What to do with your smart franchisees

Franchisors daily face the dilemma of whether to recruit smart entrepreneurial franchisees or discard them as potentially too much trouble. Why waste all this potential?

The typical franchisee recruitment package will tell you that you need compliant applicants ready to follow the operations manual in step with the rest of the team. However to keep up-to-date and be ahead of competitors the franchise system needs fresh ideas, selective risk-taking and an intelligent assessment of opportunities. Some of this can surely come from your franchisees without risking a collapse in the cultural balance of the franchise brand.

Don’t treat all franchisees the same

Intuitively franchisors will look at the top quartile of franchisee achievers and treat them differently to the rest. Why not also look at assessing who are the ‘too smart or soon-to-be difficult’ franchisees and make the best of their talents as well. Let’s call them Too Smart Franchisees or TSF for short. Many of the characteristics of these hard to handle franchisees remind me of over achieving teenagers who are yet to understand the forward value of mentorship – another word for franchisor training!

Be proactive

All franchisors know that at some point franchisees will think they know it all and become restless. The recent McKinsey study into management highlighted that the number one leadership behaviour skill was being supportive. It makes sense to identify each TSF and realise that they represent a great potential for the franchise system but equally a destructive force if they are allowed to get bored or feel that the franchisor management is ignoring them. Franchisors need to be  proactive, identifying the career path and objectives of each TSF and keeping them close. This is a relationship that a franchisor will need to work on continuously. Ignore TSFs at your peril.

Don’t make them a competitor – make them competitive

Each TSF will have their own special abilities. Those that rate highly in creating a loyal team and strong customer relationships need to be identified early. Those TSFs could be your best franchisees or your most dangerous competitor. Franchisors often assume the worst and push such a TSF out of the franchise creating a loss of intellectual capital and vastly increasing the risk of litigation and bad publicity with an articulate ex-franchisee. Instead, create a list of each TSF with similar skills and set regular meetings and make a conscious effort to respond to their queries more urgently than with other franchisees.

You or your management team may worry that you are ‘going soft’ on these TSFs by treating them this way but by quick responses a TSF will see that they are valued and that the franchise system is adding value for them. In turn during the business cycle, ensure that you call for feedback and suggestions so that the TSF understands that they are respected for their ideas. Be sure that when ideas are received that they are acknowledged promptly and that the review process that you implement is well understood.

Time and time again franchisees complain that they have handed over great ideas and heard nothing more. Equally a franchisor will say that they have received ideas, undertaken detailed research only to find that those ideas were not viable or had already been tried in the past and have not worked. The missing link is to provide this feedback even if it means explaining to the TSF that their idea was comprehensively rejected so that  they can then better understand the process and hopefully come up with even better suggestions which can be adopted for the benefit of the brand and all the franchisees.

This process will help better identify the real talents of the TSF and equally those gaps in their skill set that need to be mentored before other problems arise. This process will avoid characterising the TSF as a troublemaker and a person to be avoided. Instead it will improve the franchisee businesses and lead to them being more competitive rather than being an under-achiever or worse; cast out to become a competitor.

Champion desired change

The Mackenzie report also recognised that being a leader who can champion desired change is critical to the success of the business. In the franchise sector, the opportunity to receive great ideas from franchisees can be almost overwhelming and test the ability of the franchisor management team to sift out good ideas and implement them. Identifying a TSF who is  happy to take on change will give you an excellent franchise unit to work with and  it provides the TSF with a challenging task, recognition of their value and an opportunity to be recognised across the franchise brand.

You will be surprised how many other franchisees are less resistant to change when they see one of their own being involved with implementation of new business processes rather than seeing it being imposed on the franchisees after being tested in isolation within a franchisor company unit.

When discussing the avalanche of change that occurs, be sure to explain to a TSF that to avoid change will have a disastrous effect on the business and the overall reputation of the brand: the brand needs to be forward thinking rather than reactive. Being satisfied with the status quo leaves the door wide open for competitors so you should task your TSFs as the early outposts looking for new ideas.

Next encourage your TSFs with a well explained process for passing those new ideas into your management system and  recognise and reward them for their hard work. A TSF will understand that not every new idea will be implemented as long as they understand how the review process works.

Don’t make the same mistake twice

Running a tight, efficient franchise is the aim of every franchisor. A critical determinant is how often franchisees have repeat business with increasing value of sales for each existing customer.

A TSF will be quick to recognise that having regular customers is a better way to run a business than to continually search for new customers where a huge amount of time and cost is spent on searching, finding, converting and unfortunately then starting the whole churning process again by losing the new client.

Get the best out of your too smart franchisees

Once properly mentored (rather than calling it training) a TSF’s higher level of skills can be used for the benefit of the franchise system process to create long-term customers and year on year growth. When explained correctly, the message is understood by a TSF that instead of being forced to follow the system, they are actually working in a business in which their input is valued but also moderated to ensure they don’t make the same mistake twice. Add to this that some of the success of the system has or will come from their contributions and your TSF will share a collective mission with the rest of the franchise team.

A simple message but one which is often difficult for your TSF to understand, despite all their skills and expertise. Comprehending the potential of your TSFs can now mean no longer rejecting or losing their talents and significantly increasing the growth of your franchise.

How to make the most of smart franchisees

  • identify their skills early in the recruitment process
  • encourage their contributions rather than pushing them away
  • offer a mentor program
  • introduce them to change management
  • reinforce that the system is always subject to change invite contributions and recommendations
  • show leadership and explain why some of their ideas are rejected
  • add healthy competition between franchisees