Transparency is bandied around as fundamental in a franchise relationship so why not build trust before you start the partnership? Here are four steps to follow in the recruitment process to show franchisees you value transparency.
Every field manager I know has a story of a franchisee who started their business with expectations completely removed from reality. And when the reality hit the expectation, the consequences were often devastating, to the franchisee personally and to the relationship with the franchisor.
One experience that sticks with me happened while I was working as a field manager. I met up with a new franchisee to plan the opening of their store. As we discussed hiring staff, hand over from the shop-fitter, first orders, opening marketing… it quickly became clear the franchisee expected me to do the heavy lifting for them.
‘You’ll handle that won’t you’… ‘That seems like a job for you’… ‘I don’t know how to do that, so I’ll leave it with you’.
You can imagine how that conversation ended! The franchisee was shocked and then felt completely betrayed. The relationship never recovered.
How these expectations form is sometimes a mystery. Sometimes they can be traced back to the very beginning of the relationship and the recruitment process. Other times no amount of management on the franchisor part makes any difference.
Regardless of how the expectations are set, when they are not met most franchisees look for someone to blame and more often than not the franchisor cops it.
When trust in a relationship is broken it is extremely difficult to get it back. Broken trust has a way of coloring the other relationships around it. Like a fog it clouds any good work and affects others by association.
There are some helpful ways to keep franchisees in step with the facts from the start of the relationship.
Transparency promotes trust, drives accountability, improves communication, it can increase productivity and support morale in your franchise network.
Here are four ways to start off on the right foot and show franchisees you value transparency in the business.
1. Focus on recruiting not selling
It may sound like semantics, but there is a difference between selling a franchise and recruiting a franchisee. Recruiting is finding the right fit for the business. Recruiting involves a process of ‘sussing’ each other out and deciding if it’s going to work for both parties based on research and evidence.
Selling is transactional.
Some younger franchise systems might feel the pressure to get to critical mass and sell franchises. I am yet to meet a franchisor who has said that process was worth the pain later on. Most don’t keep doing it. Every system that has expanded rapidly has had to go through a [expensive and taxing] period of rationalizing.
2. Set a goal that your franchisee signs the agreement knowing the best and the worst
The recruitment process is an opportunity to build trust, credibility and respect. I asked a knowledgeable colleague who has been a franchisee, a consultant to the sector and a member of a franchisor team… knowing what he knows how much information should a franchisee get in the recruitment period? Andy said – all of it!
In his view a franchisee should come in knowing the best and the worst. Arming the franchisee candidate with the bad things that can happen and how they are dealt with by the franchisees and the franchisor, provides a realistic picture and helps keep expectations grounded.
During the due diligence process, most franchisees will uncover issues and negativity about your business. Getting on the front foot and sharing the issues and how they were dealt with builds trust.
Franchisees who have all the information necessary to evaluate the business, ensure it’s a good fit for them and to form expectations based on hard data are more likely to be realistic about the opportunity.
3. Do they really hear you? Get evidence
We often hear what we want to hear. Some franchisee candidates can find the amount of information they need to process overwhelming. Or they may just focus on the bits of information that support their expectations.
Franchisors can encourage an informed decision making process by confirming franchisees have a realistic grasp on what is involved.
Having a potential franchisee provide evidence of their investigations or getting them to repeat back information you have provided is a useful way of confirming understanding.
This can also be useful later in their journey if they have a ‘selective memory’ moment and your field team needs to realign them.
4. Lead by example
From the initial inquiry right through to exit, franchisors are constantly asking franchisees to be transparent. Wanting intimate detail on their personal finances, comprehensive business performance information, financial statements … we want it all. Role modeling that behavior by providing factual information is a great way to build trust and encourage transparency in the relationship.
Transparency in the recruitment process doesn’t guarantee better decision making, but it does guarantee more trusting relationships.