BEST PRACTICES FOR GREAT FRANCHISING
Franchize Consultants share eight best practices to build excellent franchises
Award-winning specialists Franchize Consultants launched their Franchising Best Practice 500 in our last issue. We published the first tip, about the need to focus on franchisee profit and returns, in full. Here are outlines of the next eight – find them in full online at franchize.co.nz.
2. Up-to-date franchise manuals
Franchise Manuals help the transfer of a successful business model, protect a valuable brand and help franchisees understand how to operate within the franchise system. They need to include information that is relevant and practical to franchisees, and they need to be up-to-date.
3. Common Chart of Accounts for franchisees
Franchise systems need a common basis for understanding and comparing franchisee performance. A common Chart of Accounts is essential, featuring the same account breakdown for all revenue, expense, asset, liability and equity items. This practice should also extend to other financial and non-financial metrics of the same franchise.
4. Franchisee satisfaction surveys
Franchisors need to know how franchisees feel individually and collectively. This is important because franchisee satisfaction has the power to help build or damage a franchise system, depending on whether it is positive or negative. We recommend a regular annual or biannual franchisee satisfaction survey conducted by an independent party.
5. Franchise Advisory Council (FAC) constitution
An FAC is an important communication and development mechanism and involves a lot of franchisor and representative franchisee effort. It therefore follows that it is worth ensuring that the basis for the FAC (ie. the constitution) is structured in an optimal way for the business.
6. Franchisee business planning
Franchisee business planning is a critical franchise system process and it is referenced in many franchise agreements. Good franchisors encourage comprehensive franchisee business planning with all of their franchisees, and franchisees must be receptive, too.
7. Consistent field visitation
Field visits are an important part of a franchisor’s communication, support and development plan. Within this plan, established franchisees should receive a consistent level of field visits.
8. Franchisor business plan
A franchisor business is involved and complicated and the work is never totally done. A comprehensive Franchisor Business Plan is important to ensure there are clear objectives, covering impactful and important areas unique to a franchise system, along with prioritised areas of focus.
9. Group marketing fund reporting
The group marketing fund report should include information that is meaningful to franchisees, both in terms of sources of income and expenditure. A good group marketing report will provide a useful breakdown of actual marketing expenditure and, ideally, measures of associated effectiveness.
‘Franchize Consultants helps good franchising companies be great companies, and great companies stay at the top of their game,’ says Dr Callum Floyd, the company’s MD. ‘For more detail on these best practice insights, go to our website.’
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This material is copyright © Franchise NZ Marketing Limited, Franchise New Zealand ™ magazine and Franchise New Zealand On Line . While it may be downloaded for personal use, no part may be reproduced in any form whatsoever without the specific written permission of the publisher.