Published July 7, 2015

The Most Important Franchise Operations Tool You May Not Be Using

In June 2015, over 100 franchisors learned how to run their brand more successfully via Franchise Business Review’s 2015 Ops Webinar Series. They benefitted from the insight of 15 respected franchise industry leaders who shared their experiences, expertise, and favorite resources during five online sessions.

Throughout the series, one idea that kept coming up regardless of the session topic was that Franchisee Performance Groups are vital to keeping franchisees engaged, profitable, and validating well. Even the most focused, well-intentioned franchisee can get off track. The inherent pressure and competitiveness spurred by Franchisee Performance Groups kicks franchisees’ performance into high gear.

Since Franchisee Performance Groups are clearly beneficial to franchise systems, we were astounded to find out how few franchisors have one in place when we conducted an interactive poll during our Franchisee Performance session. Over 50% of the franchisors participating in our Ops Series, who are from a variety of brands varying in size and industry, said some sort of performance group for franchisees exists at their company. The rest (just under half), therefore, do not have one.

 

How to Put a Franchisee Performance Group In Place

Below is advice regarding how to get a Franchisee Performance Group going from our Ops series panelists and CEO of Franchise Business Review, Eric Stites:

  • Decide whether you have the resources in-house to create a strong program, or if you’re better off utilizing a third-party.
  • Ask your franchisee advisory council to help develop your performance group program. If you don’t have an FAC, simply ask six franchisees to volunteer to be the first group.
  • The most effective performance groups are often on the smaller side (six to eight people). Franchisees should be grouped with such similar franchisees considering such factors as business size, tenure, geography, single-unit versus multi-unit, etc.
  • Start with groups being led by a corporate executive or a professional facilitator and migrate to franchisee-led after the first year.
  • Group meetings can vary in length and frequency. Some of the best we’ve seen meet quarterly for a full day with some sort of social activity on either end. Meetings can be hosted by a franchisee to reduce costs, and the meeting host should be rotated.
  • Meetings should all have a formal agenda and include a full review of KPIs, financial statements and current challenges. Meetings should conclude with stated objectives, which will be reviewed at the beginning of the next meeting.

 

Franchisee Performance Group Resources

If you would like help getting a Franchisee Performance Group up and running, two of our Ops Series panelists can provide it:

  • For a performance group focused specifically on financial performance, Rod Bristol of Profit Mastery has spent years developing a curriculum with proven results. Profit Mastery sets up franchisee groups and facilitates for the first year, then hands over the reins to the franchisor. See more at http://www.brs-seattle.com/pmu
  • Franchise expert John Francis offers his own three-phase, 90-day process to organize and establish franchisee performance groups. John uses his vast experience as franchisee, franchisor, consultant, IFA board member, and keynote speaker to help clients develop the right programs for their system. Learn more about John at www.johnwfrancis.com.

The benefits of rolling out Franchisee Performance Groups across your system will quickly be evident. It’s a good idea to start with a core program make adjustments  and enhancements along the way. Once the program is in place, encourage new franchisees to join immediately upon opening. This will help ensure they benefit from peer accountability from the start.

About the Author: Ali Forman

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As the Marketing Director, Ali’s role is to educate franchise companies about and inspire them to participate in FBR’s research in order to grow and improve their brands. Ali lives in Maine with her husband and two sons.
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