The ability to keep control of your product and ensure consistency of your offering is one of the biggest challenges facing entrepreneurs who franchise. Learning from the examples of the most successful franchises out there, we’ve identified offer 3 strategies ways to pursue to keep control of your franchise expansion.
How to Keep Control of Your Growing Franchise
“I was dead set against franchising. I didn’t think we’d be able to control the quality. That worried the heck out of me. They pulled me into it kicking and screaming. At that point, we had five stores in the northern Virginia region.”
Jerry Murrell, owner of Five Guys – Five Guys now has more than 1,400 locations worldwide and is one of the fastest growing restaurant chains in America.
It’s a great scenario to be in. You’ve negotiated through the difficulties of starting your own business. Now your business is up and running, you’ve proven that there’s a market out there for your product or service. From wondering if you’ll be able to make it, you’ve moved to wondering how big you can make it. Franchising could be a great option for you, leveraging capital and the enthusiasm of franchisees to explore new markets and expand your business. But many outstanding entrepreneurs falter at this step – having achieved individual success, trusting others to develop the business further is a daunting prospect, prompting the question how can I ensure that the franchisees will be able to deliver the quality of service that I’ve built my business on??
Losing operational control of your brand is naturally a big fear and one of the risks of franchising; in the end, the success of a franchise expansion will be reliant on a consistent level of quality service in all its locations: consistency is the key.
Steve Easterbrook, CEO of McDonald’s – probably the world’s best-known franchise – agrees. “Consistency is really, really important to our customers. Fundamentally we’ve got to keep working to make that everyday experience more consistent, more enjoyable, and more fun.”
This makes sense. It doesn’t matter where in the world you are; entering a McDonalds, you recognize the familiar smells, the real estate design, the staff uniforms, the product range and the promotional offers. Whether you are in Boston or Berlin, you can order the same BigMac with fries you love so much.
Keeping this consistency is the challenge so that as you scale your franchise brand, the different franchisees have the same success as your original stores. Every successful new location enhances the reputation of your business, but underperforming or poorly managed franchises reflect badly on the whole chain. In the initial phases of developing your business, your product was successful because of your interventions, ideas, and efforts. Delegating all these responsibilities to others creates legitimate concerns. Add to this that you may not know these individuals, and because of distance, you won’t see them in person regularly, and it is important to consider whether you want to risk what you’ve built to date.
But rest assured, you are not the only one who has had these doubts…
Back to Five Guys. Murrell conveys the feelings of anguish that many franchisors have when considering scaling their franchise. Fears about the future of the brand if the quality of the product begins to escape from control during the scaling process, prompts franchisors to ask themselves hard questions… How will I be aware of what happens every day in all my premises? How will I convey the values of my franchise brand if I am thousands of miles away from my franchisees? How to control the growth of my franchise effectively? How does franchising help a business grow? How will I make sure that the employees of each franchisee are properly trained? How will I evaluate the employees who work under my brand name?
But don’t worry! Fortunately, there are steps and franchise expansion strategies you can take that will help ensure that your brand retains the quality you expect…. Because if Murrell was able to address his concerns about franchising and turn Five Guys into one of the great franchises in the world, why can’t you?
3 Ways to Deliver Consistency and Keep Control As Your Franchise Scales
1. Create an Environment to Ensure Communication Flows
Back in 2010, providing consistent quality was identified by Subway – the world’s largest franchise – as their biggest challenge. To tackle this, they worked on implementing a five-year strategic plan to be distributed among their franchisees.
We’re not suggesting that all franchises need a 5-year plan, but maybe what’s more useful to learn from Subway in this example is some of the operational solutions they put in place in the short term to improve consistency. They began to use new technologies to institute a process to “foster improved communications and hence better relations with franchisees”.
Through this program, they not only instructed franchisees about brand values and customer experience but also invite them to raise any concerns or issues they have in mind. “One operator brought up some equipment problem he was having,” former CEO, the late Fred DeLuca commented, so, “I asked all the other operators on the call if they knew about it, and every one of them did. No one here [in headquarters] knew about it. It was subsequently fixed”.
This type of issue is likely to be relevant – on a smaller scale- to your situation: the need to have visibility and communication with the different franchisees when scaling your brand. Productive communication channels allow for a two-way flow – as Subway demonstrates, HQ needs to be able to disseminate strategic information but also benefits from the information flowing back from franchisees on the ground. The good news is effective communication to control franchise expansion no longer requires a large investment. With cloud based solutions there are lots of cost effective options for smaller operators. You can use communication tools like Slack or Hipchat, or if you want to focus more on training, GoConqr is ideal.
Years ago, distributing material to each franchisee and monitoring employees’ training process at a distance was a cumbersome, slow and unproductive task; nowadays, you can find a wide range of digital tools to share knowledge anywhere in the world in a matter of minutes. Michael Johnson, general manager of the franchise Card Connection, explains that “the introduction of new technologies will improve our productive level” and “will change the way we train our franchisees.”
2. Document your policies and procedures – and try to do it in an engaging way!
A report by the International management consultancy Oliver Wyman points out that between 25% and 35% of the difference in performance – sales and profits – among franchisees is driven by variations in customer experience (see below); so brand inconsistency can cause losses in your franchise and reduce the positive effects of franchising (which reflects badly on the business as a whole).
At the danger of stating the obvious, the starting point in ensuring consistency is documenting your expansion process and procedures as much as you can. There is nothing new in this, consistency has been the de facto franchising mantra for years. However, it’s worth considering the best way to approach this. Not so long ago manuals were endless paper books full of instructions, impossible to finish without falling asleep… But that is already part of the past. With new technologies and online resources, developing a dynamic and visual instruction manual is simple.
Having a digital version of your franchise expansion policies, processes and procedures have a number of advantages as you look to scale fast:
- The ability to easily update content on a regular basis as the business evolves allows you to easily keep pace with the market and regulatory environment, the main objective of a franchise
- Developing a consistent approach across a number of franchises become easier
- Material can be developed and delivered in a much more engaging fashion – e.g adding videos, interactive quizzes – leading to more likelihood of consumption and comprehension
- Material can be pushed out regular intervals, and consumption tracked electronically so that you know that material is being read (rather than gathering dust on a shelf)
Rod Young, founder and CEO of DC Strategy -a company that has helped brands like Gloria Jeans, 7 Eleven, Telstra and ANZ, among others- explains that “technology has been a great influence in franchising because, back in the early days, manual reporting was the norm but what we are seeing is quite sophisticated information systems nowadays” that make “reporting, marketing, customer service and various other important aspects of the franchising model a lot more effective and efficient”.
Policy and procedure content will be the reference to follow for the different franchisees and, consequently, the guide that will direct the evolution of the business. IFranchise Group founder Mark Siebert points out that “the franchisor must include very specific instructions on the company’s operations, reporting requirements and expected performance standards” for successful franchise expansion development. Therefore invest the time to get this step of the process 100% right, as it forms the bedrock of ongoing success.
Doing this is easier than you think with franchise software tools such as GoConqr that allow for quick creation and distribution of learning content.
3. Ongoing training and assessment to control franchise growth
An efficient and regular two-way communication flow with your franchisees is the key to the ongoing success of your brand. Tariq Farid, CEO of Edible Arrangements and recognized Entrepreneur of the Year by the International Franchise Association, considers it essential “to spend a lot of time communicating online with franchisees every week, evaluating their performance and assessing new challenges.”
So you can’t ignore your franchisees once you have created and distributed the manual about your brand… it’s exactly the opposite!
Any successful business needs to constantly evolve to improve its product offerings and the customer experience; a dynamic that must be reflected by each franchisee through ongoing online training and evaluation of staff. According to franchise consultant Alan J Gibson, this step is vital to “engage others with a sense of direction and purpose, align all activities and review progress.”
The best way to do this is to have an assessment process for franchisees and franchise staff that allows you to check on knowledge of the most important elements of your business. Create routine courses or quizzes that staff must take digitally on a regular basis. Track performance and set minimum acceptable standards of knowledge. You can allow your franchisees to monitor their own staff progress, as well as reporting back to HQ.
But beware! Before starting to prepare your assessments, we suggest you avoid two common mistakes that franchisors make:
- Being redundant or too generic
The questions should be specific, relevant and focused on the aspects of training that you consider important to highlight during the franchise expansion. An overly long and dense test, with irrelevant and repetitive questions, will only cause annoyance among employees and not deliver the results you need to accurately evaluate each franchisee.
It is better to use short, targeted and frequent assessments – whether for general brand awareness or testing knowledge of new products and promotions.
- Leave employees without feedback
What’s the use of developing tests if you don’t do anything with the results? It doesn’t matter if the results are positive or negative; the employees have taken some time to complete these tests and deserve some kind of feedback. If you don’t react to their results, the existing problems may persist and necessary improvements to offer a consistent experience in all the locales of your franchise may not be implemented.
Franchise software solutions such as GoConqr will help you create quizzes and tests quickly and generate reports on user performance. Comparing results across different franchises can help you identify the most successful interventions to maintain brand consistency.
A final wrap-up…
At the end of the day, nothing beats running your business in person. The best businesses grow through leadership and value setting. With franchising, the ability to be in store or on site in person diminishes rapidly. That’s why it’s so important to start building the elements early to keep control of your expansion.
From reviewing success stories and based on our experiences with working with franchisors, we’ve identified the following franchise expansion strategies:
- Look for communication tools that can help ensure franchisees are always on-message and their feedback is channeled productively
- Document the processes and procedures that need to be replicated, but do so in an engaging way
- Use continual training and assessment to ensure that desired performance is maintained so you enhance the positive effects of franchising across all locales.
At GoConqr we have a number of specifically developed tools for franchisors that enable them to create and deliver material for training and ongoing assessment. For more details about franchise expansion, get in touch here.