Greg Nathan: How to Keep Franchisees Growth-Minded – Greg’s Healthy Franchise Relationships 2-Minute Tip
In case you missed it, here’s a SUPER valuable article from Greg Nathan. (If you don’t have time to read it at the moment, it’s definitely worthy of setting it aside for your reading list.) Here it is…
“Last week, we held a franchise operations leadership breakfast on the topic “How to Encourage Franchisees to be Growth-Minded”. In this Tip I’ll share 11 growth strategies to emerge from the session.
Steve Rafsky, a former franchisee of Padgett Business Services, a 50 year old franchise network with 400 franchisees in North America, first spoke of how the company was facing serious financial problems after venture capitalists bought it and mucked it up. And how he had been asked to take over as CEO to lead a reinvention process which has resulted in record growth, especially in franchisee and franchisor profitability.
Sixty senior franchisor executives then discussed in small groups what has been working for them to keep their franchisees growth-minded. Here’s what they shared:
- Supplement sales ladders with growth ladders. Because franchisees are competitive by nature, many networks publish a sales ladder to recognise top sales performers. But a growth ladder that ranks franchisees according to their sales growth, or other growth metrics, is a more effective way to encourage, recognise and reward growth.
- Pick a specific growth theme for a defined period. Select a KPI or a theme that ties into your marketing or branding and make this the theme for the month, quarter or year. And use your internal communications channels to support this.
- Use dashboards to make data transparent, fun and easy to monitor. Most data collection platforms such as Xero and Shift 8 can create colourful charts that enable franchisees to check and compare their progress on important metrics. More sophisticated platforms such as Power BI and Fathom can also combine different types of data from different databases into custom KPIs for your business.
- Reduce the complexity and number of promotional campaigns. Instead of a different marketing campaign every month, which can create noise and confusion, pick one strategy that has been proven to drive growth. Then focus on support and training to ensure this one strategy is properly executed to achieve maximum benefit.
- Set specific growth goals with each franchisee. To promote commitment and action, ensure these are meaningful for the franchisee and align with their personal aspirations. Also, that the franchisee has agreed to actions with time frames against each goal. Keep coming back to these in regular catch ups with each franchisee.
- Tailor growth messages to different types of franchisees. For instance, new franchisees will want to grow sales, customer numbers and operational expertise, while more established franchisees will want to focus more on growing profitability and their business skills. Multi-unit franchisees may be more interested in growing more units and their leadership skills.
- Convert more leads into sales. Often franchisees are losing sales by not focusing on the opportunities under their noses. Regular back to basics sales training to ensure franchisees and their staff are following your proven sales process can produce dramatic results. For instance, improving follow up on customer enquiries or paying closer attention to browsing customers.
- Get franchisees to present case studies at regional meetings. Organise franchisees to present their own local sales growth plans to their peers, along with the results they’ve achieved and lessons learned. Allow 10 minutes per presentation and five minutes for questions and feedback from the group. This is likely to increase engagement — and results!
- Ensure your Franchise Advisory Council is solution and growth focused. Many FACs get bogged down focusing on operational problems and gripes. Ensure your FAC’s mission is solution-focused on growing network sales and profits, improving the customer experience, and protecting the competitiveness of the brand.
- Use benchmarking processes to promote a growth mindset. When people are given objective feedback on how their performance compares with others, it stimulates a desire to improve. So when franchisees are provided with access to metrics and charts that display how their business’ KPIs compare against similar businesses, they naturally feel motivated to take action to improve these metrics.
- Select franchisees with a growth mindset. As part of your recruitment process, assess prospective franchisee’s proactivity and motivation to grow their business. For instance, ask them about past projects where they grew sales, or the performance of a team or business unit. Also ask them to describe their goals and growth plans for the franchise.
The spirit of collaboration that generated these tips is what I particularly value about the franchising sector. Thanks to Steve Rafsky for making a special trip to Australia to contribute to this and some other events we organised for the local franchising sector.”
Thanks so much, Greg for compiling these insights and sharing them!
P.S. With Greg’ July 2017 trip around the corner (if you have interest in adding into this, contact me as soon as possible), we are looking at dates for 2018. Let me know if you have interest—I’d love to work on making it happen! Also, we have a limited stock of Greg’s books available and ready to ship from our Boulder, CO office in case you might like to order books for your team.