#FLAsia2010 Special 3: A few non-negotiables for franchisees

22 10 2010

If you are a Franchisor or, indeed, an intending Franchisee, there are a few things you need to know about franchisees. The promise of franchising is sometimes stated such that it sounds like “anyone can be a success as a [insert product or service here] franchisee!” It just ain’t so…

A particular franchise may have special requirements, but here are some pretty universal ones:

a) a funadamental belief that there is one right way of doing things and that is the way we do it. The person who is happy to be situational or to keep returning to the blank sheet of paper or run a different business on Wednesday from the one they ran on Monday may be all kinds of things – but a successful franchisee won’t be one of them. Business format franchising is a “one right way”  business model, and if your prospective franchisee can’t handle that, stay clear.

b) High energy levels. Real franchises don’t promise great returns for no work; they promise predictable returns for hard work. The franchisee who needs lots of down time for reflection and recovery will struggle to make a success of the business.

c) Attention to detail. Big picture players need not apply; the big picture has already been dealt with by the franchisor. What a franchisee needs is to execute the plan with fanatical attention to detail.

d) Attention to the numbers. Many people run their businesses by instinct. This doesn’t work for franchises: a proper franchise model includes clear financial performance indicators and the franchisee needs to pay constant attention to actual performance against these standards; only by reacting at the first sign of divergence in the numbers can the franchisee and their business succeed.

e) Attention to people. Franchisees mostly have to manage staff; they all have to delight and satisfy customers. Unless you have a franchise that services autonomous robots, you have better find franchisees who pay attention to people issues, and not just executing tasks.

That may seem a daunting list, but it shouldn’t. Franchising isn’t for everybody; it is for a sizeable part of the population, whom we have just described. And the good news is that this isn’t down to guesswork; all the factors I have described are objectively measurable. If you don’t know how, we do: contact John Ong on john@consultft.com or tweet me @jonmkiwi

#FLAsia2010 Special 2: Ideas require Imagination; Execution requires Capacity

21 10 2010

Something I learnt very quickly when I first start working in the Franchise and Licensing Field was that ideas – even brilliant ideas – are essentially worth nothing. This was hard to communicate sometimes to inventors and innovators who thought they had the next world changing idea in their heads and who assumed that step two was to start collecting the royalties. But an idea with no execution is essentially dead air.

This doesn’t just affect inventors: any business can come up with a world-beating strategy; not every business can turn their world-beating strategy into a well-beaten world. For Franchisors (and many others), the fundamental issue which determines their ability to execute is not – and this may surprise you – management style or ability to focus, but rather organisational capacity. If you don’t have the right people in place to support the training and support of your growing network, your network will grow so far and then stall. If you don’t recruit the right kind of Franchisees – those who have the capacity to execute your Franchise System relentlessly – then however successful you are in growing your network numerically, your brand will eventually collapse under the weight of failure to deliver.

The answer I often hear to this is something like “Oh, we have a fantastic Franchise Manager, she/he is our secret weapon…” That is great as far as it goes; but if your Franchise Manager left you tomorrow (perhaps someone else has noticed how fantastic they are), would you know how to replace them? In other words, can you write on a sheet of A4 the specification that makes them so successful, so that you could replace them – or multiply them – at need? If not, then you are far from secure.

Ditto your Franchisees, although here you are more likely to have some sort of profile against which you recruit. (If your profile is purely financial, once again I think you are in danger). But if you got lucky the first three times you sold a franchise, that doesn’t mean your luck will hold.

Building organisational capacity should be a highly intentional activity. We know what we are looking for and why, and we know when we have found it. Intentional capacity building allows for intentional execution of strategies and ideas. If you don’t already have access to a toolset that allows you to do this, time to get one.

(And yes: equipping organisations with just such a toolset is precisely what we do. Contact John Ong at john@consultft.com or tweet me @jonmkiwi )

#FLAsia2010 Special 1: Build Brand through People

20 10 2010

This is the first in a short series for FLAsia2010, where I will be over the next 2-3 days with my colleagues from Franchise and Licensing specialists FT Consulting.

What is the most powerful element of your Brand? The visual identity may be important, but it is the mental one – the place your Brand occupies in the mind of potential and actual customers – that really counts. Customer experience is core to developing this mental identity. Where does customer experience come from? If you are a manufacturer, it may come from the extreme usability and sheer brilliance of the product. If you run a franchise, or any other business with a service component, then around 95% of your customer’s experience comes from your people. (And even if you are a manufacturer, you might be surprised how much is to do with service staff – yours or your distributors’!)

Let me illustrate both sides of the story with a real example, a global F&B outlet. Their brand identity is pretty recognisable… but what does it mean?

Here’s what it means to me:

In Houston, it signifies that I will be greeted with a smile and great service. If I disclose my name there is a pretty good chance the server will address me by my name when I come in the next day. They remember me! How cool is that?

Here in Singapore, it signifies that I will be greeted with a smile and great service. If it is the outlet where my wife and I go for our weekly session to work on the business, they will already know what my order is. They know me! Pretty cool, huh?

What about in the UK? What does the brand mean there. Hmmm. How can I say this? I will be greeted… well I often won’t. Lack of attentiveness, lack of concern; actually, you can almost hear them say, “we are pretty much staffed by people whose conversation you are interrupting by coming into the store”. The often surprisingly filthy store. A few exceptions, but mostly in London where by employing foreign staff they get employees who already have some idea what this brand is meant to be about.

I am not imagining this. In fact, I just discovered that a close friend who commutes between UK and Singapore has been so puzzled by the difference that he has taken to asking staff at this chain in the UK what the brand means to them: average answer he gets is a grunt or “dunno”.

So what is this? A disease of the British culture? That Brits simply can’t do customer service? But then you would have to explain why, for example, the company-owned outlets of the UK coffee chains Costa and Coffee#1 have spectacularly good service staff.

And here is the point. 95% of your customers’ experience at any of these places is fundamentally about who you choose to employ in the role in the first place. So, to take the coffee example, Costa and Coffee#1 employ people who get a buzz out of serving people brilliantly, who love interacting with people, who love making a difference. A love of pulling expressos (or whatever the chain happens to be about) is a bonus – and of no value without the rest of it. The other 5% of customer experience is about having an adequate supply of good coffee beans / ribs / tacos /… and knowing how to prepare them. Yes, really.

Back to your business (and if the chain in question have recognised themselves, I would love to be of service: contact me). Do you want to add meaning and value to the name and the identity you spent so much on developing? Then get people who care about customers, who love serving and who are great at handling people and making them feel better about themselves and their situation. Alternatively, if you want to waste all of your other efforts and investments, don’t give employee selection another moment’s thought.

Employing the right people is not a dark art. Really. Start by looking at what you already have. If you are a franchisor, you should be benchmarking the very best of your customer service talent and including that in your Franchise Manual as a specification for recruitment selection. (And that doesn’t mean a list of desirable behaviours; I mean a list of objectively measurable personality characteristics which can be validated against actual behaviour.) You should also be benchmarking what kind of franchisee will “get” all this, and be willing to follow through relentlessly on it. You will then use that profile as part of your franchisee recruitment process. And if you are a franchisee and the franchisor hasn’t given you this specification for your employees, you should either push them to do so, or develop your own and then push them to adopt it.

Employ the right people, do everything to allow them to do what comes naturally and watch your brand accumulate value.

(If you don’t know how to go about this, we do; so get in touch. Contact my colleague John Ong at FT Consulting (john@consultft.com) or tweet me @jonmkiwi)