What Franchisers do for Their most Successful Franchisees

By: Robert A. Gappa

President, Management 2000

All senior managers and leaders want to think of ways to ensure their top contributors: (a) are aware of how much they are appreciated, (b) give their ideas, 8 give solutions, (d) maximize opportunities, (e) participate in innovative programs. We know that it is our top performers who most likely to be at the top of our rankings in the most important metrics of the business. This means relative to the rest of the system, they are: getting and keeping more customers, attracting more new customers, have the highest customer retention rates, have greater customer frequency, have the best customer satisfaction ratings, have the lowest employee turnover and the highest employee satisfaction ratings, increasing their market share and achieving above average economic performance.

The purpose of this article is to share with the Franchise Update readers some of the programs franchisers have for their top performers. We encourage you to call, write and fax your questions, comments and additional programs to us for future articles.

1. Establish Leaders Groups

“ Participant=s must qualify to belong. Sample criteria include:

“ Pre-determined levels of profitability, gross revenue, market share, etc.

“ Full compliance with your system

“ Current with all fees

“ No law suits with you

“ Field reports are excellent

“ No history of default

“ Years in the system

“ Growing their business every year

“ Number of locations

“ Participant=s attend quarterly meetings, with senior management, to discuss input on: continued growth and profitability, new products and new profit centers, changes to the system, thoughts on how to make the system more successful, strategic issues, business and personal financial planning, vendor ideas, idea exchanges, hear and discuss ideas with industry experts, discuss technology, how to implement change successfully.

“ For one of the quarterly meetings each year the group meets socially on a cruise or at a resort with the president of the company. Participants can bring one person. Children are not allowed.

“ The group elects a president for the purpose of communicating the agenda for each meeting. Agendas are distributed early so members can prepare for the topics to be discussed.

“ Benefits include: ideas, morale, feeling special access to the president and senior management, other franchisees want to belong and work to meet the criteria.

“ Corporation and/or vendors pay for the quarterly meetings and the annual social. Participant=s pay for their expenses.

“ Since this group often validates the 80/20 rule (20% of your system contributes 80% of your profits) they are assigned one field consultant, of special stature and proven ability) who has Ahelping them grow and expand@ as his/her full-time assignment.

“ Additional recognition occurs at the annual convention and through a newsletter targeted only to this group.

2. Quarterly Meetings

“ No special group designation by name. Qualification is usually by gross revenue.

“ The purpose of the meetings are to discuss problems, issues, air grievances, discuss new marketing ideas, socialize and convey an appreciation of their importance to them.

3. President=s Council

“ This group gets formed mostly at the personal choice of the President or the President and Senior Managers. Its purpose is to get together with the Aleaders@ once to four times each year to socialize and get feedback from a guaranteed Anon-hostile@ group.

4. Strategic and Operational Planning

“ The top revenue producing franchisees are invited to the corporate offices, in groups of five to ten at a time, for an intense and concentrated week of planning culminating in the presentation of their business plan to their group of peers. The presentation is video taped and a copy is given to the franchisee to show to his/her team.

“ The sessions begin with dinner on Sunday night and conclude on the following Friday with each business plan presentation.

“ The topics included in the training session run the gamut of: personal leadership style, values clarification, personal goal setting, personal financial planning, business planning, market share, getting more business, marketing, relationship data-based marketing, financial security, valuing the business, etc.

“ These sessions have plenty of interaction with their peers, corporate group facilitators and invited Aoutside@ facilitators.

“ A big emphasis is placed on determining the purpose for each franchisee=s being in business. The belief is that purpose is very powerful and drives the accomplishment of results. Once purpose and personal goals are determined and linked to the franchisee=s business goals the business will prosper.

“ Often couples will attend as well as business partners.

“ In almost all instances the week long experience results in increased revenues from existing locations, the opening of new offices. On occasion participants realize they should have an exit strategy (some sooner than others).

5. Involvement in the Companies Strategic-Planning

“ As we grow in understanding the power of franchising we increasingly recognize that franchisees are really Aimplementers of our systems@ and of part of our corporate business plans.

“ In truth we are delegating to them, without telling them, a certain portion of our anticipated results. In the past franchisers have been reluctant to involve franchisees in their (sic) business planning (even though it greatly affected them). The realization that Managing By Objectives is a valuable franchisee tool has brought increasing numbers of franchisers to the realization that they benefit from franchisees= input and commitment, when the top franchisees are involved in the planning process.

“ Financial planning is not done here and no personnel decisions are made. It is strategic and operational planning only.

“ This involves pre-work on everyone’s part. The meeting is controlled by corporate. The franchisees are often from the Advisory Council. The meeting is most successful if facilitated by an outside person. The duration is three days with the whole group. Two additional days are spent with the corporate people finalizing the items to be place on the critical path, to assign accountability and allocate resources.

“ Follow up is quarterly.

“ Corporate would pay these expenses.

6. Specific Types of Committee Involvement

The criteria for what follows varies. Most common the criteria include some or all of the criteria listed for the leaders.

“ To rewrite operations manuals and training programs

“ Give advice on default

“ Assist in new product development

“ Advice on technology

“ Merger and acquisitions to ensure maximum integration of culture and systems

7. Role in New Franchise Recruiting

“ As we grow in our understanding that we recruit qualified candidates who have the background to do what needs to be done to be successful in our franchised businesses we can look to our leaders to help us determine the profile of a successful operator so candidates can be analyzed by the template of that profile.

“ Franchisers are increasingly having their most successful franchisees analyzed by professional profiling companies. This seems obvious after not much thought.

“ The most successful companies in this country know the hard and soft qualifications it takes to successfully perform in a job. Executive recruiters use them all the time to perform their jobs successfully. Sometimes franchising seems like the last to realize they are recruiting people and not selling to just anyone with any qualifications.