FRANCHISE: Managing a franchise system efficiently

Although it has barely taken root in East Africa, franchising, as a business model, is a world phenomenon. We continue discussing how franchisors and franchisees manage and contribute to the management of a franchise system.

Thirteenth, a robust communication system. The relationship between the franchisor and franchisee is always a delicate one. Just like in marriage relationships, a system that facilitates a continuing and open dialogue with the franchisees is the key and often the difference between success and failure. The franchisor must in the interest of the system, endeavour to strike a fair balance between policing a franchisee’s behavior to protect their own interest and partnering with a franchisee to improve the franchise-wide operation.

Open lines of communication, literally as well as figuratively, can help both the franchisor and franchisee to be aware of each other’s situations. The franchisor ensures the effectiveness of communication with the franchisee using methods such as newsletters, memos, emails, phone calls, personal visits by management and personal visits by a franchisor representative. A successful franchisor believes in recognition and in a strong personal rapport with each franchisee. The franchisor must also acknowledge that there is equity in the relationship. On this basis the franchisor must ensure a regular feedback from the franchisees concerning the franchise system’s products, innovations, marketing communications and trends, competitive activity etc.

Fourteenth, the Field Advisor. To strengthen regular, ongoing and informal communications with franchisees, the franchisor appoints field advisers to visit franchisees on a regular basis or when required to do so by the franchisor. Their role and interpersonal skills is the key element to the informal communications system in the franchise relationship. Their accurate and clear reporting is also essential to ensure the level of conflict between franchisor and franchisee remains healthy.

Five roles of field advisors include relating-being a “middleman” between franchisor and franchisee, communicating information back and forth. Advising-providing objective, expert advice on business, marketing or operational issues. Coaching-encouraging franchisees to achieve higher levels of performance and assisting them to get through motivational blocks. Training-upgrading the knowledge and skills of franchisees and inspecting-ensuring standards are maintained.

Knowing their importance, the selection criteria for Field advisers must be strict.

Fifteenth, the Franchisee Advisory Council. This is a franchisee representative body set up by the franchisor to promote communications and creativity with the franchisees. The council acts strictly in an advisory capacity and meets with the franchisor on a quarterly, six-monthly or more regularly to discuss matters affecting the franchise system. The major purpose of the franchisee advisory council is to ensure an effective interactive communication system between the franchisor and the franchisees.

Franchisees are in the front line of the franchise business and experience the effects of decisions made by the franchisor.

The writer is a Franchise Consultant helping indigenous East African brands to franchise, multinational franchise brands to settle in East Africa and governments to create a franchise-friendly business environment.

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