August 23 2019

Maximising your franchisee relationships

Franchise relationships

By Brett Houldin

There has been plenty of interest on the franchising industry over the past two years including the 2018 Senate Inquiry and subsequent media attention and as a result, I am sure there will be continued scrutiny and media attention over the coming year. Whilst at the time of writing this the findings are yet to be released, there will certainly be more franchisors are required to do, to enhance the relationship with its franchisees.

Whilst there have been recent high-profile failures, the industry is very large and successfully built on strong franchise platforms with aligned interests between franchisee and franchisor.

Over the past five years, we have worked hard to position Craveable as best in class franchisor with leading brands, primarily focused on our franchisee relationships and ensuring we are bringing a wealth of expertise to the table.

Rather than ‘franchisees’, I look at our industry as one built on thousands of small business owners that partner with franchisors to enable them to reach a potential they couldn’t have reached alone. The expectation from a small business owner when joining a franchise network is that the franchisor is bringing skills and expertise to the relationship that they personally don’t have, enabling them to maximize their return on investment.

The requirement then should be for a franchisor to have a robust infrastructure that supports franchisees manage risk and help drive growth. Types of infrastructure would include expertise that a franchisee wouldn’t be able to source themselves such as; induction and ongoing training, systems and technology, operational procedures, property management, marketing and supply chain. The more robust this is the better chance of attracting and retaining quality franchisees to grow the system and obtain scale in the market.

Craveable has invested heavily into building strong infrastructure over the past five years to enhance the way it supports its restaurants, enabling its franchisees to focus on delivering positive customer experiences. Standardizing and optimizing the technology in restaurants has unlocked efficiencies and allowed digital solutions to be added that further improved marketing effectiveness.

Whilst change is constant and increasing,  in franchising it can sometimes be harder to deliver new initiatives whilst keeping all stakeholders aligned with the components needed to be successful. We have learnt over the past few years that over investing in franchisee communication to be critically necessary.

Successful Digital Roadmap

As more traditional industries are being disrupted by digitisation, the challenge is how prepared are you for it happening to your business, or, how you will invest to grow through channel expansion or relevant adjacencies. Craveable has tackled this head-on with early adoption of digital and home delivery, where it is one of the leading QSR delivery brands nationwide.

The integration between digital marketing, digital products and the in-store experience has become an expectation of consumers across all retail segments. The changing spend from traditional media channels to digital marketing makes it tailored and more cost-effective however possibly less visible to a blanket audience. Taking your franchisees through your strategy and mapping out the journey is critically important given the custody over the advertising funds.

Additionally, a big theme currently is data and how this can be used to either drive growth or improve efficiencies, specifically in marketing investment. The QSR industry services many customers however many brands don’t know a lot about them. At Craveable, we serve over 1 million customers per week and over the past few years have invested heavily in capturing more information about these customers. This enables us to build better campaigns that talk directly to our customers and help franchisees drive frequency and spend.

If you are unable to invest directly in data capturing initiatives, by partnering with the right providers you can still get real-time information to capture insights and make better decisions.

It is an expectation today that any quality franchisor can leverage the many data points available in the market for the benefit of the whole network. At Craveable, we implemented a loyalty program in 2015 to better understand the behaviours of our customers and leverage the data to drive frequency into the store and through delivery for our franchisees. The benefits of this have been incremental visits and spend per visit.

Franchisee Engagement

It’s easy to say but unless you have a robust structure in place to support franchisees, franchisee engagement could be challenging.

One of the ways Craveable looks to support franchisees is with a strong Franchisee Advisory Council, nominated by other franchisees, that allows for feedback to flow and new ideas to form. Meetings are held regularly alongside state meetings, town halls and smaller regional meetings.

An open dialogue with all franchisees of what’s working and what isn’t is absolutely critical, we haven’t always got that right, but, through the implementation of new tools and systems, a strong communication platform now exists. Monitoring performance and benchmarking for the benefit of all stakeholders has worked well and will continue to evolve.

All functional areas and departments need to participate in the business partnership with franchisees, empowerment to make appropriate decisions by those who have access to franchisees helps establish trust. For Craveable, our Business Consultants and operations teams work closely with franchisees on a weekly basis to deliver best practice and growth initiatives.

Governance Framework

Whilst there is a need to be agile and move with or ahead of the market, there isn’t room as a network to have some parts not working whilst others are. Having a governance framework in place to manage priorities is important and should include a formalised approval processes, complaints handling, crisis management and risk committees.

Finding the right balance between fast pace growth and implementing too many steps to get things done is a business by business decision depending on its maturity and scale.

For Craveable, food safety, employee safety and employee relations are all extremely important components of the business monitoring framework. These topics and associated actions are therefore very high up on our priority list and governed closely with franchisees. Every industry is different but knowing what the most important areas of risk to manage is the first step.

In the past few years, Craveable has implemented a range of business processes and systems to assist franchisees to manage their employee relations requirements. This has included a standardised rostering and time and attendance system, training programs, whistleblower hotline, reporting and benchmarking.

For an additional level of comfort, Craveable has an external auditing program for employee relations that has completed audits across the entire network. This level of risk management is necessary due to the complexity of labour laws and the introduction of the Vulnerable Workers Act in 2017 but aimed to support both franchisee and franchisor.

Talent is Critical

For customers, they want consistency in product or service when they visit a franchise business, most the time if this isn’t in place it comes down to the people involved. When you get a chance to bring in someone new to your business, it’s the best opportunity to make sure you get it right!

To attract top talent into your network or organisation you need to have a strong value proposition and clearly articulated values and behaviours to demonstrate it.

Franchisees want to work with other great franchisees and get inspired by the people who support them in the franchisor. Given the breadth of the industries franchising covers, there is top talent with broad skillsets, but you need to be able to attract them to your business.

Craveable believes in values-led decision making and has published its four values to its network to ensure alignment an consistency of service. These including; being customer fanatics, making a difference, open and honest and we win together.