Franchise Tip #6: When doing your due diligence, be sure to explore the relationship between the franchisor and its franchisees.
There are a number of ways to find out how receptive a franchisor is to the needs, concerns, questions, and suggestions of its franchisees. Seasoned franchisees will tell you that one of the best ways to ascertain this information is by talking to other franchisees. Make visits to units in your area and spend some time talking with an owner-operator to find out the pros and cons of investing in the franchise, where the company has its strengths and what its weaknesses are.
During a discovery day with a company, a potential franchisee is evaluating the company as much as the recruiters are evaluating them. Make sure to query the franchisor about the ongoing support it offers to franchisees once a business is up and running.
Anytime Fitness is perhaps one of the leading examples of a company that has very open lines of communication with its franchisees. Every franchisee is connected to the company through an online “dashboard,” a virtual round table for comments, suggestions, and feedback for improving the franchise model; as well as videos and an anytime radio station. All of these are intended to support the franchisee in everything from operations to sales.
“The No. 1 thing to instill development is to provide tools and resources to help them,” says co-founder Dave Mortensen. “They can be confident that we are providing them with new tools to help them grow.”
In addition to utilizing technology, the company also provides personal attention by assigning each franchisee with a company consultant called a “coach to inspire,” or C2I to help build the business.
Another confidence booster for a franchisee might be an established franchise advisory council that are common in the industry. Typically a council is comprised of nominated franchisees from diverse regions who meet on a regular basis with company executives to voice opinions about everything from operations to promotions.
Boston’s The Gourmet Pizza Restaurant & Sports Bar is one such company with a franchise advisory council made up of four franchisees from each of Boston’s U.S. regions. They are elected by their peers and convene regularly to discuss concerns, share ideas and best practices, act as liaisons between Boston’s franchisees and the corporate entity, and even make proposals about changes for the company.
“They talk about challenges, opportunities, prototype design, stuff like this,” said Boston’s Chief Operating Officer Mike Best. “The good, the bad, and ugly — whatever it may be — is just going to make us better as we develop the system.”
As examples of changes instituted because of suggestions by the council, Best pointed to the the company extending the time between new menu introductions to give customers an opportunity to become accustomed to new items, as well as the selection of fabric for server uniforms in favor of something more durable and stylish than what the restaurant had used previously.
bd’s Mongolian Grill, a growing fast-casual restaurant chain, is another franchise intent on communicating with its relatively small number of franchisees. President Joe Phraner says he wants them to be “involved in the business” and will always test things such as branding decisions and new products in its company stores and then share the results with franchisees before instituting them. The company culture includes encouraging master grilling competitions to find the chain’s best griller and compiling a grill song book that servers can use to entertain guests while grilling their food.
But Charleys Philly Steaks took the competition concept one step further. In addition to its franchise advisory council, the company took its interaction with franchisees to a whole new level, making news with its GrillMaster Sandwich Competition.
The contest was open to all employees of Charleys worldwide, who were given the chance to have their own sandwich creation featured on the restaurant’s menu as a special limited-time offer.
“We’ve seen others do this with customers, but it was more important to us to get feedback from our frontline advocates,” said Mike Cassar, vice president of marketing for Charleys. “It was to engage our franchisees.”
The company plans to make it an annual competition.