8 tips for Great Franchising

Award-winning specialist advisors Franchize Consultants launched their Franchising Best Practice 500 in our last issue. We published the first tip, about the need for franchise leadership to focus on franchisee profit and returns, in full. Here are outlines of the next eight.

2. Up-to-date franchise manuals

Franchise Manuals help the transfer of a successful business model and protect a valuable brand. Franchise Manuals also help franchisees understand how they are 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 constitution

A Franchise Advisory Council (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 and insightful breakdown of actual marketing expenditure and, ideally measures of associated effectiveness.

More detail

‘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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