As a franchisor, you want your franchisees to succeed and grow your brand. But what if some of them are not meeting your sales expectations? How can you manage this situation without damaging the relationship or the reputation of your franchise? Here are some tips to help you deal with underperforming franchisees effectively and constructively.
Before you take any action, you need to understand why your franchisees are not meeting their sales goals. Is it due to external factors, such as market conditions, competition, or customer preferences? Or is it due to internal factors, such as poor management, low quality, or lack of training? You can use various tools, such as sales reports, customer feedback, and site visits, to gather data and analyze the performance of your franchisees. You should also communicate with them regularly and listen to their challenges and concerns.
The word “manage” can be replaced by “support” to start with. Franchised systems thrive on a partnership of aligned conviction to make a brand successful. This is a case of understanding if the gap is a result of “skill” or “will”. Once the franchisor figures out whether it’s skill or will or a combination of the two, actions to drive improvements would then be meaningful.
There are a lot of great insights offered on this thread, but the most important point is that you do not manage franchisees. They are not employees, they are business partners. As such, they want to be inspired, not lectured - especially not by someone who has a regular paycheck coming in from the franchisor. However, you can successfully lead and influence franchisees by establishing the appropriate standards for successful operations, and then modelling the behaviors that support those standards. If you want your franchisees to grow, you need to foster a growth culture. It needs to be a part of your organizations DNA, and there should be special emphasis on this during the discovery process, so franchisees clearly understand their role.
The franchisor/franchise operator model is not an employer/employee model. The franchisor cannot "manage" franchise operators not meeting sales goals -- whose goals were they in the first place? Franchise operators, especially multi-unit operators, are free to set their own sales goals. The franchisor benefits from over achieving franchise operators because their royalty is based on gross sales. Some franchised systems like automobile dealerships do set up networking groups to help the franchise operator sell better. But, this is not a mandate of the franchisor. The franchisor's FDD will not speak of a contractual element which requires the franchisor to coach the franchise operator on sales.
Effective turnaround strategies for underperforming franchisees begin by securing commitment to improvement. It's crucial for the franchisee to acknowledge their performance issues. The process involves analyzing objective data like reports and P&Ls, setting KPIs related to sales processes, and focusing on 1-3 KPIs for gradual improvement. Regular meetings should be set to monitor progress and ensure accountability. Start with frequent meetings, then decrease as the owner gains confidence and include their team in the process. As improvements are seen, the owner can transition to less frequent meetings and share their success with others and include their team. Celebrating small wins is essential throughout this journey.
Se o seu Franqueado n?o entrega o resultado na verdade me parece que a culpa é sua, do Franqueador. Um erro na homologa??o do seu negócio a um empreendedor que n?o possuía fit me parece ser um ato de irresponsabilidade. Partindo desta premissa, antes de criticar, amea?ar, for?ar planos de a??o TOP DOWN, analise se a causa raiz da n?o produtividade foi um erro SEU.
One of the reasons why franchisees may not meet their sales goals is that they are not clear about what you expect from them and what standards they need to follow. As a franchisor, you should provide them with a detailed franchise agreement, a comprehensive operations manual, and a consistent brand identity. You should also establish specific and measurable sales targets, as well as key performance indicators (KPIs) that reflect your brand values and customer satisfaction. You should communicate these expectations and standards clearly and frequently to your franchisees and monitor their compliance.
The best franchises create a monthly performance plan and help their franchise owners follow it. They check in on their owners, they support them through obstacles along the way, and they are actively engaged in the results of all of it. Many franchises, don't do this. But the ones that do, tend to build more clear launches and progressions for the franchise owners - unit-level economics. People will surprise you if you help them see the goal, stay focused on it, and show them it's possible FOR THEM. Let them delight you. If you set them up with some basics and follow through, the power in them - will show up to perform.
Franchisees failing to meet sales goals can stem from unclear expectations and standards. As a franchisor, furnishing a detailed franchise agreement, comprehensive operations manual, and consistent brand identity is paramount. Setting specific, measurable sales targets aligned with brand values and customer satisfaction, alongside key performance indicators (KPIs), is essential. Clear, frequent communication of these expectations, coupled with diligent monitoring to ensure compliance. By providing a framework that elucidates objectives and guidelines while consistently reinforcing brand essence, franchisors empower franchisees to align efforts effectively and enhance their sales performance within the franchise network.
You can't measure what has not been quantified. Franchisee's target sales would have been captured in a comprehensive territory franchise business plan, backed by a well-executed market research that most franchisors would have requested at the franchisee selection stage. While a comprehensive operations manual and the franchise agreement guide franchisees on how to achieve success through following the franchisor standards, regular questioning of the assumptions on which the franchisee sales targets were based will reveal what has changed in the market and help clear out the expectations, thereby aligning the parties. But the bottom line remains that franchisees who constantly achieve pre-agreed territory targets enhance brand equity.
As a franchisee, you should remind yourself periodically about the reasons that you invested your hard-earned monies into your new franchise. Surely, one of the main reasons was that it was a proven business model with a track record of successful corporate and franchise locations. So, what you invested in was a roadmap to success in your location. It is the Franchisor’s responsibility to guide, and train, you to have similar results. These have to be clearly defined by way of a comprehensive Operations Manual and regular follow-up contacts and training to help you to hone the required skills and to minimize the effects of any weaknesses. In a nutshell, there is no room for a “them and us”. Both parties are partners with the same goals!
Be clear about your expectations and ensure the franchisees plan aligns with those expectations. Check in on a regular cadence to measure progress and be clear on accountability.
Another way to help your franchisees improve their sales performance is to offer them support and guidance. As a franchisor, you have the experience and expertise to share with your franchisees and help them overcome their difficulties. You can provide them with various forms of support, such as training, coaching, marketing, technology, and financing. You can also create a network of franchisees who can exchange best practices, tips, and advice. You should also encourage your franchisees to seek your feedback and suggestions and be open and responsive to their questions and requests.
Provide trainer/mentors that can support hands on for a set period of time. This provides support and visibility that can accelerate success or provide a clear path to accountability.
Supporting franchisees to enhance sales performance involves leveraging franchisor expertise. Offering diverse support avenues like training, coaching, marketing assistance, technological aid, and financial guidance is pivotal. Establishing a network among franchisees fosters an exchange of best practices, tips, and advice. Encouraging franchisees to actively seek feedback, suggestions, and fostering an open, responsive environment for addressing their queries and requests is crucial. By amalgamating the franchisor's know-how with a collaborative learning ecosystem, franchisees gain access to a wealth of resources and guidance, equipping them to navigate challenges and optimize sales performance within the franchise framework.
That define you as a leader. More than a manager you should be seen as a Leader / Mentor and a solution man / motivator in the game. The speed of your connect defines the speed of outcome. This will ease the understanding of the team and one can suggest actions accordingly
Providing support and guidance during difficult times will always go further than blaming. Particularly when external factors are at the root cause, support could look like weathering the storm together. Often times there is something that can be done at the Franchisor level that reduces costs or other stresses during difficult financial times. I saw this come to life during the pandemic. Where crisis like collaboration and support can protect profit and drive innovation through times of uncertainty.
For one, don't hammer on underperforming franchisees. While some people react positively to pressure, most folks don't. Coach them. And tell them you're on their side and that you'll do whatever it takes to help them succeed.
If your franchisees are still not meeting their sales goals after you have identified the root cause, set clear expectations and standards, and provided support and guidance, you may need to implement corrective actions and incentives. Corrective actions are steps that you take to enforce your franchise agreement and protect your brand reputation. They may include warnings, penalties, audits, or termination. Incentives are rewards that you offer to motivate your franchisees and recognize their achievements. They may include recognition, bonuses, discounts, or opportunities. You should use corrective actions and incentives carefully and fairly, and always in accordance with your franchise agreement.
When franchisees persistently fall short of sales goals despite root cause analysis, clarity in expectations, and extensive support, implementing corrective actions and incentives becomes necessary. Corrective actions encompass measures to uphold the franchise agreement and safeguard brand reputation, ranging from warnings, penalties, audits to termination if warranted. In contrast, incentives serve as motivational rewards acknowledging franchisee achievements, encompassing recognition, bonuses, discounts, or additional opportunities.
Corrective actions and incentives are necessary and are defined in the franchise agreement, but some need to be implemented collaboratively. The worst thing would be a franchisee who sees the franchisor's actions as 'policing'. The franchisor's persuasion skills are called upon here to avoid being seen as 'policing' but more importantly, their assertiveness will navigate the course more successfully.
Finally, you should always aim to maintain a positive relationship with your franchisees, even if they are not meeting their sales goals. A positive relationship is based on trust, respect, and communication. You should treat your franchisees as partners, not as employees or competitors. You should acknowledge their efforts, appreciate their contributions, and celebrate their successes. You should also be transparent, honest, and constructive in your feedback and criticism. You should also be flexible, empathetic, and collaborative in your problem-solving and decision-making.
Treating even the most difficult of people with respect and even adoration can cause them to show up differently. That requires swallowing your ego & seeing the good in that person, no matter how difficult they are. You can always find good in them. Find it, call it out, & then remind them of it. When you do that, you give them the space to be stronger & less controlled by fear. I often say, the most difficult people to love are the ones that need it the most. This absolutely applies to business. The "easy to love" are easy to get performing. The challenging ones are the ones that need someone to believe in them. That toughness redirected can result in the most epic turn-around. Check #radicalcandor for a great resource on how.
Franchisee and Franchisor relationship thrives on Mutual support and coherent actions. Franchisee performance depends on host of factors and there is no one solution fits all approach.The recommended approach towards Franchisee operations management is based on following pillars 1. Data Availability and accuracy: Customer,market,competition, Franchisee 2.Goal setting for Mutual expectation management 3.Performance Management and Risk Monitoring: Regular tracking of performance and channel health 4.Engagement and Relationship Management 5.Market visits to proliferate best practices,observe gaps and ensure course correction 6.Regular training of Internal and external Channel staff for capability building
The importance of positive relationships and "relationship equity" in franchising cannot be emphasized enough! As a zor, the onus is on you to maintain and strengthen that relationship equity. When the stakes are high- as is often the case when people invest considerable amounts of their net worth into a franchise- emotions can be wild. As the zor, you have to recognize this and be level headed as well as empathetic even if the zee is not. When hard times/ conversations arise, it can either create an opportunity to build on the relationship equity or quickly dissolve the relationship equity depending on your reactions but once the relationship equity starts to dissolve, it can be near impossible to rebuild.
Yes the positive relations comes from engagement and the space you give to your peers and subordinates. This impacts the speed and your connect with the customers. People around you look forward for the instant favourable solutions.
I am a fan of mentorship programs. Pairing struggling franchisees with more successful ones in similar markets for mentorship can be highly effective. This approach ensures that the mentors have practical insights and strategies that are not only proven to work within the same franchise system but are also specifically relevant to the market conditions and customer demographics that the mentee is dealing with. This guidance can be invaluable in helping underperforming franchisees improve their sales and overall business performance.
Monitor the franchisee sales trends to identify sales decline by day part category. Work with the Franchisee staff and put a corrected action plan In place. Monitor performance weekly
Performance of all franchisees may never be the same as there are several parameters upon which the outcome is dependent. As a franchise manager, a person must assess the skills required by the people being appointed by the franchisee to handle customers. There must be enough stock of the products so as to avoid loss of sales. Working capital must be reviewed to see any siphoning out. Assess the competition in the area for any of their new offers. Assess our own offering as per the target audience requirement. Reassess the suitability of the location for adequate foot fall. Assess the promotions being done. Efficiency of Follow ups if required.
When addressing franchisees not hitting sales goals, it's important to understand who is setting the sales goals. As strange as it sounds some franchisees will reach a comfort point where the effort needed to increase sales doesn't align with their lifestyle goals. If they are meeting minimum royalty thresholds and in compliance with their franchise agreement, it can be very challenging to overcome this since they are independent business owners. This is one reason why creating properly sized territories from the beginning and communicating performance expectations throughout the discovery process is so critical.