SUCCESSFUL FRANCHISING – A QUESTION OF RELATIONSHIPS

(Part 4 of a 4 part series)

Advice on franchising by Pieter Scholtz, Master Licensee for ActionCOACH SA. ActionCOACH is one of the fastest growing and most successful business coaching franchises in the world today.

In the first three segments of this four part series on customer relationships we discussed external relationships, ideal customers, satisfying customers, the concept of winning customer service, a customer plan and the ladder of loyalty.  In this last segment we turn our attention to internal relationships.

Many business people hold the misguided view that because what goes on inside their business is not visible to the public, it has no impact or relevance on their customers or clients. This is where they go wrong. Like having a healthy heart, just because it is inside your body and can’t be seen, does not mean it can be ignored. The way you interact with your staff is vitally important to the well-being of your business.

Let us look at some of the important factors you need to consider to ensure that you establish internal relationships that are conducive to developing a healthy, vibrant business.

CULTURE

When buying or establishing a new business, deciding on the culture you would like the business to adopt is an important strategic decision.

It is important that your staff feel comfortable and happy in their working environment. Asking team members to contribute to the decision making process secures their buy-in and affords them the opportunity to identify with the business on a day-to-day basis. Once you have reached a consensus, write it down and display it prominently at key locations in your workplace.

Every business has a culture. Sometimes, however, the culture develops on its own with nobody directing the outcome, and chances are that these haphazard cultures do not contribute positively to the business. Without direction it is probable that many counterproductive elements, like a propensity for gossip, office politics and bullying, have been absorbed into the culture.

The scary thing about company culture is that once established, it is exceedingly difficult to change.  Usually the only way to effect a change is by getting rid of your team, or most of them anyway, and starting again. This is a very expensive option.

STAKEHOLDERS

Internal stakeholders are people or organizations with a direct interest in your business. They are not clients or customers, but are “insiders” by virtue of their relationship with you.

So who then can you classify as internal stakeholders? The list includes:

·         Staff members

·         Shareholders

·         Directors

·         Contractors and subcontractors

·         Suppliers

·         Your franchisor or franchisees

·         Affiliates 

Depending on your situation there may be more. Make a note of those who apply to your business by putting names next to the categories and weight them according to importance. Some, like team members, franchisees and possibly contractors, will rate 100 percent, while others may only be rated at ten or 20 percent.

Going through this exercise will reveal an interesting relationship graph that you can use to tailor your communication efforts. It will also help you to ensure that you aren’t leaving anyone out of the communication loop.

INTERNAL COMMUNICATION

Communication is the lifeblood of any company. As a healthy body requires blood to flow through clear open veins, so too would a company benefit from an open communication channels policy. Furthermore, in order to facilitate effective communications, a good, trusting, and non-threatening relationship must exist between all parties.

Internal communication occurs within a system, whereas external communication occurs between external systems. Internal communication also exists on various levels, the interpersonal level, the intra-group level and the intra-organizational level.

What is the purpose of internal communications and why is it so important? Why can’t we just communicate as and when we need to?

Internal communication has four main functions:

-          To manage information

-          To manage the identification of problems and solutions

-          To manage conflict

-          To manage and regulate behaviour.

Internal communication covers a wide range of important areas, get it wrong and you can expect problems on a wide front. Get it right and you will join an exclusive group of companies who enjoy fantastic working relationships with all their stakeholders. Internal harmony leads to greatly increased productivity and efficiency, which in turn will manifest itself on your bottom line.

FRANCHISE RELATIONSHIPS

In the franchise industry, relationships play an important and prominent role in the success of any franchise system. There are some considerations to bear in mind that don’t apply to other types of businesses. 

The relationship between franchisor and franchisee is unique in that it incorporates both a business and legal relationship, making it more complicated than an ordinary business relationship.

Apart from all the usual considerations that apply to internal and external relationships, overlay your franchise relationship with these special considerations and you will be well on your way to running a successful franchise operation.

1.       Keep your relationship with your franchisor or franchisee cordial. The unique nature of the franchise relationship lends itself to developing close relationships with the inherent temptation to develop friendships. Crossing this line my in time compromise the franchise business model.  It is the nature of business that disagreements are certain to arise and you may have to resort to mediation. Also, friendships can be abused. For example:  Franchisee: “Come on John, don’t worry about it. It is going to be just fine. Remember last year when sales were down and I missed two royalty payments in a row? I came good then didn’t I?” As a business owner, taking advantage of a friendship is one of the most dangerous things you can do. Fall-outs will be nastier and more traumatic than if you maintained a strictly business relationship.

2.       Don’t procrastinate. Make decisions quickly and be firm. Remember, the buck really does stop with you. Avoid the temptation to bump challenges up or down the line by passing it on to your franchisor or franchisees.

3.       Business must be fun. Insist on open communication channels and work on balancing your business, private and spiritual life. Don’t allow your business life to dominate to the detriment of your private and spiritual life.

4.       Try new things. Don’t stagnate. A franchise business must be dynamic in order to survive. What works today might not work tomorrow. If you try something new and it proves successful, let others in your system know. If you are a franchisee, pass this information on to your franchisor who might want to incorporate it into the system for the benefit of others. If you are a franchisor, actively try new things so that your franchisees can remain at the cutting edge of their industry. Constantly provide them with new ammunition and they’ll love you forever.

5.       Don’t think you have all the answers. Business is a two-way street, be willing to listen and learn. Knowledge is one of your best weapons and we can all learn something new every day if only we wanted to. Abide by the system. Remember that it has been tried and tested and do what the system requires of you. A franchise system can be likened to baking. If you want to bake a chocolate cake, follow the recipe and you’ll end up with the chocolate cake, but deviate or leave out any of the ingredients and the result will not be what you were after. Remember, when you buy a franchise, you are buying a system, so use it. If you don’t, you’d be better off starting your own business from scratch.

6.       Learn to ask for help. Pride comes before the fall. Being too proud to ask for assistance will get you nowhere. 

7.       Be the victor, not a victim. Focus on your own success rather than finding fault with your franchisor, as doing so will make you no friends. Also, don’t be one of the noisy people who finds fault with everything. In avoiding responsibility and blaming others for your own shortcomings you will become the victim of a self-fulfilling prophecy and fall into the trap of digging your own grave.

8.        Lastly, one of the keys to success in franchising is to select your franchisees with care.

ActionCOACH Business Coaching

086 122 6224

www.actioncoachsa.co.za