Specialist advice

Getting control is the first rule for franchisors. If you are going to let franchisees trade under your brand name you need to enforce tight controls over how a franchisee can operate.

If you have a network of individuals trading under your company name you need to ensure they do not do anything that could damage the brand reputation you have established. The best way of ensuring this is to be very prescriptive in the way that franchisees operate, which will greatly reduce the risk of a franchisee doing anything damaging to the brand.

Protect the brand
Franchisors also have a legal obligation to protect the investment of their franchisees. Therefore the franchisor needs to take reasonable steps to ensure franchisees don't do anything that can affect the business of other franchisees within the network. This typically can occur when one franchisee does something bad in their local area that is picked up on by national media. This negative publicity then impacts on all franchisees trading under the brand. Again the best way to ensure a franchisee does not do anything that could have a negative impact on others in the network is to be very prescriptive on how they must operate.

Follow the system
The long-term success of any franchised business relies on having successful franchisees. The best way of ensuring the success is by making sure that the proven model is replicated. As soon as franchisees stray from the model there is a much greater risk that they will not be as successful. Failing franchisees are likely to impact financially on the franchisor, both through the reduced monthly fees and/or the products and services purchased by the franchisee.

This will also have a negative impact when it comes to recruiting as prospective franchisees are less likely to want to buy a franchise if its current network is struggling. Therefore the best way of ensuring a franchisee is successful is by being prescriptive in the way they run their business. Future growth relies on the whole network operating in the same way.

All about balance
You should also take into consideration the viewpoint of your franchisees that may find the rules too prescriptive. It's important to remember that one of the main reasons someone ditches the day job for a franchise is because they want to get away from being told what to do. It's essential to strike a balance. One way is to allow franchisees to voice their opinions and for them to know that their comments are being properly considered.

Involving franchisees
Clearly franchisors should not instigate every idea that a franchisee suggests, since there will be many suggestions made that are impractical and worse still could be damaging to the business. It is essential, however that there is a system in place that allows for suggestions to be heard and examined. This encourages franchisees to put forth suggestions knowing that their ideas will be considered but without creating any
false expectations.

Franchisees can often be more in tune with the day-to-day impacts on their business than the franchisor and may have ideas for potential changes that could benefit the whole network. Clearly, if a franchisee has a good suggestion that will benefit everyone then commercially it is likely to make sense to implement it. Set up a committee with franchisees, as well as the franchisor, that is responsible for harnessing new ideas. These franchisee representatives can provide invaluable front line input into discussing the validity of any suggestions, but also be a very good way for feeding back the committee's decisions to other franchisees.

So how much influence should franchisees have on the way they run their business day to day? Getting the right balance is essential, and the operations manual should be the corner stone of the business supported by clear communication channels between the franchisee and the franchisor. Establish meetings where any variance to the standard practices can be discussed and a course of action agreed. This allows the franchisee to express their views on how they may want to handle day-to-day events and situations whilst giving the franchisor the comfort of ensuring the integrity of the brand and the overall business.

Strong franchises are the ones where there are very clear systems and processes in place, which are supported by clear, open and transparent communication channels between the franchisor and their franchisees. Getting the right balance can be the key to a successful franchise.