How can you secure a good ROI on field management costs?
A promise that most franchisors make when recruiting new franchisees is to provide ongoing moral and practical support. To deliver on this promise, most franchisors invest 10 per cent to 20 per cent of their royalty revenues on support delivered face to face by field managers.
This is a significant amount of money, so franchisors need to ensure they are getting a satisfactory Return On Investment (ROI) for themselves and their franchisees.
The 8 hats of the field manager
The role of a field manager is to guide, motivate and coach franchisees to do the right thing by the brand, their customers and their business. It’s a complex and demanding job that draws on a mix of eight separate skill areas. At the Franchise Relationships Institute we call these the eight hats of the field manager, listed below with a brief definition of each.
Ambassador: Keeps franchisees informed of new initiatives and issues impacting on their business and the brand.
Business consultant: Works with franchisees to analyse the figures that impact on unit-level profitability.
Operations expert: Provides practical advice and support that improve the efficient running of the day-to-day business.
Marketer: Supports franchisees in developing Local Area Marketing programs to promote the business.
Trainer: Helps franchisees improve their knowledge and skills so they can run a better business.
Coach: Encourages franchisees to set meaningful goals and stay focused on achieving them.
Facilitator: Organises and runs constructive meetings that promote collaboration.
Inspector: Provides specific feedback on the franchisees’ adherence to systems and standards.
A complex role
In a sense the field manager is like the GP who needs to have up to date knowledge and skills to diagnose and treat a wide range of complaints, and advise their patients on how to stay healthy.
Just as medical practitioners undergo extensive initial training and ongoing professional development to ensure they have the competence and confidence to do their job, field managers also need to be properly trained. Because the eight hats draw on such a wide range of communication, consulting, business and technical skills, this is no mean feat!
Consider also that, because every franchisee will evolve and grow as a business owner, their support needs will change over time, adding further complexity to the demands on a field manager. For instance, when supporting rookie franchisees, competence as an operations expert is paramount. However, as a franchisee masters the day to day demands of the business, the field manager will need to offer more support as a business consultant and coach.
While each field manager will bring his or her own talents to the role, depending on their personality, training and experience, we can’t assume they have what it takes to deliver a good ROI for their franchisees and franchisor.
Indeed we often receive complaints from franchisees and franchisors that there is little to show in terms of the significant investment of time and money that goes into these visits. This is certainly not through lack of trying as we have found most field managers to be highly committed to doing their best.
Combatting stress and burnout
The fact is field managers have a tough job, often working alone out on the road, and they don’t always know what they are going to face when they walk through a franchisee’s door. Not surprisingly this role has a high burn out and turnover rate, which also contributes to a franchisor’s costs.
For instance in a study we did of 160 field managers from 49 brands, 60 per cent said their work was having a negative impact on their stress levels and 45 per cent felt their job was having a negative impact on their physical health.
Franchisors should take heed of this. When an effective field manager resigns it can have a negative impact on the franchisees who have been under their care. The field manager will also often take significant operational and cultural experience with them about how things are done. And the new field manager will need to be educated about each franchisee’s business and history.
High turnover of field managers can thus unsettle the stability of a network.
Franchisors would be wise to ensure they are recruiting the right people, inducting them properly and supporting them adequately.
Fortunately in recent years we have seen greater commitment by franchisors to invest in the professional development of their field teams. For instance, attendance at our Field Manager Bootcamps and Conferences has been strong.
In addition to reduced turnover of staff, our research has shown other benefit to a franchisor of investing in professional development of their field teams. This includes higher levels of franchisee advocacy, commitment and engagement; and improvement to franchisee sales and profitability.
6 tips to improve ROI and effectiveness
With this in mind, here are six tips for improving the ROI of the field management function:
Ensure field managers have the basic tools to do their job, including up to date smart devices loaded with relevant software, and they are properly trained in how to use these tools.
Ensure they have ready access to the KPIs and performance data of the franchisees they support, so they don’t waste time having to find this data and pull their own reports together.
Ensure field managers receive a thorough induction, not just in the operational aspects of the franchise network, but in the organisation’s history and culture, so they understand why things are done a certain way.
Ensure there is a thorough handover when new field managers take on an existing franchisee, so they understand the people and the past challenges associated with the business.
Ensure the field team is kept informed of what’s going on at support office and is kept in the loop about new strategies or planned changes.
Provide field managers with ongoing professional development, especially in the areas of financial management, coaching, facilitation, negotiation and marketing. As a guide we would suggest at least seven days a year for each person, with at least 50 per cent of this being externally delivered.
In conclusion significant time, money and resources are often invested in creating a field management function. If a franchisor invests wisely in their field managers to ensure they are properly trained, supported and equipped, the returns can be significant to all parties.