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.
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:
- 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 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.
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.
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.
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.