Franchise Advisory Councils: Pros and Cons
A closer look at the risks and benefits of implementing an FAC
By John Francis, Next Level Franchise, and Eric Stites, CEO and Managing Director, Franchise Business Review
Franchise Advisory Councils (FACs) are a critical franchise business and relationship-building tool: They can build franchisee loyalty and trust, increase support and buy-in to corporate initiatives, and minimize resistance to change. Having an FAC is a well-recognized best practice in franchising, so franchise systems that have FACs are perceived as more progressive and professional, and therefore more attractive to sophisticated franchisees.
What Is a Franchise Advisory Council?
A Franchise Advisory Council (FAC) is a committee of franchisees, organized by the franchisor, to provide feedback to the franchisor on how to improve the system. Effective FACs are interactive groups that provide constructive, structured collaboration between franchisor and franchisees, and serve as the voice of the franchisees to senior management.
If your system is running smoothly – franchisees are profitable and you’re hitting your development goals – you may be wondering if you need an FAC. Conversely, if there are serious issues in your system, you may think giving franchisees a bigger voice is asking for more trouble. So, is it worth the effort? Let’s break down the risks and benefits of implementing an FAC.
The Risks and Benefits of Implementing an FAC
While there may be some perceived risk in implementing an FAC, the fact is that the risks are actually benefits – when viewed through the proper lens.
Risk/Benefit #1: A new standard of accountability to your franchisees.
Once you start actively soliciting feedback on issues from franchisees via the FAC you’ll need to be prepared to address those issues.
It doesn’t mean that you necessarily have to make every change the FAC recommends, but you DO have to acknowledge the issues, discuss possible solutions, and if you decide not to make a change, explain why.
Risk/Benefit #2: Exposing weaknesses in your system.
You may find out that some of the programs, processes, vendors, and staff aren’t viewed as favorably by franchisees as you thought.
While this is a tremendous opportunity to make improvements, it requires a high degree of leadership and integrity for management to be able to respond professionally – especially if a personal weakness is identified.
Risk/Benefit #3: Management priorities may not be the same as franchisee priorities.
What you might view as important issues in the system may not be the same issues franchisees view as important. Be prepared for an eye-opening, and be willing to look at issues from the perspective of your franchisees and adjust priorities as needed.
What About the Cost of an FAC?
The monetary investment for an FAC is relatively low. Budgeting $5,000 per year to cover expenses for meetings, dinners, and possibly some travel expense reimbursement would be a safe bet. However, it can be done for NO cost, too. The real investment is time and talent.
So, Are FACs Worth the Investment?
Yes! FACs are a fundamental structural component of a healthy franchise brand. They are a mechanism for true collaboration for the mutual benefit of franchisor and franchisees, including:
- Building trust
- Providing a forum for meaningful communication and collaboration
- Identifying opportunities for improvement and resolving weaknesses
- Identifying strengths and best practices
Growth is never easy, and it may be uncomfortable at times, but by addressing issues in a professional, transparent manner, you are cultivating a healthy system. If you don’t have an FAC in place, now’s the time to get started. Implementing an FAC doesn’t have to be hard, but it does have to be planned thoughtfully with long-term goals in mind to be effective. In order to reap the benefits of an FAC, franchisors need to understand why, when, and how to build one from the ground up.
Request a Free FAC Workbook
Our Franchising By Design FAC workbook walks you through how to implement an FAC that contributes to the success of your franchisees and the overall performance of your brand. Request your free copy of Building a Franchise Advisory Council that Gets Results for a step-by-step guide to:
- What you need to know before implementing an FAC, including defining goals, setting expectations, identifying FAC members, and communicating the plan.
- Creating the FAC format and agenda, launching, setting ground rules, and managing the process.
- Keeping the FAC on track, making adjustments, and expanding the opportunity and value over time.