How can franchisors ensure established franchisees are getting what they need to keep their business on track?
According to new research by the Franchise Relationships Institute (FRI), 53 percent of Australian franchisees have reached a mature stage in their business lifecycle, after operating their businesses for more than six years.
Greg Nathan, psychologist and founder of FRI, says “There is a myth that most franchisees are inexperienced business people who just need basic help and guidance from their franchisor.
“However our latest research clearly shows the franchising sector in Australia is now mainly comprised of experienced franchisees, with over 25 percent operating multiple units, and these people expect a more intelligent type of business support from their franchisor.”
The research results will be released at the upcoming FRI event, Franchise Operations Conference in Melbourne on 12 May. Attendees will hear recommendations from FRI on how franchisors can add value to mature franchisees.
Part of the research involved asking 1,000 franchisees with tenure over six years what they want from franchisor support staff.
“These people primarily want to be consulted and listened to when important strategic decisions are being taken by the franchisor, and to have their experience respected,” he says.
Nathan, who also trains franchisor executives in relationship management, believes these executives often lack the commercial and negotiation skills to have business conversations that add value in the eyes of mature franchisees.
“A franchisee often has more business experience than the franchisor person advising them”, he says.
Franchisees can become complacent
According to Nathan, mature franchisees are at risk of complacency – something that can threaten the business’ viability. The solution is for established franchisees to reinvent themselves and their businesses or make a decision to move on, he suggests.
And the franchisor can help with this process.
“Rather than the stress and burnout we see in business people during the earlier stages of their development, longer tenure franchisees can get bored and suffer from rust-out.”
“Mature franchisees need to be challenged, but this needs to be done in a respectful way, and with a commercial perspective on how the franchisor can help them achieve better results and more satisfaction from their business”.
So the theme of this year’s operations event is ‘Adding value in the field’.
Speakers at the Franchise Operations Conference include senior executives from some of Australia’s best performing franchise networks including Bakers Delight, Priceline, Harcourts, Pandora, Poolwerx and Boost Juice.
One of the most experienced franchise operations executives in the US, Geoff Goodman, will also address the conference on tips for supporting franchisees at various levels of their business lifecycle.