Category

Franchise Coaching

How Franchisors are Managing Franchisee Fraud

By | Franchise Coaching, Franchise Fraud

Before getting into franchising, you may have had an image of what would happen if you were to catch someone committing fraud within your business. Picture a Law & Order episode, where the person committing fraud is on the stand, peppered with questions until they confess in a dramatic fashion.

But, after spending some time in franchising, you likely have realized that this is not how things go – because relationships are everything. After our popular articles on 4 ways franchisees commit fraud and how to detect fraudulent acts, we decided to add some insights on how franchisors are handling fraud once it is found.

A Family Dispute

Most franchise systems operate as families. The annual convention can feel like a family reunion. Longstanding friendships are formed beyond business, and there can be relationships, and even marriages between franchisees. As a result, franchisors and franchisees know each other’s strengths and weaknesses. They also know how to push each other’s buttons.

A fraud can then seem like a family dispute. And, far from being a “bad guy” franchisees who are committing fraud can simply be in a difficult financial situation based on a spouse’s job loss or unexpected medical bills, for example. On top of this, franchisees, especially those that commit fraud, can be highly leveraged.

A View from the Outside

Customers often have a fuzzy understanding of the relationship between franchisor and franchisee. After all, they may simply enjoy your food, and don’t need to understand the inner workings of your business. As a result, a loud and public dispute could have a negative impact on the local business, and others in the region or nation, not to mention the brand as a whole – potentially creating a self-inflicted wound. Suppliers can also get a negative perception of an internal dispute.

The Risk of Not Acting

As a result of the “family” issue, and the customer issue, sometimes fraud when discovered, goes unmentioned. In fact, a known fraud can justify poor treatment of a franchisee, or other franchisees can take notice, creating an erosion of respect and even loyalty.

Mediation

Often, the best resolution is to work together. According to law firm Nixon Peabody,

“In most instances, brand value can be preserved by quickly channeling a dispute through mediation – with all the major constituents present at the table. This type of intervention often leads to results-oriented solutions without suppliers or customers ever becoming aware of the dispute. A successful mediation can result in a successful business transaction, such as the sale of the franchisee’s locations, that can further bolster the brand’s strength. The earlier the third party is brought in to expedite the negotiated business resolution, the better it will be for the brand and the bottom lines for all concerned. “

Information is Power

While managing this situation, having a paper trail through a series of audits and corrective actions, for example, can strengthen the process. Additionally, having a record of good faith, such as a franchise coach taking an active role in helping the franchisee, can make a big difference. FranchiseBlast’s Brand Consistency software can help create that digital record.



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Is your Franchisee Audit Too Generous?

By | Field Audits, Franchise Coaching

Over the years, we have seen hundreds of franchise field audit questionnaires. They come in all shapes and sizes and cover many different aspects – in fact we wrote a field audit benchmarks article comprising of just this.

A number of systems have approached us and asked us for ways to improve their audit questionnaire, which they thought was too generous. More specifically, they were seeing all of their franchisees receive 90%+ scores when in fact they sensed that the system average should be more around a 70% or 80%. In fact, the average across all franchise systems we work with is 80% of audits pass and 20% fail.

John Doerr, author of bestseller Measure What Matters famously said “if you always hit 100% of your goals, you are not shooting high enough.” Conversely, if you’re hitting too few of them, you get demotivated. If it is at around 80%, and the goals are meaningful, people will sit up and take notice of those initiatives, and the people in charge of them.

Franchisors have told us that the problem with such high scores is that franchisees who receive them tend to ignore the recommendations that are made because they’re already doing exceptionally well.  This article lists out a collection of strategies you can employ to balance out your audit scoring.

Ineffective Strategy: Changing Question Weights

The natural first first reflex is to change the number of points allocated to each question. A critical question will be given more weight than a low impact one. At it’s base, this is a sound strategy when used appropriately.

Imagine you had a questionnaire with 100 questions, worth one point each. If a franchisee fails a critical question due to having rats taking over the kitchen, then they still end up having 99%. Sure, maybe the whole audit fails due to severity rules around such critical questions but when seeing that score, they’ll think they still did very well, and will be popping the champagne bottles, when in reality, the brand would be in grave danger. 

When faced with this, the reflex is to increase the point value of this question. Let’s say we make it 10 points. The questionnaire total is now 109, having moved that question from 1 to 10 points. Fail that question and you get 99 out of 109, or just under 91%. That’s a big jump and you’re making progress on being less generous.

The problem with this strategy is you can’t do it too often. If you do, then you end up with a similar problem because the critical questions rarely fail. As an example, imagine that you want the top ten questions to be worth ten points, and you leave the other 90 questions at their standard one-point value. Your total point value is now 190. Fail one critical and you’re back to almost 95%. In other words, you just halved your gains in the context of improving the questionnaire to be less generous.

Additionally, because your critical questions rarely fail, you’ve made things worse for the other regular questions. Fail a regular question and now you have 99.5% instead of 99%.  As you can see, this drives average audit scores up and reduces failure rates.

Don’t misinterpret the comments above as saying you should never change question weights. We believe questions should be weighted based on their importance. The lesson we are communicating here is that it isn’t typically the solution to this particular problem.

Strategy #1: Calibrate Your Coaches

Before making any changes to your questionnaire, you need to make sure that your coaches are evaluating the questions properly according to the same guidelines. This may imply having a meeting with the whole team and defining much more specific documentation about each question to quantify the criteria for a passing value. 

If you balance this with real data, you can ask people if they think that it’s normal that a certain question is passing 95% of the time. Perhaps the team will discover that certain standards were simply too easy to attain, and the bar can be moved up.  

A simple conversation with the team to be stricter may be a very easy way to get started on this problem.

Strategy #2: Add Questions that Will Fail Often

Sometimes auditors will sense that the questionnaire is dated and overlooks certain areas that would normally be failing often. In Strategy #1, you defined stricter standards; now you are expressing those standards as new questions instead of different evaluation criteria. This is a good start, though it’s not as effective as the next idea.

Strategy #3: Prune Questions

Another data-driven initiative revolves around pruning questions that never fail from your audit. If you run a report and see that a certain question has rarely failed across hundreds of audits, perhaps it’s time to consider retiring this question completely. Not only does this reduce the point total but it makes the coach’s visit faster. We are naturally driven to add more to a questionnaire, but it is good practice to review what you can remove once per year so the whole process becomes both manageable and meaningful.

This is usually easier said than done as it is very difficult to remove completely valid questions from a questionnaire. After all, questions in an audit come to symbolize the priorities of the organization such as quality and customer satisfaction.  

Strategy #4: Create Specific Questionnaires for Areas of Concern

Most franchise systems have two main questionnaires, one for a thorough annual review and a shorter one for more frequent visits. However, we’ve seen the average franchise has 6 questionnaires in our platform and that is because they have started utilizing the tool in various other use cases from store openings to limited time offer validation for the Marketing team.

In the context of our discussion, imagine a franchise has a lengthy questionnaire featuring 400 questions on quality, service, cleanliness, marketing, food safety and franchise coaching. Now imagine it has identified a large weakness or risk around food safety and their annual field audits are not helping drive the scores up, even if there are 100 questions on this specific matter in the audit questionnaire.

One initiative could be to create a new questionnaire, focused exclusively on food safety. This signals the message that food safety is so important that you’re doing audits exclusively on this matter. Additionally, because this was your main weakness, it usually implies scores will be lower. They aren’t brought back up by passing questions in other sections.

Strategy #5: Implement Penalty Scoring

There is probably no better technique to reduce scores quickly than making use of penalty scoring. It unfortunately comes with the trade-off of being more confusing to explain to the franchisees, especially when they are accustomed to receiving high scores.

The way penalty scoring works is as follows: Imagine you have a questionnaire or a section that has 100 questions worth 1 point each. Instead of subtracting failures from the maximum total of points (100), remove them from an arbitrary other number, such as 50.  If you fail one question worth one point, you get 98% (49/50). You’ve just made your questionnaire 2x stricter. If you fail 10, you get 80% instead of 90%.

If you chose to deduct points from 25 instead, you’ve doubled it again. If you fail 20 questions worth one point, you lose 20 points out of 25, leaving you with 5/25 or 20%. Compare this to the original situation where failing 20 questions would leave you with 80%. If you are going to roll out such a drastic change, it must be accompanied with change management and buy in from the franchisees.

Most Important Lesson: Get your Franchisee Advisory Council (FAC) Involved

When making changes to the questionnaire like this, it’s important to get the FAC involved. They need to understand there’s a problem with the status quo and that problem can negatively impact their bottom line if it’s not addressed. If people are ignoring food safety because the audit scores are too high, they risk getting people sick and that will damage the brand.  Involve them in the questionnaire design process and do a few test runs with them to ensure you have their buy-in.



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CFA: 5 Ways to Boost Your Franchise Field Audit

By | Events, Franchise Coaching

Date: January 30, 2019
Time: 12:00-1:00 EST
Price: Free
Register: CFA Website

Traditional field audits and performance reviews can be outdated, onerous and ineffective, leaving the franchisees and franchisors frustrated with little in the way of improvement. Yet, when done the right way, these evaluations are optimal for franchisees’ development and can help highlight needed improvements to your business.

Learning takeaways:

  • How to make visits more efficient and maximize the time allotted to coaches
  • How to automate mundane parts of the performance review and increase productivity
  • How to expand franchisee coaching outside of the visit via self-improvement processes

Tips on Building an Effective Quarterly Franchise Business Plan

By | Franchise Business Plans, Franchise Coaching

A good proportion of franchisors utilizing our franchisee field audit app also use FranchiseBlast for business planning purposes. We’ve had a few franchisors reach out and ask us what we thought was the best format for a business plan and, as such, created this guide!

To give you a bit of context, we’re not talking about the proforma business plan a franchisee would create to secure bank funding to open up their location. We’re talking about ongoing action plans or business plans defined by the franchisor’s franchise business coach during their field visits or phone coaching sessions. These are typically quarterly business plans in the context of a franchisor-franchisee relationship but their duration can vary greatly. One could create an annual business plan with their goals for the year and decompose this plan into quarterly business plans and then to very specific as monthly or even weekly action plans.

Before we explain what quarterly business plans typically looking like, let’s revisit the concept of SMART goals.

SMART Goals

Everyone has a slightly different definition of what the acronym SMART means in the context of a goal. Here are a few different interpretations from a project management site. You’ve most likely been introduced to this concept on a few occasions.

  • S: specific, significant, stretching
  • M: measurable, meaningful, motivational
  • A: agreed upon, attainable, achievable, acceptable, action-oriented
  • R: realistic, relevant, reasonable, rewarding, results-oriented
  • T: time-based, time-bound, timely, tangible, traceable

At FranchiseBlast, we favor the following interpretation and have included examples for each.

Specific: Be clear about what you want achieve do to improve your business.

Example: We want to increase off premise business or online ordering.

Measurable: You’ll need to be able to quantify progress or success. How do you define your goal in a way that is easy to calculate?

Example: Online orders should compose at least 10% of our total orders. (The key performance metric of “# of online transactions” / “# of total transactions” should exceed 10%).

Actionable: If you have this goal, you must be able to do something concrete to achieve it. This ties into it being attainable.

Example: It’s actionable because we can train staff to mention the program during every transaction or phone order. It’s attainable because we know over half of the units in our territory have achieved this goal.

Relevant: This helps you realize if you’re working towards the most impactful elements of your business, not just busywork that does not add to the bottom line.

Example: Our strategic initiatives this year have us working towards a 5% same store sales increase and we have a number of marketing initiatives in place to support this, including the launch in January of our online ordering program. It’s new in our location and we know it helps improve sales and kitchen efficiency.

Time-Based: Giving yourself a deadline to accomplish the goal makes sure something gets done.

Example: We want to achieve 10% of online orders by October 31st.

Overall, a SMART goal is something specific that is well-aligned with strategy, can be measured over the course of a time period and, at the target date, it can be determined if our action plan succeeded or failed.

Corrective Action Plans are not Franchise Business Plans

Users of our franchisee field audit app will know that the app lets you create a corrective action plan for any anomalies highlighted during a field visit. For any question within the field audit questionnaire, you can define a task that must be completed by a certain person by a certain date. While effective for course corrections such as the need to replace a chair they aren’t necessarily a great fit for business plans where you want to be more strategic.

A strong business plan elevates the discussion to key drivers in the business.

A Simple Action Plan

Now that we’ve established the context, let’s talk about what action plans can look like in the real world. The simplest pattern you can use when defining a business plan is to have two simple free form text questions:

  1. “What area of opportunity did you observe?”
  2. “Which activities are recommended to address this area of opportunity?”

This form is extremely simple but a great addition to any standard field audit questionnaire performed by the franchisor. Be sure to balance out areas of opportunity with congratulations for this unit’s strengths.

Although simplicity is key, there are better ways to help your franchisees think strategically. This is a good first step from moving from a cop to a coach relationship with your franchisee, but the value provided to the franchisee is highly dependent on the coach and their unique point of view on the business.

The SMART plan

If we’re willing to put a bit more work and become more strategic with our quarterly business plans, the next level up is the SMART plan, referencing the goals-setting strategy mentioned above.

This questionnaire will include the following elements:

What is your SMART goal?

You would write out a goal that matches SMART criteria above.

Example: Increase the % of online orders to 10% by October 31st.

Is there more information relevant to your goal?

When applicable, complement this with additional information about why it’s relevant or what the current standard is within the franchise. This goes deeper into the area of opportunity.

Example: Increase the % of online orders to 10% by October 31st. As you know, the franchise’s move to digital is a critical strategic objective & differentiator. The network average is already 20% and we’ve seen stores go from 0% to 10% in 2 months after properly marketing the initiative.

What activities/tactics will you perform to achieve this goal?

Example: Add post on restaurant Instagram channel with the hashtag #instagood 

What is the due date for the goal and each of the activities?

Due date to achieve target: Oct 31.
Due date for first Instagram post on online ordering: Sept 1. 

Who is accountable for the goal and each of the activities?

Target: GM of Restaurant 
Instagram: Supervisor 

When applicable, what is the budget for this initiative?

Target: $1,000 
Instagram: No budget 

Recommended Patterns

At FranchiseBlast, we see a number of different layouts for the above.  Here are some patterns to give you some ideas:

Pattern 1

  • Goal
  • Activities
  • Due Date
  • Done By

Pattern 2

  • What is your SMARTgoal?
  • How will you measure success?
  • Why is this an attainable goal?
  • Why is this goal relevant?
  • What’s your due date?
  • What activities will you do?
  • Who will be accountable for this?

Pattern 3

  • What is the area of opportunity, compared to our standards?
  • What is the SMART goal and related activity?
  • Activity 1
    • What is the activity?
    • By whom?
    • Due date?
    • Budget?
  • Activity 2
    • What is the activity?
    • By whom?
    • Due date?
    • Budget?
  • Activity 3
    • What is the activity?
    • By whom?
    • Due date?
    • Budget?

Overall, these are pretty much the same pattern of having a SMART goal.

Pattern 1 is the simplest approach.

Pattern 2 breaks down the goal to ensure they’re following a SMART philosophy.

Pattern 3 breaks down each individual activity so that it can easily be delegated to different individuals. We’ll often observe that Pattern 3 is interesting when you have a longer-term plan (say quarterly), and the activities break down that plan into more granular pieces (Month 1, 2,3).

Quarterly Business Plans in FranchiseBlast

Overall, the breakdowns that we have already presented in this article focus on a single goal at a time. Let’s bring the sophistication level up and move from Action Plans to Franchise Business Plans and talk about the broader process, not just the questionnaire.

Step 1: Review Data & Find Actionable Insights

The first step in the process is to acquire and analyze the data you have about this unit and discover where their weaknesses lie, which are the most impactful and how those align with the franchise’s strategic objectives. Tools like our Franchisee Scorecards simplify this process greatly helping the coach evaluate the business from a holistic perspective from a single dashboard view to decide if they should drill down on financials, customer satisfaction, food safety risks, etc.

You could execute flawlessly on your business plan, but if you haven’t properly analyzed the situation and determined the appropriate root causes of any issues, the intervention will not be as impactful.

To help determine root causes of staff behavior, some people go through a workflow such as:

What’s the problem?

Describe the problem in as much detail as necessary.

Is it important?

If not, ignore.

Is it a skill deficiency?

If the problem is based on skill, arrange different forms of training based on if training has occurred before and how often the task is performed.

If skill is not the challenge, is it a knowledge deficiency?

If so, they’ll provide different forms of information/feedback.

If not, then they’ll drill down to the root cause which could be removing obstacles or adding incentives/consequences.

Step 2: Define the Business Plan (Goals & Activities)

Now, pick a limited subset of areas of opportunity to focus on in the next quarter. If you try to focus on too many things at once, you’ll fail at all of them. For each area of opportunity, you’ll define an action plan for a single goal as defined previously in this article. There are a few different patterns to accomplish this but here we outline the main two.

Pattern 1: Pick Three

Some franchises will say: “pick three areas of opportunity and focus one those”. This forces you to make hard choices about what’s the most important for this unit’s future. Although we say “three” in this example, we have seen anything between one and six. If it starts getting larger than that, we start considering it an “anti-pattern”: that’s just too much to focus on. Personally, we believe that 3 is a good number.

The standard way most franchises do it is to have free form options where the coach enumerates the top three options he or she believes to be the most impactful. However, some franchises resort to using the concept of a checklist.  This checklist is a common list of ‘buckets’ under which areas of opportunity fall under. The coach and the franchisee talk about each bucket and jot down some quick notes and collaboratively define which ones they should be focusing on. See the checklist as just a guideline for the conversation.  For example, pick three out of the following list:

Team
  • Training
  • Staffing
  • Turnover/Tenure
  • Development
  • Bench Strength
  • Diversity
 Sales
  • Service Scores
  • Marketing/Events
  • Customer Traffic
  • Comp Sales
  • Salesmanship
  • Incentives
  • Contests
Product
  • Food Safety
  • Food Quality
  • Waste
  • Line Checks
  • /Receiving
  • Compliance
  • Best Practices
Profit
  • Food Costs
  • Labor Costs
  • Overtime
  • Misc Cost of Goods
  • Supplies
Facility
  • Cleanliness
  • Repair & Maintenance (R&M)
  • Inspections

You’ll notice that many of the items on this checklist are frequently found in field audit scores or franchisee scorecards. A few, however, require deeper conversations with the franchisees about their personnel and long-term vision.  We find this concept of a checklist interesting as it forces the stakeholders to, at least briefly, consider various elements that they may have forgotten about while in the heat of the conversation.

Pattern 2: Pick One or Two for Each Dimension

In a second case, some franchises choose to say that their business can be viewed in four different dimensions. For example, they could define themselves in the following way:

  1. People
  2. Product
  3. Service
  4. Marketing.

In the above example, it would be:

  1. Team
  2. Sales
  3. Product
  4. Profit
  5. Facility

The dimensions vary depending on the brand, but overall for each dimension the coach will choose one or two areas of opportunity Some will impose that there’s a maximum total of goals defined for all dimensions combined (say 1 or 2 per dimension, with maximum of 5 initiatives in all). This practice forces you to think a bit more about the business from a holistic view instead of always looking at attacking “improve sales” directly, but you have to be careful not to overwhelm the franchisee.

We find this an interesting approach as long as you keep the list to a minimum and identify what the real top three are.  It’s good to look at all facets of the business. Some franchisors address this in a different way by having some monthly calls with the franchisees where the ‘topic of the month’ is discussed. Each month, that topic varies from “Employees”, to “Marketing”, to “Food Safety”, etc. This is a nice complement to the more formal quarterly business plan.

Step 3: Continuous Review

During the quarter, it’s important to periodically review the plan and see if we’re performing the planned activities and if our goals are on their way to being met or if we need to course correct. This can be done over the phone, but it brings value to the fact that the business plan is a living document.

Step 4: Postmortem & New Plan

Once the quarter is done, it’s critical to review how you did against the plan. We won’t necessarily reach all our goals, but it’s great to learn from the activities we performed or didn’t perform. These lessons learned will help us guide the next quarterly business plan.

Final Example

If you don’t have a business plan template today, we’d recommend doing something as follows which we find simple enough to be easy to use yet extensive enough to be less dependent on the domain knowledge of each coach and easier to systematize.

Highlight of Successes

Area of Opportunity 1

  • Why it’s an area of opportunity and why it’s important (how it relates to sales or strategy, the franchise’s standards, your benchmark vs group, etc.).
  • SMART Goal around a measurable metric with a Due Date
  • List of activities with who’s accountable and due dates. (Breakdown into more granularity when appropriate.)

Area of Opportunity 2

  • Why it’s an area of opportunity and why it’s important (how it relates to sales or strategy, the franchise’s standards, your benchmark vs group, etc.).
  • SMART Goal around a measurable metric with a Due Date
  • List of activities with who’s accountable and due dates. (Breakdown into more granularity when appropriate.)

Area of Opportunity 3

  • Why it’s an area of opportunity and why it’s important (how it relates to sales or strategy, the franchise’s standards, your benchmark vs group, etc.).
  • SMART Goal around a measurable metric with a Due Date
  • List of activities with who’s accountable and due dates. (Breakdown into more granularity when appropriate.)

Postmortem (filled out at the end of the term)

When choosing your areas of opportunity, have a reference list of standard areas (as per the above breakdown in Team, Sales, Product, etc.) nearby to guide conversations and have your franchisee scorecard handy. If you don’t have a franchisee scorecard yet, take a look at our Ultimate Guide to Franchisee Scorecards.

Conclusion

A franchisee business plan provides another “arrow in your quiver” when it comes to driving franchisee performance. Integrating some concepts from the world of Project Management and ideas from leaders in the franchising community, can help set you on a path for success.



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Franchise Marketing Coach Dos and Donts

By | Franchise Coaching, Marketing

dos and donts franchise marketing coachMarketing coaching can be one of the hardest parts of franchising.

Why?

Getting leads, and customers in the door, is truly a matter of life and death for franchisees.

And while there are some things in Marketing that ARE black and white, there are others that are more shades of grey than anything else.

So – lets delve into the world of Franchise Marketing for coaches – we will look at what is black and white, and what is in that messy grey space in between.

Dos

Understand Differences

One of the difficult truths in Franchise Marketing is that… things that work in some communities do not work in others.

It’s frustrating, but true.

Ask any pro marketer, who has accounts running across different areas.

While something like food safety rules is universal  – Pay Per Click spend is higher in larger centers where there is more competition. In other areas, people rely strictly on word-of-mouth. In still others, trust of strangers is very low, so events are not as strong.

What makes it extra-tough, is that sometimes franchisees will say something that stretches them outside of their safety zones does not work.

So – you actually do want to dig deep and understand the differences.

AND – you want to have a Marketing Plan that embraces these differences by having one that diversifys the franchisees options.

Focus on Numbers

There are not many people that got into franchising because they LOVE numbers, or at least I have never met one.

Most franchisors are now embracing SMART goals when it comes to Marketing. It is a great start.

But, focusing on numbers does only come in the planning phase, it is measuring results.

We have seen this as one of the top Marketing failures in our clients. Measuring what works, and what does not, is a great indicator to send back to the Marketing team. Remember, Marketing is changing quickly, and there is no way to react if the activity is not being measured.

Embrace Community

While connecting to the community is something we often teach in training, it is one of the first things that fall to the side when things get busy.

A business, any business, is about relationships. And – that competitive advantage can be achieved by being yourself out in the community. The brand of “you” is more powerful than any bid on an online ad.

So – it is great to have a “connect with the community” side of your audits when it comes to Marketing. These humble activities can make a big difference.

Donts

 

Take Things at Face Value

The book Getting to Yes discusses the idea of having a “Position” and then an “Interest”. According to a Harvard blog on this subject:

We tend to begin our negotiation by stating our positions. A homeowner might say to a developer, for instance, “I won’t allow you to develop this property.” When we stake out firm positions, we set ourselves up for impasse. In our goal of getting to yes, we need to draw out the interests underlying our counterpart’s positions by asking questions, such as, “Why is this property important to you?” By identifying what interests are motivating the other party, and sharing your own interests, you can open up opportunities to explore tradeoffs across issues and increase your odds of getting to yes.

In a nutshell, the franchisees may come to you with a problem – which is a position. For example, a problem of not enough leads could mean a few things:

  • Not closing enough leads.
  • Qualifying too aggressively, leaving good leads on the table.
  • Not enough referrals and upsells from current clients.

As a coach, you are not denying the reality of the problem, but you are digging deeper into the true source, rather than just solving the “Position”.

Ignore Creativity

When you are on-site with a franchisee, with your checklist, it is easy to get into the mindset of “different is bad”.

And, we do all have brand standards for a reason.

But, the best leaders will put the majority of their focus on the here and now, they do also look at what is next. Listening and learning about a new idea or innovation may not be something you can do today, but it could be rolled into plans for the future.

There is a sweet spot there.

It is not chaotically moving from idea to idea, anhialating the brand.

It is listening and looping in the ideas.

Conclusion

Like everything in Franchising, Marketing Coaching is a balancing act. Getting the balance right can make a transformative difference to your franchisees. The Marketing world comprises black, white, the grey in between along with all of the other colors.



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3 Franchise Coach Superheroes… and How to Overcome their Related Weaknesses

By | Franchise Coaching

Franchise coach superheroes cannot fly without an airplane (and some can be found there very often), and they won’t be found wearing capes or spandex (other than on Halloween). But every franchise coach needs to have superpowers to help their franchisees and to drive performance. Here are 3 Franchise Coach Superpowers and how you can overcome their related weaknesses.

1. Captain Intuition

This coach is very intuitive, and has a natural sense about what the franchisees need. Almost always coming from a sales or service background, he has a high EQ, and is typically very popular among franchisees.

Related Weakness: Captain Intuition may be so good spontaneously or “on the spot”, that he may lack discipline in the planning department. Providing this coach with planning tools with intuitive workflows is a must.

2. Cat-Tastrophe

This super-hero is the lady to go to when a franchisee is in trouble. She is always cool under pressure, and knows exactly what to say to have her franchisees go from chaos to confidence. Highly resourceful, this coach uses all tools at her disposal to get franchisees where they need to go , whether it be head office resources… and beyond.

Related Weakness: The “dark side” of resourcefulness is a coach who may struggle to follow procedures. Arming her with powerful audit tools can ensure she stays consistent with the brand.

3. Doctor Do-Right

This coach is the “go to” person when it comes to procedure and important details on legislative concerns such as food safety or compliance with other state or provincial standards. His secret weapon is his electronic checklist, and he has a sharp eye for detail – solving problems before they start.

Related Weakness: Rule-following, when taken to its extreme becomes rigidity. This coach may be challenged to “think outside the box”. Getting this coach inspired by best practices of others, or better yet, baking them into project management tools can be a great way to help.

The Coach Dream Team

Do you recognize any of these heroes? The good news about working as a team, is that everyone can balance out each others strengths, and related weaknesses.



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4 Ways to Use Technology to Manage Wage Increases

By | Franchise Coaching

Franchisees Managing Wage IncreasesMinimum wage is going up across many regions across North America and around the world. While many businesses plan to simply pass those increased costs to the customers, according to polls, others are looking to get more efficient. While reducing the labor force can be an incredibly painful decision for any entrepreneur, we have thought of an alternative. Technology can be a way to increase efficiency with the labor that your franchisees already have while maintaining their profitability if implemented effectively.

1. Optimize Shifts

Use technology to spread the shifts effectively, ensuring that your franchisees are not overstaffed or understaffed at any given time. There are tools available that analyze millions of possible schedule scenarios before selecting the right one.  Instead of being a complicated task for a local manager, they have one less thing to do. Doing this at the head office level is also a great benefit for franchisees in terms of their investment in the brand.

2. Support Getting Back In the Business

For some franchisees, the wage increase means that the owner has to get more hands-on in the business themselves to keep their profit margins steady. This could be uncomfortable for those who have built a staffed business specifically because they want to have more time for things outside of work that they care about. If a franchisee has not been behind a counter or taken customer calls for a few years, this can be a big change. But, the difference is that the world has changed as well while they were away and it may give them a chance to get creative about their business.

To support them in this endeavor, you can automate some of the franchisee paperwork such as digitizing P&L collection, creating automatic polls or simplifying other processes. Also – as people are preferring asynchronous communication with shifting schedules, having “watch anytime” training or company updates is better than a live webinar.

3. Take Advantage of the Self-Serve and Mobile Revolution

Mobile has changed the way that people shop, eat and connect. For some concepts, customers may prefer to order themselves, as McDonalds has discovered or others may like a self-check-out option at the end of the meal, reducing one task for servers. As posted elsewhere, off-premise is one of the areas that is growing for restaurant, and on-demand apps such as UberEATS, DoorDash and are a big hit with the younger set. Offering your franchisees opportunities to reduce their costs using some of these self-serve options. Interestingly, many of these can happen from the customer’s own device.

4. Implement Benchmarks and Scorecards

Franchisees sometimes get the mentality attached to certain processes, or a “herd mentality” can take place, even if it is not based on evidence. One very promising trend we have seen is the greater prevalence of Unit Level Economics or EBITDA Departments. These teams look closely at the units, and what truly predicts a profitable business.  Creating benchmarks based on what is working, and what is not and regularly scoring your franchisees is a fantastic way to track progress, and provide value to your network.

Are You Ready?

Are you ready to start managing minimum wage increases proactively rather than reactively? Contact us to learn about how our scorecards are helping forward-thinking franchise systems around the world.



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Top 5 Complaints Store Managers Have about their Leaders and How to Avoid Them

By | Field Audits, Franchise Coaching

top 5 complaints franchise store managers haveComplaints… in franchising we hear a lot of them.

Some of us tune them out to survive.

But, in complaints, we can find a nugget of wisdom.

Bill Gates said: “Your most unhappy customers are your greatest source of learning.”

As franchisors, we have many customers – including franchisees and managers. In a franchising community so broad, it is shocking that many store managers and franchisees can have the same complaint. According to multi-unit management expert, Jim Sullivan, in his book Multi Unit Leadership, the following complaints are consistent.

The top 5 complaints that store managers had about their Multi-Unit Leaders:

  1. Not enough face-time.
  2. Store visits where MULs worked positions rather than offering specific direction, insight, coaching and feedback.
  3. Pre-occupation and distraction on the MUL’s part during store visits via constant phone, text and e-mail interruptions.
  4. Too much “telling what to do” not enough “why that problem occurred.”
  5. Changing priorities or failing to clarify objectives.

Does this sound familiar? Whether you are a business coach or a multi-unit leader, it likely rings true. Sullivan continues with this insight:

Too much of what passes for multi-unit-leadership training and development today was developed decades ago when the industry, customer, crew, technology were radically different. The leap from “telling what to do” to “telling why and how to do” is a skill that takes patient coaching guided practice and innate skill.

So – here are some tips at managing from a place of “why” instead of managing from a two-dimensional checklist perspective.

Purpose

In Simon Sinek’s book, Start with Why, he contends that leaders who help teams understand the “why” behind what they are doing are more successful than those who do not. Sinek explores the leadership of legends such as Steve Jobs and Martin Luther King.

Bringing this concept down to the earth, helping franchisees and store managers see how their “piece of the puzzle” fits in with the rest if it can go a long way. People want to understand the purpose first – and if they fully understand that, the actions follow more naturally from a place of motivation.

Find the Gaps

There are many coaching models that have a step around “finding gaps” such as the CIGAR Model.

  • C – Current Reality
  • I – Ideal
  • G – Gap
  • A – Actions
  • R – Review and Reinforce

Getting the franchisee or store manager to discover the gap between the current reality and the ideal can be incredibly helpful in terms of making the conversation about their goals, and not yours. Over time, you will discover a lot of similarities in goals, and a natural alignment.

Talk Tentatively

The book Crucial Conversations talks about the need to “Talk Tentatively” in the “STATE” Model.

  • S – Share Your Facts
  • T – Tell Your Story
  • A – Ask for Other’s Path
  • T – Talk Tentatively
  • E – Encourage Testing

When you are in a difficult conversation, it is a good idea to ask questions, and “test” certain concepts rather than making authoritative statements. Although you may still need to bring messages from head office, this being done in a gentler, tentative way can be extremely helpful.

Technology

When it comes to distraction, technology can be your best friend or your worst enemy. Technology, specifically built for franchise business consultants or multi-unit manager in mind can help you focus less on the process of auditing and more on the audit itself.

  • Automatically create “action plans” for stores if you see an opportunity for improvement. For example, if the store is choosing to do a seasonal event, you can give them a step-by-step process.
  • If you see patterns in violations, you can create a training module – one initiative that “lifts all boats”.
  • Get the franchisee to send you pictures before-hand of things like wrapped vehicles so you can focus on more face-time.

All of these features, and many more, are included in FranchiseBlast’s Field Audit app.



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How Driverseat Advances Franchisee Profitability and Fosters Trust

By | Battle Tested Strategies, Franchise Coaching

The Driverseat franchise is cruising to lead emerging brands offering chauffeur, assisted transport and designated driver services. Founded by brothers Brian and Luke Bazely, in Waterloo, Ontario the franchise currently has 24 units in Canada, with several more poised to open in the next 12 months.

Driverseat, which has been in business for six years, and has been franchising for only five, charges a flat-rate for royalties. This system creates an environment of trust and openness with the franchisees. Learn about how CEO, Brian Bazely, uses this approach combined with authentic coaching to set franchisees up for success.    

What is your role?

Brian: “I’m the Co-Founder and CEO of Driverseat and my brother, Luke is in the role of Co-Founder and President. I focus on Franchise Development, and growing the businesses of the Driverseat franchise owners. Luke focuses on our corporate location, as well as developing the technology.”

Brian Bazely from DriverseatWhat did you do before-hand?

Brian: “I spent a significant portion of my career in executive management roles with retail companies such as Toys R Us and The Beer Store, a province-wide beer retailer in Ontario. About ten years ago, I became a franchisee of Anytime Fitness. Through that process, I fell in love with the whole franchising concept.”

What do you like about working at Driverseat and how has the company developed over time?  

Brian: “Every day feels like we’re either as passionate or more passionate about the business. The excitement surrounding Driverseat is quite something. My focus is far more centered on the franchise owners; my experience tells me that this strategy is the best way to create a great experience for our customers. I know that when I truly care for my franchise owners that they’re going to have their coachmen, which is our term for drivers, provide amazing service for the customers.

Our franchise system and the supporting technology provides a great deal of flexibility.  I find it very rewarding when we have a new franchisee who joins our organization and as is able to travel more, experience life more, or as an example, is able to coach their daughter’s soccer team because of the freedom that the business provides for them. That’s the part that gets me super-excited every day. My passion is for them and for what they can experience in being part of the Driverseat brand.”

Driverseat Annual ConferenceWhat is different about how you collect royalties compared to other franchise systems?

Brian: “When we designed the business, we decided to charge a flat-rate royalty versus a percentage. We elevate that flat rate each year for new franchisees coming into the system but “freeze” it for existing units. As the business gets larger and more sophisticated, we feel justified and qualified in being able to charge just a little bit more. Currently, it’s a $419 flat rate per month.

It’s a different system and there is a lot of debate with our accountants and other franchisors regarding this topic. They ask: “Why would you continue to use a system like this?” The answer comes down to why we wanted to launch a franchise in the first place. We are passionate about our franchise partners and we want to spend our time helping them develop themselves and their businesses. We don’t want to spend a lot of time on things with negative energy, like auditing their books.”

What did you want to avoid when you selected this system?

Brian: “There’s a natural friction point that exists in franchising that industry veterans are very familiar with. When a percentage royalty is charged, a franchisee can spend some of their day finding ways to hide money or sales results so they can pay less overall. This is not a moral failing on the franchisees’ part, it is simply human nature. The franchisor is then forced, as a result, to spend their energy on trying to audit or find that money.

We looked at that and said, “That’s a lot of negative energy on something that actually doesn’t really gel with our governance.” When you’re a flat-rate system, there’s never a doubt in the franchisees’ mind. They do not suspect an “ulterior motive” on behalf of the franchisor when we are trying to help them grow their sales.

If we spend a little bit more time on a business quote that they need to put together for a large sale, for example, there’s never the thought that we might be doing it because we’re trying to increase our own royalties – they know that we are in it for them. We spend our day doing what energizes our corporate office team – creating success for our franchise partners.

driverseat olympicsWould you be able to provide me with some concrete examples of this strategy in action?

Brian: A pretty significant portion of our business is B2B where we provide chauffeur and shuttle services for employees – moving them between production plants or warehousing plants for example. Landing these accounts represents more work in terms of sales, but the revenue opportunities are also far greater.

About a year ago, one of our franchise owners had one of these B2B opportunities and we were passionate about helping him land it. We pushed him to do a better job with mapping, and explaining the services and technology. We helped him put a significant effort into the presentation package. As a result of the group effort, he landed the sale. They still provide service today to that same customer and it sparked other sales from there.

When working with franchisees, we talk to them about their personal goals as well as their professional goals. A personal goal of one of our franchisees was to do a better job at handling herself in meetings and to be more comfortable in public speaking.

We created a plan to help her do two things:

  • Present to a B2B prospect with her husband and business partner.
  • Have her build enough confidence to showcase her expertise in front of our franchise group at an annual conference.

I was able to really push her on this and hold her accountable to the goals that she set. It resulted in her doing more business meetings, and it resulted in them building an additional revenue line. Both their profit and revenue increased – on top of that, she was able to develop as an individual.

How does this system foster a sense of trust between you and the franchisees?

Brian: “There are only two things that we really focus on:

  1. Top-line revenue and profitability for the franchise owner
  2. Trust between home-office and the franchisees.

When we have profitable sites and they trust us, that becomes the magical mix. Everything that we do is focused around those two very important factors.”

How does this strategy affect unit sales?

Brian: “We’re attracting higher-quality individuals because they are seeing terrific things happening within Driverseat franchise locations.”

What would you say the biggest challenge of operating this way is?

Brian: “It comes down to the lifecycle of a franchise system. Percentage royalties feed a corporate office. That allows you to purchase additional talent, resources, and better technology. When you charge a flat rate, in the early days, there are times you’d like to have higher revenue at the franchisor level to drive higher performance.

It has forced us to be extraordinarily smart in how we spend money and how we develop programs. The first couple years we ran the franchise system with just Luke and me.  We literally managed tech development, marketing, franchise support, and franchise development with just the two of us.

But not once in any day that we’ve been in business for five years of franchising, have we said, “I wonder if this stuff’s being reported correctly. I wonder if we need to create an audit and find out if this information is accurate”. There is no incentive for a franchise owner to misrepresent their dollars.”

What advice would you give someone who wants to try a structure like this?

Brian: “You have to be focused on the long game to do this. If you’re focused on the short game and you believe that you’re going to have a small number of franchise locations that you need to rely on, then it might not work.

We look at this from a long-game perspective and say, “It really doesn’t matter what happens in the first handful of years. This is really about, how do you get to between 2,000 and 3,000 locations?” And we believe this is the single best source for doing it. If you are going to commit, don’t look back. It’s perfectly acceptable to increase the dollar royalties each year for new locations coming in. But, don’t look back and don’t get fixated on what “could have been”.


With everyone we interview, we ask a series of fun questions! Here is Brian’s Q&A!

What new belief, behavior, or habits adopted within the last five years have most positively impacted your life?

I’ve embraced the belief that entrepreneurs today should really be part of the new rich as described by author, Tim Ferriss. We should look to create financial wealth but not just chasing the dollar every single day. Instead, we should create enough wealth that supports a lifestyle that we want to live. The new rich, for me, is about the ability to earn revenue, which then supports time with my daughters and my wife, and time travelling.

For franchise owners, I try and bring this to the surface with them. It’s about going out and having a strong business that’s very healthy financially, but not for the purpose of upgrading the Lexus car from this model to that model, (you can certainly go and do that as well).  Instead, it is for the purpose of being able to enjoy life, enjoy your family, and enjoy time which is one of our most valuable assets.

What purchase of less than $100 has improved your life?

I really love being able to pleasantly surprise somebody that works with us with small things such as a lovely meal with loved ones. For me to purchase a $50 gift card to a brilliant local Italian place that’s right around the corner from our office is a fantastic gift for someone who has gone above and beyond. For $50, you can have an amazing lunch there.

What would you put on a billboard?

Brian:  “Spend your life purchasing experiences, not products –  experiences with friends, experiences over dinner, experiences in social settings and experiences in travel.”

What books have you most gifted?

  • The 4-Hour Workweek by Tim Ferriss is a terrific book for prioritizing your time.
  • The Wealthy Barber by David Chilton is great to help give people financial independence.
  • Love Work by Chuck Runyon who is the founder of Self Esteem Brands. He’s a really outstanding leader. And the “Love Work” book really talks about passion and the culture he built within Anytime Fitness.
  • Good to Great by Jim Collins which is a factual study of how certain companies overperformed.

Ready to learn more about Driverseat? Read more here on their Franchise Opportunities page!

Download our Cheat Sheet: 24 Ways to Motivate Team Members and Franchisees with Experiences!

Experiences as Reward

How a Founder Can be a Great “First Coach” to Early Franchisees

By | Battle Tested Strategies, Franchise Coaching

Angela Cote Franchise Coach LogoIn the early days of franchising, the owner often becomes the first coach. How do you drive results with early franchisees when you are an emerging franchisor?

There is a lot to learn from Angela Coté, who grew up with M&M Food Market, an iconic Canadian frozen food retail chain that grew to almost 500 stores across the country. We sat down with former franchisor, current multi-unit franchisee and Franchise Growth Catalyst, Angela Coté, to hear her thoughts.

Tell us about how you got into franchising?

Angela: My father founded M&M and having grown up with it, I have done everything from dressing up as our mascot, “Kelly Kabob” in the mid-80’s for grand openings, to running around Western Canada helping develop the chain in the late ‘90’s. This included opening stores, training franchisees, and getting them up and running.  Eventually this informal role changed into a field consultant one and I worked with franchisees on engagement and profitability.

Angela Cote Meeting

What stands out for you most about the early days of M&M?

Angela: I was a 20-year-old female field consultant and the franchisee was often a 60-year-old male who had just spent his life savings to be a part of the brand. I am certain that some of them were asking themselves “She is the boss’s daughter –  what does she know about taking a risk? What does she know about investing all this money in a business?  How could she possibly help me?” But I worked hard to help them understand the importance of following the operational system, which drove their results and eventually earned their respect.

In that role, I had to learn a lot by trial and error.  As their support person, I started to understand what they were going through, as they experienced a lot of ups and downs emotionally. They were tired and had invested a significant amount of money, making it a really big deal for them. I came out on the other end with some hands-on direct experience – in franchisee relations!

In 2000, I became a multi-unit franchisee which, reflecting back, helps me really understand the franchisees and their concerns – now it is my life-savings at stake!  As a result, I’ve got both sides of the ‘franchise coin’. I understand what it’s like to be an early-stage and established franchisor, and to actually live life as a franchisee as well.

Today, I help businesses with franchise strategy and I coach their franchise business coaches; profitability is the number driver of growth in a franchise, and it is something I am extremely passionate about.  I am super-excited to have had the ability to create the angela COTE Inc. brand, which enables me to tap into what drives me and what I’m truly passionate about.

Spray Squad TeamWhen a franchise first starts, the founders are often the first coaches. Based on your experience, what tips would you give to a founder or coach with these early franchisees?

Angela: Showing early franchisees that you appreciate them is critical. I think that people take them for granted. In the early days, acknowledging that, “Hey, thanks for believing in this when no one else does.  Thanks for understanding that we’re not a well-oiled machine yet”. Here are four tips for franchisors regarding their early adopter franchisees:

  1. Get clear on expectations: When an emerging franchisor first starts, there is frequently a lack of clear expectations on both parties. When I say expectations, I mean, for example, what support the franchisees are going to get because it hasn’t even been built yet. Franchisees are expecting support because they bought into a system and they have pre-conceived thoughts based on popular perceptions of more established franchisors. Setting clear expectations up-front is a great first step.
  2. Recognize early adopters: Recognize that these first franchisees are early adopters according to the Rogers diffusion of innovation bell curve, and ensure that they know the systems are not set up yet. Clarifying that is huge in the early days. Often the early adopters are clients.  For example, maybe it’s a fitness studio and they love being a member, love the culture and think “I want one of these for myself.”

rogers diffusion curveIn response, a great way to put it is: “We would love to have you but know that we are still working towards building out our systems and processes for optimal efficiencies and profitability.  and you’re going to be part of creating that with us. Don’t expect it to be built. On the flip-side, you get to help us build it by telling us what you need and getting a lot of say in what is created.”

The early franchisees get the opportunity to scratch their “entrepreneurial itch” more, but still have to understand and balance the fact that it’s still a system.

  1. Set up systems through trial and error: Regarding setting up the systems, I think people feel as though to coach their franchisees, they need to have very formal systems established. I think it works best to do it as trial and error. I’m a big believer in the “lean start-up”, or the “minimum viable product”.

At the beginning of being an emerging franchisor, you don’t know what the franchisees want so don’t go out and create this massive “support system” that you use to coach your franchisees without asking them. Instead, work with them, try it. If it didn’t work, don’t “freak out”. That’s fine. We’re going to adjust this. We’re going to tweak that.

You really want to wow them, so that they talk highly about you, so you can grow the brand.

  1. Under-promise and over-deliver. It may sound cliché, but it needs to be said – under-promise and over-deliver to your first franchisees when you are an emerging franchisor. You really want to wow them, so that they talk highly about you, so you can grow the brand. So that when other people come and say, “What’s it like here?” they reply with, “it’s awesome!”

What are common pitfalls for coaches and founders?

Angela: The other pitfalls that a first early coach and founder is losing touch with your corporate location. This isn’t good for profitability and business growth. Additionally, from a perspective of a franchise coach, franchisees will think that you can’t relate anymore because you’re not working in the business.

The way to avoid that pitfall is to have a general manager at your corporate location who really understands how to grow the business. Be in touch with that person, communicate regularly with what’s going on in that corporate location so that when you’re talking to franchisees, you can say things like, “Yeah, we’re going through that same problem at our corporate location.”


With everyone we interview, we ask a series of fun questions! Here is Angela’s Q&A!

What new beliefs, behaviors, or habits adopted in the last five years have most positively impacted your life?

Angela: Getting a coach!  I hired a career coach three years ago to help me tap into my passion and figure out how to make that into a career. That was the best decision I made in my entire life. Later, I got an amazing performance coach. No matter what your income level is, it is super valuable to have someone with experience help you stay on track.

Purchase of less than $100 that’s improved your life.

Angela: My monthly membership to my local floating franchise, The Float House. You float in a tank with high level of salt. Sensory deprivation is a dark, warm and relaxing experience and is great for those stressful days.

What would you want to put on a billboard?

Angela: “Contrary to popular belief, franchising is NOT turnkey. Franchising a business requires someone with expertise who understand the complexity of the model. Buying into a franchise as a franchisee requires hard work, leadership skills and true grit.”

What books have you most gifted to other people?

Angela: It is a bit embarrassing, but it is a business book: Traction by Gino Wickman. This helps clients with vision, short-term and long-term plans.

More Info:

  • To learn more about Angela, you can go to her website at angela COTE Inc.
  • To learn more about FranchiseBlast field audit and scorecard software, go to our website.
  • Would you like a PDF of this article? Download PDF here.

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