Managing Franchise Networks

Why all franchisees are happy, OK or sad

You can’t do it for everyone. You know … the promise of success, fulfilment and money in exchange for a franchise investment? Once you start managing franchise networks you’re into the same plethora of issues that involve running the same business that you had before. As result though this time it’s with franchisees. Usually, but not always franchise networks are bigger and therefore there are more issues.

Whilst Lime is mainly positioned as a company that helps new franchisors to get going we do often end up advising on what we call “network management issues”. Myself, Richard, Kevin and Mike have lived and breathed franchising for a long time. Which means we have many years of experience to draw upon. ┬áSo when you are an established franchisor with a good sized network there’s a useful strategy you can implement to help. By following this strategy you and your franchise team can maximise the opportunity.

The Happy, OK, Sad Graph.

Happy-OK-Sad-Graph Managing Franchise Networks

Let me help you orientate yourself around this graphic. Down the left hand side is the mood of a franchise owner. Along the bottom axis is the length of time the franchisee has been trading. The graph shows a dependance curve which is related to both those factors. So, at the start a franchisee is dependant on the franchisor and happy. At 6 months to a year they start getting a bit sad. Maybe feel that they don’t need the franchisor as much. At 2 years onwards they’ve got it, understand it, are content with the franchise. From that point onwards everyone works together interdependent with each other. The best franchisors know that to be managing franchise networks properly, you need to know the mood amongst the members!

Managing Franchise Networks is not a precise science!

Don’t get too hung up on the timescales or the level of happiness the point to this is simple. The initial excitement leads to the reality that franchising, just like any other business, is hard work. Maybe at the beginning the franchisee believed the survey results that said that 97% of franchisees are profitable. They later realised that it’s probably not a true statistic. Here at Lime we fail to see the credibility of this often quoted figure. Either way, as time moves on they (hopefully) work with their franchisor and end up creating something of value. They value the guidance of the franchisor who has also been happy, OK and sad with the business. But once the feeling of that new romance or new car has wilted they have got to a point where it’s working. They’re making money, they’re happyish. Some are delighted if they’ve got hold of one of the best franchises.

What about Franchisors?

The best franchisors of course have a lot more in the happy camp then the worst franchisors. The opposite is also true. If everyone’s sad then what’s behind that? There’s no smoke without fire, you’ve just got to find out where the fire is and deal with it. Sometimes as a franchisor it’s your job to let a franchisee know that the fire is in their own back garden. Sometimes though the fire is at Franchise HQ!

The most interesting thing about this graph is that it could equally apply to a franchisor. You start off franchising, you’re happy and going great. After a bit of time network management issues creep in, you get a bit sadder as a franchisor. Maybe you misjudged what was needed to get the franchisees into profit? After time though you’re ok with it. You’ve met the needs of the network and the business stacks up for you and them.

Self employment outside of the franchise industry is a roller coaster too but that’s another topic entirely.

Speak to a Lime professional in your own area today for practical guidance on franchisee and franchisor issues. Or call us on 01274 662001

 

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