Three ways franchisors can tackle performance issues with franchisees

Underperforming franchisees can be hugely detrimental to a franchise. They can be damaging to the franchise brand and reputation, a drain on cash flow and a downright headache for franchisors.

Luckily there are a few ways to deal with performance issues before they get out of hand. Here are three.

1. Ensure you are able to identify and intervene in issues early

Knowing when there are issues with a franchisee is the key to being able to intervene before it’s too late. Whether there are cash flow issues, holes in the sales cycle or an issue with compliance, things can quickly spiral out of control if problems aren’t addressed early on.

Years back at Hire a Hubby, we found that there was a delay between actual financial results and the reporting of results that hindered our ability to act early during these types of events. The lag meant that we couldn’t be on the ball when financial issues arose because during that delay we were left in the dark. This lag was precious time that we needed back. That’s why we developed and adopted Franchise Cloud Solutions, a system that would allow us to access franchisee financial data in real time.

2. Develop a strong franchisor and franchisee relationship

Healthy relationships, whether they are business relationships or personal ones, rely on maintaining strong human connections. Having a strong franchisor and franchisee relationship can mean that franchisees feel supported, enabling them to run daily operations smoothly and driving them to improve results. It can also mean that there are open lines of communication which will enable discussion on how to improve processes. This can encourage growth and development of the overall franchise.

By maintaining a strong franchisor and franchisee relationship, franchisees feel more willing to discuss performance issues if and when they arise. A turbulent franchisor and franchisee relationship can, on the other hand, obstruct daily operations and hinder business results and franchise growth.

Strong relationships are born from openness and trust. If there is nothing to hide, then more energy can be put towards important business operations. One sure fire way to maintain a relationship of openness and trust is to have complete transparency over franchisee operations.

Full transparency can be achieved by maintaining real time franchisee data on finances and other important franchisee information. After developing Franchise Cloud Solutions we found that having full visibility over franchisees really helped with maintaining an open and supportive relationship. It allowed us not only to intervene when there were problems, but to provide extra support and guidance when needed.

3. Ask for franchisee feedback

Making sure franchisees are satisfied is important for their engagement and ability to achieve results. Happy franchisees can also equate to more buy in. Engaged and happy franchisees also serve as an example for prospective franchisees, which will make them more. inclined to consider a franchise opportunity for themselves.

By asking for feedback from franchisees on a regular basis, franchisors can identify issues before they become a big problem. When performance issues do arise, franchisors who ask for feedback are more equipped to identify the root of performance problems so that they can be worked through efficiently and effectively.

By asking for franchisee feedback, franchisees will feel like their opinion is valuable and will therefore feel more ownership over the franchise brand. This will in turn drive better results. Listening to feedback can also provide important insights into the perspective of franchisees, so that certain operations can be streamlined or improved.