Thursday, July 7, 2011

Franchising - Being In Business For Yourself, Not By Yourself

Advice On How To Get The Best From The Great American Business Model

By David Miranda

I was asked recently by a friend, who had recently purchased a new franchise, to provide some insights and advice on franchising. In a previous life, I had the privilege of being the VP of Brand Marketing for Holiday Inn Worldwide, considered a pioneer in franchising. My friend wanted advice on how to maximize his relationship with his franchisor. The following is a synopsis of my advice which I would offer to any franchisee (and franchisor, for that matter)

Franchising is the great American business model. It blends the best of entrepreneurship and brand power. The relationship between the franchisor and the franchisee is unique in the world of business. It can best be described by its derivation. The word, "franchise" comes from the old French and means privilege and freedom - the privilege of franchise ownership and the freedom to build a business supported by a strong partner. It is a relationship premised on mutual respect and responsibilities.

Mike Leven, my former boss at Holiday Inn and a member of the Hospitality Hall Of Fame provided me with the best definition of franchising I have heard to date. Prior to one of our annual franchisee conferences, we were going over agendas. Mike looked it over and asked, "How much input have the franchisees had in the agendas? Remember franchising is being in business for yourself, but not by yourself. We need their input." From that moment on, I embraced a totally different perspective on my role. I was there to support our franchisees and to do that effectively, I needed to get them involved and I also learned they needed to get me involved since that is what I was there for.

So this is the advice I gave my friend, the new franchisee.

  1. You are the custodian of the brand. As a franchisee, your customers; your staff; your vendors; and your community will see you as the personification of the brand. You must never take this lightly or risk becoming a weak link in the franchise chain and eroding the value of your business.

  2. Create, maintain, and nurture open communications with the franchisor. Good communications strengthens the business relationship. As a franchisee, you are on the front lines of the business and this information is vital, not only to you, but to the franchisor. It is the most powerful form of market intelligence particularly when coupled with the franchisor's macro view of the world. It is called a "GLOCAL" perspective, i.e. thinking globally, but acting locally.

  3. Speaking of communications, the best ideas in franchising have come from franchisee partners. Not only share new ideas with the franchisor, but also provide feedback on anything that could be improved.
  4. Exploit the power of the brand as a competitive advantage in the local marketplace. Take advantage of the portfolio of marketing and technology resources and expertise of the franchisor. Today, marketing is more complex than ever. From traditional media to the Internet and mobile and the relentless introduction of new technology solutions makes for a challenging environment. Seek the counsel and guidance of those in the franchisor organization that can ably assist.

  5. Proactively participate in franchisee meetings and conferences. These provide an invaluable opportunity, not only to share thoughts with your fellow franchisees, but, even more importantly, an opportunity to meet face-to-face with key members of the franchisor organization.

In summary, the franchisor/franchisee relationship only works when both parties work in unison for the common good. Remember it is about being in business for yourself, but not by yourself.