How can a franchisor best instigate change across a network?
Tim Cockayne, CEO of retail franchise Total Tools, came face to face with the process of change in the network when he addressed the culture of working hours.
“Every single decision we make in retail we always ask one question – what is the right decision for the customer? These are not always comfortable decisions but we need to listen to the customer,” he told the retailer delegates at the recent Inside Retail Live event.
And what the customer wanted was to have extended opening hours on a Saturday. That was a challenge for the network of Total Tools franchisees.
“Having a cooperative business means each owner thinks they run their own business and make their own decisions,” said Cockayne.
He introduced new working hours in a highly compliant and disciplined network following extensive market research, proving it would be a success.
“People complained about working hours 8am to 4pm Saturday,” he revealed. But the results of longer working hours paid off as franchisees started to see the benefits.
So how should you introduce a significant change to your franchise network?
Greg Nathan, founder of Franchise Relationships Institute, says “It’s always important to get people commited to change otherwise you won’t get results.”
Here are his tips for smooth change management.
1. Get influencers on board
There are certain stakeholders you need to embrace as a starting point. Identifying the individuals who you need to get on board is a fundamental part of the process of change – and it often isn’t just franchisees.
It can be anyone who can influence the outcome – suppliers, staff, certain departments at head office for instance.
“Make a list and prioritise who can have the biggest influence or undermine the change? Build them in to the process and consider what they need,” he advises.
2. Get the timing right
Of course there may be outside forces at play which will affect the speed at which change is introduced. “There might be a window of opportunity, there might be competitors’ actions which could impede your business. It could be a question of support or other factors such as a conference where you may want to announce changes.”
Nathan suggests franchisors can move quickly if they think through the process of announcing change and focus on transparency – outline the basics of what is happening, why it’s happening, how it will benefit the individuals concerned, and provide opportunities for them to clarify their concerns.
“Avoid the unnecessary death by 1,000 cuts” he says.
3. Give choices
Be wary of offering franchisees and other stakeholders choices that may prevent the change going through. However franchisees like to feel empowered, so providing a choice of method to achieve the goal gives them some level of control.
For instance, if your competitor is smashing prices, you have to match them to keep market share. But the choice could be how the discounting is going to be achieved – should it be a swift move or a staged price cut?
4. Address concerns
Franchisors need the staff and the franchise network to commit to the new strategy so considering their concerns makes sense.
Nathan suggests conferences are the perfect time to introduce change because small groups of five or six people can workshop their concerns and put forward a final list to the franchisor.
It’s a quick and efficient way to manage the questions.
“It can be an extremely powerful way to gather rapid commitment. People need to trust for the right reasons and they will not help if they think the changes are unreasonable. If they think the motives are self-serving or they will be unfairly disadvantaged you won’t get to first base,” says Nathan.
5. Show commitment
Franchisors would be wise to provide evidence that backs up why the change is proposed.
And there is always the opportunity to show commitment to the process as a franchisor. “The franchisor might say, we’ll share some of the pain, we’ll devote extra resources to the process,” suggests Nathan.
Why making change in a franchise is like looking at an iceberg
Nathan shows how different levels of change can invoke varying responses.
The tip of an iceberg
“At the tip of an iceberg changes to products can be exciting. That’s what the customer sees.
“If you go deeper, it’s about product and system and might affect the back of house system, and you’ll start to get resistance from franchisees.
“We’re wired to conserve energy. When whe have to learn something new it can be frustrating. That drain in energy and time creates more resistance.
“If people expect a new system (IT, perhaps) or they have to invest in the business, or employ extra staff, that’s introducing a level of strategy and leadership so expect much bigger resistance.”
Franchisees on average have been in their system six years, and may have seen poorly thought-out strategies proposed by the franchisor. There’s a tendency for new franchisor leadership to want to make their mark. And that makes franchisees nervous or cynical, says Nathan. “It reminds them of the pain of the past.”
He is in favour of franchisees challenging franchisor plans – like a pressure test to see if the franchisor has thought things through.
“If a strategy is wrong it can put a whole network backwards,” he says, “it can embarrass a brand.”
The biggest resistance will come for any proposed cultural change that goes against the value of the corporation, of what franchisees hold dear.
“Expect a revolt, people will be outraged,” says Nathan. “Franchisors have got to think through how the change fits with what people think is right, and good, and important."