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CARING AND SHARING

by Colin Taylor,
last updated 23/07/2009

Colin Taylor explains why sharing information is vital for keeping franchisees motivated

Motivation is always an interesting topic, particularly to franchisors. How to select motivated people – and keep them motivated – is perhaps the most burning question in franchising. Over the years, I have found a number of interesting little ways which work for us at Stirling Sports, and which have helped us all to achieve a greater level of success.

Of course, greater commitment and, as a result, greater motivation are some of the often-quoted benefits of franchising. I have commented before that sales can be as much as 50% higher at a franchised outlet compared to a company-owned and managed store. Yet although the financial rewards to be gained from owning a successful business might seem to be enough in themselves to keep franchisees motivated, in truth they are not.

Ask yourself whether you honestly go to work just for the money? I know that if money were all that motivated me, I would certainly not be in sporting goods because it is such a small market in New Zealand. But I enjoy it – and franchisees are motivated the same way.

When we started franchising, we found that people were either naturally motivated, full of enthusiasm and with a strong, hard work ethic, or they were not. If they were not, and if we were not able to motivate them quickly, the prospect of more money – or the threat of ruin – would not be sufficient to cause them to do the right things. We had to arrange for them to sell.

When we did that, we saw the proof of the importance of motivation in the huge increases in turnover at the same store when one owner sold to another who had what it takes.

But even the best franchisees will occasionally lose energy or enthusiasm, and their sales will plateau as a result. How do you improve the long-term motivation of those people and the entire team?

Information

I have found an important element to be the sharing of comparative and competitive information.

Getting franchisees to correspond, to report and to share information is not an easy thing to achieve. Franchisees are, you constantly read, at the sharp end of the business, and it is the role of the franchisor to free them up to concentrate on their customers. Yet it is in the best interests of each individual franchisee – and of the team as a whole – that they spend some time analysing the business in their particular market and sharing the results with others.

At Stirling Sports, when we started franchising we already had 20 years of retailing sporting goods behind us. We had for years collated regular weekly reports, not just about sales (comparing department by department with the same period of the previous year), but also about market forces, hot selling lines, customer numbers and such other things as we felt were needed to help us identify and achieve our goals.

It was lucky that we already had that in place, because the requirement for reporting was there as a standard feature from day one of the franchise. As many franchisors will tell you, it is much harder to introduce such a system later when it means creating more work and more reporting for already busy franchisees. However, the benefits are considerable.

This comparative reporting brought great bonuses in motivation. Store owners saw it as a challenge. They wanted not only to blitz their previous year's department and total figures, but they also wanted to blitz other stores' figures. Each month, by hook or by crook, they would seek and usually find some achievement or some measure that they could beat. They did this for personal satisfaction but also, as we produced a composite report and circulated it to all franchisees, they started to put pressure on themselves to achieve and be recognised by all their peers. They found, in effect, new motivations.

No Secrecy

You would not enjoy being in the Stirling Sports group if you are a secretive person, for we publish all the figures, even those for the franchise company, to everyone.

Our systems measure and report to every owner the following information on a monthly basis:

  • All stores' sales are compared by department and by total.
  • All stores' customer numbers and average sales per customer are group knowledge.
  • All stores' sales percentage increase, by department, monthly and annually, are known to all.

There are only three things needed for a retail store to be successful: good sales, a good gross profit, and low expenses. With our franchisees understanding these key success factors, and having valid figures against which to measure their own performance, we can make meaningful comparisons to help each franchisee. Our advisory team, including our senior accountant, discusses with each owner their store's performance in detail, with particular regard to:

  • Sales, and sales per square metre
  • Gross profit
  • Expense analysis
  • Stock management
  • Owners' equity
  • Return on investment

The only thing that each franchisee doesn't know about the others is the net profit that each achieves. Even so, our society is so tight-knit that many of them discuss their results openly.

By analysing store reports, extrapolating trends and then flowing all the information back to the store owners, we create a great deal of goodwill and a team spirit within the group. It makes them all feel part of the system – not just one end of it. They know almost everything about everyone else, including the franchisor company's own sensitive sales information, and because it is an open, friendly and co-operative society they feel good about it and are motivated to achieve.

Hand-Written

However, this is not the whole story. For some years, we had been trying to get more feedback from our franchisees about local events affecting our stores' performance – competitors' actions, staffing issues and so on. It was like drawing teeth to get written comments about all these extraneous things which affect a business for better or worse.

There were a number of the team who did produce good, meaningful reports, but we were not making much progress with the others despite all sorts of ideas. Then one month we decided to publish to all stores a couple of extremely good reports so that everyone could see what was needed. The effect was noticeable. The next month we got a few extra reports, hand-written but full of the information we needed to keep us on the pace.

When we selected some of the best and copied them in their entirety, without censorship, to all the franchisees we got an even better reaction.

We thought about this at length, and now believe that our people are motivated by having their own individual report out in the hands of other franchisees and staff. It gives them a feeling that they have a voice, that they are being listened to, that any problems are shared, and that they are part of the whole team no matter how far they are from the group offices.

In a later month's reporting, we received 47 full pages of very valuable market information – even the handwriting had improved! It may take much longer now to read the monthly reports, but I welcome that because it helps us all to stay much closer in touch with each other, and with the real issues. We have found out things that are extremely helpful in our decision-making – and all of this because somehow we struck the right chord in getting feedback.

Recognition

If writing reports is partly about recognition, another way we recognise our people is by having awards, both with and without prizes. Every month we recognise milestones in achievement by store owners, and annually at our conference we have a black tie Awards Evening of our very own to recognise the achievers within our group.

Achieving, in our team, is not a matter of having the largest turnover. We have a fair system where it is possible for any owner to win the Premier Award and gain recognition from the group. We award a number of quite valuable travel prizes each year, and the one for the Best Team Member is highly regarded by all.

As has been said before, when you become a franchisor you stop being an operator. Stirling Sports Franchises Ltd is a communications company now, not a sporting goods retailer – it is the franchisees that sell the sports gear.

Our role is to create opportunities for our store owners, and teach them to take advantage of what we create. Our prime function is to communicate with them, and to help them stay motivated. Having the right systems to collect information – and creating the right culture to make it OK to share that information – is vital to fulfilling our function as franchisor.

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