Communication Can Make or Break Your Franchise System

At #IFA2015 during the Tuesday Business Solution roundtable session, I sat at Table 82. The discussion was moderated by Catherine Monson, CEO of FASTSIGNS International, and the topic was “Building Trust Between the Franchisor and Franchisee.” The group at the table included franchisor management from several brands of various sizes, multi-unit franchisees from two major brands, and a few suppliers.

The conversation was robust and the group benefited greatly from having both franchisors and franchisees represented. All the advice shared at the table circulated around one theme – communication. Communication and collaboration between franchisor and franchisee is critical to both the health and the growth of the brand. In addition, several participants emphasized that communicating bad news effectively was even more important than communicating good news.

As a technology supplier in the franchise industry, I was interested in this topic because technology has become mission critical to both franchisors and franchisees. The franchisor is expected to lead the way by presenting a clearly defined, comprehensive technology strategy that will drive bottom-line growth. At the same time, the process of developing a technology roadmap needs to include collaboration with franchisees to get buy in on planned technology investments.

What happens though when there are franchisees with more technology experience than the franchisor? This may be ok early on when you can count the number of units on one or two hands. However, as a brand starts to scale, the franchisor needs to focus on operational efficiency and scalability which are typically driven by technology. If the franchisor is not leading the way, tech-savvy franchisees will try to fill that gap but that can lead to a fractured, disconnected franchise system.

On a call I had recently with the CEO of a fast-growing franchise brand, he said that one of their business objectives is to effectively become a technology company to properly support system growth and the needs of their franchisees. They have been listening intently to their franchisees and identifying areas for improvement – both in efficiency and quality. Technology was determined to be the solution in 75% of these identified areas for improvement.

How would your brand answer the following communication-related questions?

• How do you communicate technology initiatives and/or issues to franchisees?
• Do you solicit feedback and suggestions from your franchisees?
• Are you holding technology-focused virtual roundtables with your franchise advisory council or other franchisees?

#IFA2015 Table 82 had the answer to these questions – communicate thoroughly and collaborate frequently from the very beginning.