Falling on a banana skin
Published August 31, 2021

Experts Share 20 Franchise Operations Missteps That Hurt Your Brand

Suppliers weigh in on the biggest mistakes that can sabotage a brand’s success

Franchisors and their executive teams eat, breathe and live in their brand. While franchisors have a deep understanding of one brand, suppliers in the franchise space have the unique perspective of working with multiple brands to understand common challenges and collect best practices. As an outside set of eyes, they have an unbiased view of those cringe-worthy practices that are holding franchisors back. 

We reached out to some of our fellow suppliers to ask them about the biggest operations mistakes they want franchisors to know about – and they had a lot to say. Most of it falls into a few large categories: training and support, franchisee relations, and field visits.

Read on to see what bothers them most: 

1. Goldilocks approach to initial training (too little or too much)

Franchisors either provide too little initial training because they are afraid they won’t see a franchise that requires a long training period and that launches franchisees who are ill-equipped and can make fatal stumbles in grand openings. On the other side, they try to cram everything into initial training. Give the franchisees what they need in the first 90 days of operation because that’s all adults retain. And always provide significant time to training on the economics of the business model so they work smart and better understand all that you ask of them.
– Mary Ann O’Connell, FranWise

2. Underspending on support 

Franchise support makes money for the franchise system. By helping franchisees be more successful and growing business, the additional royalties more than cover in most cases the investment and the staff and support needed for franchise support. It’s easy to do a break-even analysis, understand how much impact franchise support needs to generate in increased income to cover its investment. Most franchise systems underspend on support, miss income opportunities, create dissatisfied franchisees and cause franchisees to go out of business.
– Evan Hackel, Ingage Consulting

3. Thinking one size fits all 

Too often, franchisees feel they aren’t supported once they’re open and rolling. Or, the support provided isn’t a good fit for their changing needs. Actively engage with your franchisees through ongoing dialogue and surveys. Owners of different vintages, backgrounds, skills and in different markets will need different things. Yet too many franchisors take a one-size-fits-all approach to franchisee support. Or, franchisors may have an oddly disconnected view of their own support efficacy. This irritates busy franchisees and makes them doubt some of the value they receive for royalties and fees.
– Alicia Miller, Catalyst Insight Group

4. Mistaking more communication for meaningful communication

One practice I frequently see that goes badly is communications. Communication is a two-way process where both parties need to be fully engaged. Often franchisors think by bombarding franchisees with information, they are communicating with them. Meaningful communication involves opportunities for franchisees to ask questions, and give feedback on what they are hearing or seeing. This can be done effectively in virtual meetings using the chat function and break out groups, where franchisees have a brief discussion on what they have just been told, consolidate their thoughts and feed these back to the franchisor team. Obviously this can also be done in face to face meetings using facilitated discussions. I advise against Town Hall meetings where you give a microphone to the loudest person as these can turn negative. There are more elegant solutions to ensure two-way discussions stay constructive. If franchisees are complaining they are not feeling communicated with, and you believe you are communicating well with them, revisit your processes. You will probably find there is way too much one way dissemination of information, and not enough genuine two-way interaction.
– Greg Nathan, Franchise Relationships Institute

5. Implementing change without a well-defined strategy 

One of the worst things I see is when franchisors introduce change into their franchise system without having done a proper job on strategy, development, testing and communication around whatever the initiative is. I would say that a large percentage of franchisors have a poor track record when it comes to innovation and change facilitation. Once a franchisor does a poor job developing and implementing one or two major initiatives, their credibility with the franchisee community may be irreparably damaged. In order to avoid these pitfalls, the franchisor should educate themselves on what a good innovation process looks like, and network with other franchisors who have successfully implemented change within their systems. The franchisor should also consider what involvement franchisees should have in order to build a change process that they will respect and support.
– Dave Hood, iFranchise Group

6. Only listening to the loudest franchisees

Franchise management think they really understand what the franchisees are thinking and feeling. The fact is, franchise management typically hears only from franchisees that are extremely happy or extremely upset. That polarization does not give franchise management a holistic view, which is why surveying franchisees is so important.If management does not ask and communicate often, how will it ever know what is happening?
– Evan Hackel,
Ingage Consulting

7. Neglecting to acknowledge feedback

Make sure your support team is collecting feedback and you broadly communicate back to the entire franchisee community and corporate team what you’re doing with that feedback. Franchisees want to be heard. Even if you don’t agree or can’t accommodate a particular request – make sure you’re openly discussing it so they understand your reasons. This will help create a strong, collaborative culture of mutual listening.
– Alicia Miller – Catalyst Insight Group

8. Not connecting the dots between franchisees’ business and personal goals

One of the biggest mistakes many franchisors make is not requiring their franchisees to have their own vision. When you look at the top performing franchisees within any system, it’s not the brand’s vision, prior work experience, or specialized skills that sets them apart, but rather, a clear, personalized vision for their business and what they want to get out of it over time. Yet, rarely do franchisors require franchisees to formally create a plan for capturing, sharing, and linking personal goals to business goals. When franchisors clearly connect the dots for franchisees, and then coach them effectively, system-wide performance will skyrocket. Implementing a franchisee vision plan program is the most effective way to set expectations and align franchisees’ goals with the goals of the organization. It does take some effort, but the results are well worth it.
– Eric Stites, Franchise Business Review

9. Trying to fix everything

Listening is key to all relationships and franchising is not an exception. Really listen to your franchisees for subtext and stop trying to fix everything. When the communication and trust are established, the fixes will happen. When anyone, including a franchisee, feels heard, they relax; listen and are more receptive to feedback and changes. They will listen to you if you listen to them. Even when they are sad, any and scared – especially then.
– Mary Ann O’Connell, FranWise

10. Cookie-cutter approach to franchisee relations

One mistake I see is treating all franchisees the same and offering ‘cookie cutter’ solutions. Every franchisee is at a different stage in their journey, and has a different set of strengths and weaknesses. While franchisors need to be consistent in delivering their basic legal and commercial obligations, they need to have a degree of flexibility in what and how they deliver operational support to each franchisee. It is also a useful strategy to map each franchisee onto a model according to meaningful criteria, that goes beyond basic KPIs. This should be revisited every year by the operations team. For instance, our models of the Franchise E-Factor and the Franchisee Business Journey are sometimes used by franchisors to map the stage of the franchise relationship that each franchisee is at, or where they are in the development of their business.
– Greg Nathan, Franchise Relationships Institute

11. Overlooking the human factor

Every franchise brand has high performers, low performers and that large group of in-betweeners. To help that middle group, franchisors offer the same advice: “Stick to the system.” It makes sense, especially when the system has been proven to work. But sticking to the system isn’t enough. Franchisees can let fear stop them from expanding and still be compliant. They can hire warm bodies who provide forgettable, but inoffensive service and still adhere to brand standards. They can run their business without collaborating with fellow franchisees and still operate under the terms of the franchise agreement. Systems are only as good as the people who implement them. That’s why two franchisees can do the same thing, but get different results. To operate at a higher level, they need to think, lead, and serve at a higher level. They need to manage the human factors impacting their execution. Franchisors can help by not only developing great operational systems, but better human support systems, as well.
– Scott Greenberg, Speaker & Author of
The Wealthy Franchisee

12. Forgetting to differentiate

Tier your support by experience-level, market and vintage. New owners might want more training on the basics. Experienced owners on their second or third renewal might prefer advice on debt structuring, or new market acquisitions. Finance or accounting experts might appreciate occasional coaching on digital marketing, and vice versa. New markets will need help breaking through and creating brand traction.
– Alicia Miller, Catalyst Insight Group

13. Failing to lead by example

One of the biggest mistakes I see within existing franchisors is that their executives do not lead by example in terms of fostering positive franchise relations. Their franchise recruitment materials emphasize the high level of support they provide, and they select themes for their conferences around unity and teamwork. But in some franchise systems, corporate leaders will often speak negatively about various franchise owners in the system. And they’ll do that in the presence of other employees among the support staff. And when staff sees that approach from their leadership, they are likely to develop a similar attitude toward the franchise network. It’s critical for the brand owner and senior leaders to set and maintain a positive tone within their office.
– Dave Hood, iFranchise Group

14. Giving up on the fundamentals

I see franchise systems continuously trying to provide new and improved systems to franchisees based on their latest requests. I think the better approach is to make sure franchisees are using all the materials already available to the fullest extent possible, before you develop new and improved programs. I call this the “franchisor’s dilemma”, and it never seems to go away, which is to get franchisees to fully utilize the programs and systems and training and support that’s already available. It seems that often operations are evolving and changing and so many new programs are requested. When in fact the existing programs are likely more than adequate just underutilized. I am all for innovation and improvement, only after the fundamentals have been fully executed and utilized.
– John Francis, Next Level Franchise.

15. Inadequate training for operations staff

The biggest operational mistake we see from franchisors is the inadequacy of the training and ongoing coaching for their field team (franchise business coaches, field managers, area reps..). The number one driver of franchise company growth is profitable franchisees, which, in my opinion, makes franchisee support one of, if not the most critical role in the franchise system. Not only do franchise business coaches need to have the right DNA to be successful in their role, they need the right initial training and ongoing coaching to overcome the challenges they face so they can help franchisees optimize their profitability. This ongoing coaching should come in the form of leadership development and the refining of the FBC’s soft skills so they can master conflict resolution, active listening, empathy, how to create buy-in, etc. The initial and ongoing coaching for FBC’s can come in the form of one-on-one coaching, peer collaboration, or bringing in outside experts to facilitate workshops.
– Angela Cote, AC Inc.

16. Setting up for failure

A common knock on franchise support teams is that they’ve often never run a business themselves. The best franchisors hire people with real field and operating experience, especially if there aren’t any corporate units to enable operational skill-building rotations.
– Alicia Miller, Catalyst Insight Group

17. Treating field visits as an audit

The biggest mistake we see franchisors make is viewing their field audits as an obligation rather than an incredibly useful tool to help improve their brand’s performance. Oftentimes franchisors focus their questionnaires on things that just ‘check the box’ rather than what aligns with their strategic goals and are business-drivers. An example we often see in restaurants, for instance, is field audits overly focused on food safety. Food safety is incredibly important, of course, but there’s a missed opportunity to include more questions that impact performance. If a brand is putting significant resources behind an initiative, such as online ordering, the field audit should be a tool to help ensure teams on the ground are effectively implementing the initiative. We also see franchisors using the same field audit questionnaire for years. They really should be reviewing the questionnaire annually and updating it as needed to reflect any changes in strategy and goals.
– Jason Kealey, FranConnect

18. Missing opportunities to develop brand ambassadors

What irritates me the most when it comes to franchise operations practices is when franchisors fail to offer proper coaching to their franchisees. The number one driver of franchise company growth is profitable franchisees who become ambassadors of the brand and the franchise opportunity, yet franchisors often feel that a ‘hotline’ or ‘they have our number’ approach is enough. Proper franchisee coaching for success involves creating buy-in to the coaching, a mutual accountability to growth, and a proper framework to deliver the coaching. Yes, actively coaching franchisees requires a lot of resources, but since profitable franchisees drives franchise company growth, shouldn’t it be a no-brainer to do what it takes to help franchisees with profitability?

As a franchisee, it was a waste of time when my franchise business coach came to my stores and told me my light bulb needed to be replaced, or would phone and run through a list of updates that could have been sent in an email. What was valuable was when our FBC came to our stores with a partnership approach, ready to share new initiatives other profitable franchisees were doing in their markets, and to soundboard or co-evaluate ideas and opportunities I had come up with.
– Angela Cote, AC Inc.

19. Underestimating the role of culture

Leaders tend to focus on operations when evaluating KPIs and ROI, the people factor is just as, if not more, important than other aspects of the business. What we have seen in our research is that culture is a key factor in a brand’s success. There’s a bigger gap than ever between brands with positive cultures and those at the bottom in terms of satisfaction. Brands that rated highest on the “Leadership encourages a strong team culture” question scored 20% – 25% higher in Overall Satisfaction, which translates directly into higher franchisee performance.
– Eric Stites, Franchise Business Review

20. Not hiring outside expertise 

The biggest issue is franchisors assuming their job is to teach franchisees to be business people when their contractual duty is to teach business people how to operate the brand as defined in Item 1 of their FDD. Though I understand the reasoning behind the overreach, it’s what started and compounds the industry’s issues with joint employment and vicarious liability. They can still help and add value, but it’s best done through well vetted third party sources. Value isn’t established because a franchisor slapped the brand on it; it’s determined by the perceived outcomes for the franchisees. Reach out to experts in the basic services and use all your resources to deeper into brand education and application.
– Mary Ann O’Connell, FranWise

 

Are any of these operations pet peeves holding you back?

Now that you know some of the most common missteps, you can identify and prioritize opportunities within your system to be a stronger franchisor. You’ll find more tips and information from suppliers in our free eBook, 5 Operations Pitfalls That Are Stunting Your Franchise Growth.

FBR has worked with over 1,100 franchise brands to help them understand how measuring franchisee satisfaction improve performance. If you would like to request a demo for your operations team to learn more about how to capture and act on the franchisee experience to boost performance at the unit level and drive ROI, click here.


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About the Author: Michelle Rowan

Michelle is the president of FBR, chair of the International Franchise Association Women's Franchise Committee, and a Certified Franchise Executive. She has facilitated CEO Performance Groups and Executive Networking Groups and is also a mentor of UNH college students. When she is not at work she is usually reading, playing outside, or hanging out with her husband and daughter.
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