios (optimistic, pessimistic, realistic)
  2. Perform weekly cashflow review
  3. Apply for government relief
  4. Negotiate relief with landlord, suppliers and lenders
  5. Negotiate with bank to assist with cash flow by increasing the line of credit
  6. Develop strategy for worst case scenario (equity investment from a new partner, divestment to multi-unit operator or shutdown)
These activities are within your span of influence. You may not have 100% control over whether or not you will get government relief but you know that you can apply. If that initiative fails, then you may need to revisit your plan and see what other initiatives you can do to stabilize your cashflow situation.

Objective #2:
Pivot to the New Operating Environment

The world has changed, so we have to take an honest look at how the world is today, and you are going to have to adapt. Restaurants are letting customers order ahead, or arranging curbside deliveries. Service franchisors are doing remote meetings instead of face-to-face. Some stores are changing their layouts to accommodate new practices such as having a new cooler for meals while they wait to get picked up. No matter what your business, it has to adapt since this is a new world.
Key results associated with this include:
  1. All employees have completed the franchisor’s new training course – checking that everyone is aligned with your new operational processes
  2. Keep labor costs under 33% of sales – the actual ratio will vary based on your cash flow targets, but your staffing plans will likely have changed
  3. Keep COGS under 33% of sales – you may need to change how you operate to reach this goal
Initiatives connected to these Key Results include:
  1. Attend franchisor webinars / watch franchisor videos
  2. Implement franchisor’s new workflows to be aligned with the new environment
  3. Define new work schedules based on cashflow scenarios (reduced hours/staff, etc.)
  4. Define reduced product offering to minimize inventory carry
  5. Update product availability across all online platforms
  6. Consider grocery staples and produce baskets additions to meet supplier minimums
  7. Perform daily sales/inventory reviews and compare to cash flow models to be more efficient on inventory ordering
Although there are some businesses, such as those in pizza, who are not losing a lot of business, most have to adapt to the new situation. Think about what changed in your business and how you can determine if a franchisee is ready for the new world.

Objective #3:
Keep your Employees and Customers Safe 

Third objective is about keeping people safe – that is key. At the highest level, if you don’t do this, you are going to get in trouble. People are posting on social media about businesses that are laggards in this regard. This damages the brands reputation, even if it is just a matter of one or two franchisees. On top of that, there are lawyers driving around looking for employers to sue, since employees do not feel safe. This is a risky environment for business people.
Key results that could help you measure the objective include:
  1. No employees or customers are contaminated at your place of business – hard because maybe they get infected at the grocery store, but nice key result to aim towards
  2. Have all employees perform new COVID-19 training material – specific procedures related to sanitization and such
Initiatives that support keeping everyone safe include:
  1. Install new recommended signage / protective barriers / sanitizing stations
  2. Train staff on new COVID-19 procedures (cleaning, disinfecting, social distancing,  recognizing symptoms, etc.)
  3. Perform check-ins with staff to ensure they feel safe at work
  4. Monitor your franchisor’s communications daily to stay abreast of best practices
  5. Communicate with local health to learn about local regulations which apply
Keeping people safe is challenging for franchisors as they aren’t necessarily able to visit the units during the lockdown. They must influence franchisees who actually execute these best practices to keep people safe. Fortunately, most franchisees are welcoming of these initiatives and see value in their franchisor helping them implement best practices.

Objective #4:
Bounce Back Rapidly Via Sales and Marketing Initiatives

Overall, we are going to go through a recession. As a result, people will be strapped for cash and some businesses are going to be in trouble. It has been proven that doing marketing during a recession or a downturn helps during the recession and after. There are lingering results of consistent and effective sales and marketing. That market share that you can capture will be important. Although businesses want to control variable costs, the cost-cutting should not occur in the marketing area.
That being said, you want to be delicate. You want to make sure that your marketing initiatives are in tune with the demands in the marketplace. You cannot be tone-deaf or too aggressive and you have to operate with tact.
Key results associated with this include:
  1. Achieve 250 marketing campaign conversions – measuring the success of whatever pandemic-aware campaign you are running
  2. Add 250 new customers to our loyalty mailing list – a bigger list you can market to on a continuous basis
  3. Receive 250 new downloads of our app – expanding the list of people you can reach with promotional offers
  4. Increase average transaction size to $20.00. Online transactions are great but they can create a lot of busy work. If you can tack on upsells like grocery staples, it can benefit you.
Initiatives that support the Sales and Marketing objectives include:
  1. Review tone and messaging of the franchisor’s proposed marketing campaigns
  2. Perform one community engagement campaign. There are a bunch of franchises like sponsor a meal for front-line workers, where the franchisee delivers that food but gets paid for by a member of the community – it is a paying it forward. It also helps them achieve the minimums they need to keep to order from certain suppliers
  3. Perform a marketing campaign on social media
  4. Perform a direct mail campaign
  5. Perform a PR campaign; contact 3 local media outlets to pitch them the story.
  6. Perform an email blast campaign to loyalty/app members
  7. Perform weekly marketing ROI analysis and course correct if needed

Operationalizing Your Plan

Overall, the franchise comeback plan is defining the key results, the initiatives and objectives that you will be reviewing on a recurring basis as a franchisee and a coach. Typically we are creating annual and quarterly business plans. Here is what the comeback plan looks like in FranchiseBlast:
franchiseblast comeback plan 1

Here, you can see a summary of the objectives, along with a chart showing whether or not they are on track.

franchisee business plan 2

They Key Results and Initiatives are also seen, aligned with their relevant objective.

franchisee comeback plans 3

On each key result, you have an opportunity to check in, show whether or not you are on track, and put in a note for future reference.

With FranchiseBlast’s Business Plan module you are able to collaboratively define the comeback plan and, more importantly to avoid it sitting on a shelf and going stale, come back to it on a recurring basis.

You can also choose to implement your comeback plan as a self-assessment which would be more in line with a simple checklist. By sending out the self-assessment on a recurring basis, it stays top of mind. The individual questions would be formulated a bit differently (Did you perform your weekly cashflow review? Do you have enough cash for the next 3 months in a pessimistic scenario? etc). This model is a better fit for franchises where franchisee engagement is not currently optimal and/or franchisors who have had to furlough a large portion of their teams. In both of these cases, it is difficult or impossible to setup coaching sessions to review the comeback plan.

Download the Comeback Plan Now!

We are pleased to offer the Franchise Comeback plan in PDF form below, to help you with this effort.



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7 Strategic Franchise Questionnaires

By | Franchise Audits, Franchise Business Plans
strategic franchise questionnaires

Some franchises, when they start, have just one quarterly audit – often driven by legislation such as food safety instead of having multiple franchise questionnaires. But did you know that the average franchisor in FranchiseBlast has six different questionnaires in the system? According to Atul Gawand, author of the book, The Checklist Manifesto, “The volume and complexity of what we know has exceeded our individual ability to deliver its benefits correctly, safely, or reliably.”

In a nutshell, this means that even in fields like aviation and medicine, checklists are needed to pool the collective knowledge. In the world of franchising, this is particularly meaningful because franchise owners are buying into a system because they want to tap into expertise. Let’s take a look at some of the common franchise questionnaires we find in our system, representing over 13,500 franchise locations. To keep it simple, we separated them out into Operations, Training and Marketing.

Operations

Most franchise questionnaires we utilize are within the Operations team. Although the stereotype is of the ops person as a checklist wielding intruder, there are many ways to make operations activities helpful and even collaborative. See some ideas below.

Quarterly or Annual Business Plan

If you fail to plan, you plan to fail. Business planning is a common questionnaire that is fantastic to build collaboratively with the franchisee, and one that you can come back to over and over again throughout the relevant period.

Pro Tip: Don’t make the common mistake of mistaking cash for profits. Profits is an accounting concept, while cash-in and out can make or break the business. See more business planning mistakes here.

Food Safety Audit

Food Safety is often driven by legislation thus is sometimes used standalone. Foodborne illnesses are preventable and safe food practices encourage longer lives, and a more resilient food industry.

Pro Tip: If you get your food safety assessed by a 3rd party such as Steritech or Noraxx, you can add it by integration to your Franchise Operations software. With this, you get the full picture of the franchise and create interesting comparisons such as cleanliness and customer service, for example, to gauge the customer experience as a whole.

Weekly/Monthly Phone Call Business Check-In

This is a simple audit, but helps you stay on top of communication with your franchisee. It simply records the call, and makes sure any follow-ups that you need get tracked in the Franchise Operations system.

Pro Tip: A picture can say a thousand words. Getting the franchisee to send photos for a phone check-in helps you know for sure that the topic of the call was actioned.

quick call audit

Training

Countdown to Opening Checklist

Taking a snapshot at a key time before opening will make sure new franchisees are set up for success. Countdown-to-opening is one of the most common terms in training but making it a clear checklist with follow-up tasks and built-in accountability means you won’t have surprises (negative ones!) on opening day.

Pro-Tip: Some franchisors like to take several “snapshots” such as 12-week, 6-week, 4-week and 2-week.

Trainer Arrival Checklist

Some franchisors choose to have trainers on-site for grand openings. To give customers the best experience possible, there are a lot of details to look after. While the food may be ordered, and the proper smallwares are ordered and sparkling, other details may be missing, such as giftcards at the cash or maybe employees are not able to clock-in yet.

Pro Tip: Seeing aggregate results of common issues found in openings, can help you emphasize certain things in in-class training for later groups. For example, if there is an issue across the board with franchisees not showing their grand-opening promotion in the window, you can emphasize the foot traffic that such a sign would bring.

Marketing

New Marketing Rollout Assessment

While it would be great to believe that as soon as the roll-out e-mail gets sent from the head office legions of franchisees march out and make the campaign happen, but in reality, that is not the case. Assessing a roll-out tells you about both perceived effectiveness of the marketing team from the franchisee side, and the compliance percentage from the franchisor side.

Pro Tip: When assessing a roll-out which requires specific training material on a recipe, for example, snapping a photo can act as a great proof point.

New Product Readiness Audit

When you are rolling out a new program, sometimes you need to assess the readiness of the team. This audit helps you assess where they are vs. where they should be.

Pro Tip: Training is the new marketing in many ways, as customers rely on reviews more and more for their food and entertainment options. Having training and a percentage of crew complete on your audit is a great best practice for a readiness audit.

Last Word

Once you have the right collection in place, you can build a franchise scorecard. Take a look at our Franchise Scorecard eBook here.



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7 Common Franchise Business Plan Mistakes

By | Franchise Business Plans, Franchise Coaching
Franchise Business Plan Mistakes
Making a mistake in franchising is both painful and embarrassing – especially when you really care about your franchisees and their success. So… as a Franchise Business Coach, are you really setting your franchisees up for success with their franchise business plan or are you just going through a “tick-box exercise”? We discussed planning with several franchisors, and we came up with some of the biggest mistakes, and how you can avoid them.

1. Mistaking Cash for Profits 

Franchisors around the world have been focusing on franchisee profitability over the years, but it is good to remember that cash flow is very important in any small business. Profit is an accounting concept and not necessarily money in the bank. You want to make sure that you are tracking both as you are balancing cash-in and cash-out with your franchisee.

2. Ignoring the Bad Year Before 

An experienced franchisee knows the long-term ups and down. If you have owned a business, you also know that it can sap the motivation right out of you and you can start the year feeling like a deflated balloon. A wise franchisor once told me at an IFA Convention: “To help the franchise out, tap into why the bought the franchise in the first place. Were they creating a vacation fund, a life of more abundance or a legacy for themselves? Reharness that energy to help them overcome that challenge and move to the next phase.”

3. Not Sweating the Details

You want to get the details right. In fact, the value of the franchise business plan is to understand details including who is doing what, and when that is going to happen. Business planning is the opposite to throwing caution to the wind, it is a time to sit down and look at the specific key results that will link to each objective or goal, and who is accountable for each. This helps understand workload and balance it out for everyone. Contrary to the popular book, in this case, you DO want to sweat the small stuff!

4. Hitching their Wagon to the Franchisor’s Star

As discussed earlier, franchisees hitching their wagon to the franchisor’s star will not help them in the long run. Franchisees are much more likely to be successful if there is a personal element to their plan, such as saving for another unit or becoming a mentor to others.

5. Overvaluing Experimental Ideas 

While it is exciting to work on a new initiative, such as a National Account or a new SMS Marketing initiative, overvaluing projected results to be at their most optimistic level will not help the franchisee in the long run. Before you know it, when the campaign plays out to a below-par result, the finger-pointing will begin. Be conservative with the projected results of the campaign, and then if they are better at the end of the day, you will be pleasantly surprised.

6. Not Experiencing New Initiatives 

Sometimes a franchisee needs to see to believe in terms of recommended elements in the franchise business plan. Code Ninjas, for example, has franchisees attend two grand openings before they go live themselves, and one after. This not only creates a realistic expectations, but it also helps with the practical side of budgeting to have the event that is right for them.

7. Mistaking Deviation for Adaptation 

Sometimes a franchisee will have a creative initiative in the plan, which can be a good thing. People have to adapt to their market, such as McDonald’s Teriyaki burger in Japan, or serving wine in France. However, sometimes those initiatives will deviate from the Franchise, and create confusion in the market about the brand. When looking at initiatives, you want to understand if it is bringing the brand forward, or setting it backwards.

Last Word 

Planning the right way means tracking progress throughout the year. Check out FranchiseBlast’s Audit and Brand Consistency tools to learn more about tracking progress along the way.


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6 Tips to Keep Franchisees Motivated Throughout the Year

By | Franchise Business Plans, Franchise Engagement
franchisees motivated

Did you start your New Year’s resolution to create a franchise business plan across your system? Guess what – it is half-way through the year.

Question… how are those plans going?

While most franchisors recognize the value of franchise business plans, with competing priorities, they can be hard to stick to.

The good news is, we are not down to the wire. It is not too late. Your franchisees can still achieve their goals – but they have to start now!

So get energized and get focused on these 6 actionable ways for franchisees to stay motivated towards their goals.

1. Leverage Triumphant Franchisee Stories

In the daily grind, sometimes it is hard for franchisees to stay motivated. Hearing stories of fellow operators who pulled through a challenge and succeeded can be a fantastic way to motivate. This can be done through webinars, pictures in one of your regular eBlasts or even through internal social media.

2. Encourage a Healthy Routine

Exercise, nutrition and sleep are fantastic for mental and physical help. Exercise alone has been scientifically proven to create more confidence and a more positive demeanor. Some franchisors have taken this idea and ran with it, creating fitness contests for their franchisees, encouraging them to submit a new healthy habit to be put into a draw, for example. Everyone likes to do business with someone who is healthy and confident, so this will be positive for the system as a whole.

3. Reward Regions on Achieving Milestones

Milestones are so important when it comes to motivation. In franchising, we have the unique opportunity to reward whole regions! This could be with an appealing Marketing initiative from the Adfund that would boost business further, such as money towards exhibiting at a prestigious regional show. It could also mean a visit from the CEO, or a motivating learning opportunity. Rewarding a region will also create harmony there, which helps everyone, including your customers!

4. Encourage Personal Time

With an increasing mountain of workloads and an “always on” culture, sometimes we lose track of our franchisees and what is going on in their lives. We have discussed before on this blog about co-creating plans and keeping the personal in mind. You may want to remind franchises to have a little personal time – whether it is getting out fishing, going to the game on the weekend or practicing yoga, asking about these activities can cement relationships and help prevent franchisee-burnout.

5. Remain Positive

It can sound trite, but it has to be said. Although franchise networks can be an incredible support structure, sometimes they can also get negative. The stakes are high – getting into a negative mindset can hurt even the most successful business. It is important to listen and respond to challenges, but you also want to balance that with a bright view of the future and a clear vision of where the franchisee can go. Introducing franchisees to a group of positive friends can make a world of difference, if they are open to it.

6. Set Reminders

Part of staying motivated is having reminders on what to do. We spend so much time distracted by reminders, having ones that keep the franchisees focused on the business can “break through the clutter”. You can do this with software, with FranchiseBlast’s automatic reminder system, for example.

Last Word

Ready to learn more about franchise business planning? Check out our collection of articles here.



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