One of the biggest challenges to rolling out an effective franchise scorecard program is getting buy-in for KPIs. A lot of time both franchisors and franchisees can see the need for them but are concerned about making any significant changes outside of the original franchise agreement. Here are some tips based on what is happening in the franchise community right now.
1. Document Process of Developing KPIs
It is important to remember that franchisees are independent business people and need to understand the rationale behind the numbers. That is why the favourite question of your best franchisees is “why?”. If you carefully document how the KPIs will enhance the brand of the system and how it will benefit each individual location, you can have your bases covered in terms of KPIs. The KPIs were not pulled from thin air – they were based no the franchisor’s reasonable judgement on key success factors.
Now, more than ever, you probably hear your franchisees complaining about competition. So – talking about how the KPIs were developed to beat local competitors is a great way to get buy-in. After all, you are proactively solving problems for your franchisees, which is a key value-add of being part of the system.
2. Seek Franchisee Buy-In Before Implementation
The best-case scenario is to get your Franchise Advisory Board (FAB) to co-create your KPIs with you. Interestingly, these successful franchisees can see the weaker ones as hurting the brand and their own investment. Getting your FAB to develop the KPIs with you and even connecting them with roll-out communications such as newsletters, webinars and social media can be a powerful tool for compliance.
If the FAB is not engaged in the initiative, having some of your larger franchisees adopt the KPIs ahead of time can also be a great boost for the initiative.
3. Use a “Carrot” rather than a “Stick” for Compliance
Encouraging positive behaviors, rather than punishing negative ones is a good rule of thumb in general, but it is more important than ever in franchising. Potential rewards include:
- Eligibility for expansion.
- More AdFund or PR support.
- Being in the “spotlight” on webinars, internal case studies and social media.
All of these are great rewards and creates a positive energy around your program. It also mitigates the risk of a dispute.
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FranchiseBlast’s Scorecards were built especially for franchisors and we have a deep understanding of this environment. Reach out to us to learn more about how Scorecards can help your franchise business.
Thanks to the presentation from Higher Logic for some of the inspiration for these tips. Ron T. Coleman, Jr. Parker Hudson Rainer & Dobbs, LLP Elliot R. Ginsberg Garner & Ginsburg, P.A. Sarah A. Walters Perkins Coie, LLP.