| Now that you have invested your time, energy | | | | almost folksy. No matter what type you |
| and money in buying a franchise, how do you | | | | belong to, communication is still the key. |
| work within the system? How do you take | | | | With a small franchisor, you may be able to |
| advantage of all your franchisor has to | | | | call the president or founder directly. A |
| offer? How do you deal with your | | | | franchisor with fewer than thirty units needs |
| counterparts, other franchisees?In this | | | | your input at the top level. He or she will |
| chapter, I will give you tips that will help | | | | still be working out administrative and |
| you thrive and prosper in your new | | | | organizational bugs in the system. Your |
| business.CommunicationIn any franchise | | | | success is a very serious issue with them. |
| organization, it's important to maintain open | | | | They can't afford very many franchisee |
| communications lines. A franchise is like a | | | | failures this early in the game. Your |
| marriage. You are now married to your | | | | problems and suggestions take precedence over |
| franchisor and communication is the | | | | all other aspects of their business. If you |
| key.Communication in a franchise relationship | | | | fail, it will effect future sales. It is |
| occurs in numerous ways. You should | | | | important for the Founder to know how the |
| remember to keep communication friendly, | | | | franchised model performs in different |
| helpful, upbeat and honest. Too many times | | | | locations, demographics and local economic |
| a franchisor/franchisee relationship will | | | | environments. If they can solve these |
| become adversarial, hostile and aggressive. | | | | problems at a unit level now, it will insure |
| If this happens, communications lines tend to | | | | the success of the future units one hundred |
| go down and everyone suffers. You as the | | | | fold.In medium sized franchises, you may not |
| franchisee have the power to keep | | | | have the opportunity to be on a first name |
| communications on a positive note. There are | | | | basis with the Founder or President. |
| many things that can be done to help your | | | | However, you will certainly get the chance to |
| franchisor communicate with you.Try not to be | | | | meet them. You most likely will be dealing |
| a chronic complainer. If you have a | | | | with a master franchise and a regional |
| legitimate complaint, perhaps you could offer | | | | director who will most likely mirror the |
| some praise first. Something that is being | | | | attitude of the Founder or President. You |
| done right and how happy your are. Then | | | | should get to know your master franchise |
| mention the little something that's caused a | | | | operator and regional director on a first |
| stress for you at your business. If you | | | | name basis. They will be concerned about your |
| think you might have a solution - offer it or | | | | outlet because a regional director may |
| offer to sit down and brainstorm a little | | | | receive incentives for your performance and a |
| with a regional director or company | | | | master franchise actually receives part of |
| representative. Offer to meet them at your | | | | your royalty payments. Therefore, the more |
| store, your point of power so you can | | | | money you generate, the more money they |
| negotiate from a stronger position. Be | | | | make.A large franchisor will have layers of |
| friendly. Try to meet when you're having peak | | | | corporate management and possibly a |
| hours. Show the franchisor or their | | | | combination of master franchises, |
| representative how efficient you are, how | | | | international franchises and lots of regional |
| clean your place is and how you are following | | | | directors assigned to different areas or run |
| standards to a tee. Treat it like a military | | | | out of regional master franchise areas. |
| inspection. Then explain the problem. Tell | | | | Some large franchisors may not have a Founder |
| them your suggestions and ask what should you | | | | any more. The original Founder may have sold |
| do? Remember:The art of diplomacy is letting | | | | most of their stake in the company and no |
| someone else get your way.Regional | | | | longer oversees any part of the actual |
| DirectorsChances are your regional director | | | | franchisor's operation. Many large |
| has encountered your same problem in one of | | | | franchisors may be publicly traded companies |
| the other franchised outlets or perhaps many | | | | that may also own other franchise systems and |
| other outlets. Your regional director can | | | | may during your franchise term either buy |
| tell you what other franchisees did to | | | | more franchisors out or sell their interests |
| improve that problem and which solutions | | | | to another franchisor. Since this may happen |
| worked best and which ones didn't work at | | | | at any time, it's even more important to know |
| all. Also, which solutions were approved by | | | | your master franchise operator or regional |
| the company and which ones were not and why. | | | | director and be on good terms with them. |
| Any solutions you might have could be of | | | | They will still be there tomorrow no matter |
| great interest to your regional director | | | | who buys, sells or trades stock ownership or |
| because even if your solution may not work at | | | | rights at corporate headquarters.Franchisee |
| this time, it may be a missing puzzle piece | | | | InitiativeNow that you've learned how to get |
| to a long-term solution which will work | | | | along within the system, you are probably |
| system wide. Staying on good terms with your | | | | wondering 'What else can I do with all this |
| regional director can be very valuable.Let's | | | | knowledge?' The following are some examples |
| say your franchisor want s to test a new | | | | of things you can do:Help With Public |
| product in a certain region and they ask the | | | | RelationsLet's say you sponsor a little |
| regional director in that region which outlet | | | | league team that wins the county championship |
| would be the easiest to use for the test | | | | or you sponsor a contestant in a city wide |
| market. If you are on good terms with | | | | beauty contest who becomes Miss Any Town. |
| corporate office staff and your local | | | | Tell your franchisor. They'll want to put it |
| regional director, then you might be picked. | | | | in their newsletter and send it to all the |
| Franchisors take test markets of new products | | | | other franchisees. They will show it as an |
| very seriously. They usually:Spend lots of | | | | example of good local public |
| money in local marketingSet up well designed | | | | relations.Improve EfficiencyIn your day to |
| store signageRe-do menus, brochures etc.This | | | | day operations you may design a form on your |
| will help you attract new business to your | | | | computer to help you increase efficiency at |
| store and pay for new signage. Even if the | | | | your store. Fax it to the Vice President of |
| test market fails and the new product or | | | | Operations with a note:Bob - This form helps |
| service is never implemented system wide, you | | | | us run more efficiently. Perhaps other |
| still win because you now have a larger | | | | franchisees might like it. Do you want me to |
| customer base and more local awareness of | | | | mail you a disk with the file on it? I used |
| your business. By the way, over 50% of new | | | | Microsoft Excel 7.0Help With Your ExpansionIf |
| products fail and it's certainly nice to have | | | | you want to expand your area and add another |
| someone else pay for it. It might put a | | | | store, do some preliminary demographic work |
| small non-franchised company out of business | | | | and a financing study. Ask your franchisor |
| if they had a new product failure.Assist Your | | | | to review it and call you to talk. You'll |
| FranchisorDue to the expansion rates of | | | | definitely improve your chances of being |
| franchisors, sometimes they will have to call | | | | approved. Also include a schedule of |
| on franchisee for help. To move fast in the | | | | estimated increased income from royalties and |
| market place you need a strong team. | | | | purchases in your package to the franchisor. |
| Franchisors know this and no one is more | | | | Show them how you can help them.Volunteer To |
| dedicated than individual small business | | | | Help With TeamworkIf your franchisor has a |
| owners. That's exactly what franchisees are. | | | | franchisee advisory board, offer to join and |
| Sometimes there is not enough time to gear | | | | help franchisor/franchisee relations.If you |
| up to meet the demand of a growing system. | | | | are in default of your Franchise Agreement, |
| Franchisors must call on franchisees to help | | | | talk with your franchisor. Develop a time |
| in:Training | | | | line that you can live with to come back into |
| | | | compliance. Franchisors don't want to |
| Product Development | | | | terminate good franchisees.Franchisee |
| | | | RelationsNow that you've learned about |
| Sales of New Units | | | | franchisor relations, let's discuss the rest |
| | | | of the team. Think of the franchisor as your |
| Streamlining Systems | | | | coach and the other franchisees as your team |
| | | | mates.Remember: TEAM is an acronym.T E A M = |
| Marketing of Services | | | | Together Everyone Accomplishes MoreHow can |
| | | | you boost your relationship with other |
| Etc.Usually the franchisors are willing to | | | | franchisees? This is relatively easy and |
| pay for this help. If the franchisor out | | | | here are a few ideas that can help you.Talk |
| sources some of it's services to franchisees, | | | | Highly Of Other FranchiseesWhenever you hear |
| it's really outsourcing in house. There are | | | | anything said about a fellow franchisee, say |
| many reasons behind this strategy:It costs | | | | positive things such as:Bob is one of the top |
| less than if the franchisor does itIt | | | | producers in the companyBetty runs a tight |
| improves franchisees profit since the | | | | shipEveryone loves Bill, he's such a great |
| franchisees are paid for their helpSecrets | | | | guyLinda's store is so well kept up that you |
| are not lost to industry wide consultantsYou | | | | can tell she is on top of thingsAs a matter |
| as a franchisee have a vested interest to | | | | of fact, no matter which franchisee is |
| make sure the system succeeds, therefore you | | | | mentioned, say something positive. On rare |
| will do a better jobIt builds a "teamwork" | | | | occasions you may hear something negative. |
| atmosphere in the systemOf course, if you are | | | | Be sure to down play anything you hear that |
| a chronic complainer and a problem | | | | is negative about a fellow franchisee. If it |
| franchisee, none of these extra perks of | | | | happens a lot, call the franchisee and say |
| belonging to a system will be available to | | | | "You know Bob, I thought I'd call you |
| you.So how do you maintain a positive | | | | directly. I'm sure it's nothing, but Mrs. |
| relationship with your franchisor and promote | | | | Smith, one of your customers said...." If |
| a win/win situation? The answer is very | | | | it's still a problem, you may want to call |
| simple. Almost too simple to write in a | | | | your regional director or mention it next |
| book, yet it is so important and few | | | | time he/she comes to visit.Clubs And |
| franchisees do it.Be Nice To Office Staff, | | | | OrganizationsIt is important for you to join |
| Vendors And ConsultantsWe have talked about | | | | at least one service club. It helps your |
| regional directors who are the personal arm | | | | business become part of the town. If your |
| of the franchisor. The one on one human | | | | neighboring franchisees belong to certain |
| side. This is not the only contact you will | | | | groups, you should belong to a group which |
| have with your franchisor. Your franchisor | | | | they do not. For instance, if one belongs to |
| will have office staff, vendors and | | | | the Rotary, another to Kiwanis and a third to |
| consultants, all of which are there to assist | | | | the Optimist Club, you should join the Elks, |
| you in your business. Each of these groups | | | | Lions or be on the board of directors for the |
| should be treated differently, but all should | | | | hospice, YMCA, Boy Scouts or city run |
| be treated with respect. Treat them like you | | | | committees. Most service clubs work on big |
| want your customers to treat you, because | | | | projects with their local affiliates |
| essentially you are their customers and they | | | | committees and if you and your neighboring |
| work for you. If you have ever gone out of | | | | franchisee are in the same club, you'll be |
| your way to help a good customer, then you | | | | duplicating services. After all, if a fellow |
| have an idea of why you should try to be on | | | | franchisee needs help with a service project, |
| good terms with your franchisor's office | | | | they will call you anyway. You don't need to |
| staff, vendors and consultants.Office staff | | | | spend time in meetings when you can be out |
| at franchisor headquarters are usually very | | | | and about meeting new people, making friends |
| efficient and very sharp individuals. They | | | | and establishing new business contacts. If |
| have to be to keep up with the busy schedules | | | | you meet someone from another area, you'll be |
| and fast moving pace of a franchisor. As a | | | | happy to take that information to your |
| matter of fact, a lazy or inefficient | | | | neighboring franchisee. They will do the |
| employee would never survive in the hectic | | | | same for you and this is what brings your |
| day to day operations of a franchisor. Every | | | | referral network with fellow franchisees full |
| one is calling, e-mailing, faxing, in a hurry | | | | circle.Chamber Of Commerce MeetingsIt is |
| to get things done. They realize that you | | | | important to attend Chamber of Commerce |
| are equally busy in your outlet and don't | | | | meetings. Since most of the people at these |
| have time to be left on hold. You need to | | | | meetings will already know you as a local |
| run your business. However, don't take your | | | | business person, they will typically engage |
| frustrations out on office staff. They are | | | | you in conversation and this will prevent you |
| as busy as you. Think about it this way: | | | | from meeting new people. It really helps to |
| fifteen other people just like you who are | | | | have more than one franchisee of a system at |
| very stressed and very short while on the | | | | a Chamber of Commerce meeting or mixer. With |
| phone. If you are very sincere, polite, | | | | two franchisees that can answer virtually any |
| upbeat and thankful when you call, you quite | | | | question under the sun, you'll knock 'em |
| possibly could be the only person who was | | | | dead.Co-Op MarketingIf you have a countywide |
| nice all day. They will remember that. If | | | | newspaper and want to place an advertisement, |
| you are abrupt, rude, arrogant, etc. your | | | | find out if you have other franchisees in the |
| request may be placed at the bottom of the | | | | area that may be intrested. You can put each |
| pile, which at a franchisor's headquarters | | | | phone number and location at the bottom of |
| may be a long way down.What if you need a new | | | | the ad and divide the costs. If you've been |
| piece of equipment for your store and all you | | | | on good terms with your vendors, they may |
| need from headquarters is something faxed to | | | | share in the costs and if you've been on the |
| your bank from the franchisor's office staff. | | | | 'good list' with your franchisor, your |
| If you're nice, the staff person may simply | | | | advertising request will surely be approved. |
| walk down the hall and pull out your file and | | | | It's all about communication, team work and |
| fax it right then. If you're rude, they | | | | attitude.Call And Say HiIt is important to |
| might put your request in a basket of things | | | | call up and just say hi to your fellow |
| to do and wait for required signatures which | | | | franchisees. It will remind them that you |
| might take a week. Either way is most likely | | | | are always near by. You will get something |
| within accordance of the Franchise Agreement. | | | | positive out of the phone call such as:A good |
| It's really up to you. I suggest you make | | | | lead |
| things easy on yourself. Try to get on the | | | | |
| unspoken, unwritten "good franchisees" | | | | A streamlining technique |
| list.Vendor's of the franchisor can make a | | | | |
| lot of money by working with franchisors. | | | | A way to handle a new employee |
| It's like having a captured market with | | | | |
| guaranteed volumes and sales. Unfortunately, | | | | Someone who will listen |
| sometimes vendors bid so low to get the | | | | |
| account and the opportunity to have that | | | | A time efficient way to attract new |
| captured market that they make very little on | | | | customers |
| each individual franchisee. You should | | | | |
| realize that their money is in the volume. | | | | A mistake which was madeYou can also talk |
| If they help you with too much personal | | | | about the worst customer of the week or the |
| service, then they will lose money on you and | | | | most ridiculous complaint of the year. You |
| the best to hope for is that they'll make it | | | | can tell them a story about 'the customer |
| up with orders from other franchisees.Now | | | | from hell' and they will surely have a story |
| this doesn't mean you shouldn't demand to get | | | | to match. You can both laugh and be thankful |
| what you pay for. It means to demand in a | | | | you own your own business and that wasn't a |
| nice way. Explain your situation in detail. | | | | boss giving you a hard time.Monthly |
| Invite them to your store. Show them the | | | | MeetingsRound up the nearest four to five |
| problem. This may be the insight they've | | | | franchisees and have a monthly meeting. |
| needed not only to serve you better but also | | | | Invite your regional director to join you and |
| your entire system. They may even think of | | | | take notes. Invite a company representative |
| ways to build their units more efficiently, | | | | from the franchisor. The higher up the |
| more practical and less costly. Vendors of | | | | better. Make the meeting low key, a |
| franchisors, once they've landed the big | | | | brainstorming session perhaps. Talk shop. |
| account, want to keep it. After all they've | | | | The company representative will take your |
| probably:Re-Tooled | | | | concerns to the top. Make it a happy |
| | | | atmosphere over a meal. Perhaps pizza. Keep |
| Hired More Staff | | | | it light, with few complaints and lots of |
| | | | solutions (ideas).Vacation ManagementWhen a |
| Borrowed Money | | | | fellow franchisee goes on vacation, they may |
| | | | or may not have a manager that is capable of |
| Restructured Their OperationsIn order to | | | | handling every aspect of their business. As |
| take on the franchisor's business. You | | | | you know it isn't easy. You must be on time, |
| shouldn't use this knowledge to threaten to | | | | keep up quality, keep the store neat, answer |
| go to your franchisor if the vendor doesn't | | | | phone calls, greet new customers, manage |
| give you what you want. That is counter | | | | employees, etc. You might set up an |
| productive. You should understand the | | | | arrangement with neighboring franchisees to |
| vendor's situation as they try to help you | | | | help keep an eye on things while they are |
| and your system.Consultants of the franchisor | | | | away. If you work out a trade, they can help |
| usually work on billable hours. You should | | | | you when you will be away. Also alert your |
| help them with their search for knowledge. | | | | regional director. That way, between your |
| Remember, whatever they recommend to the | | | | manager, regional director and the |
| franchisor might be implemented. So if you | | | | arrangement with your neighboring franchisee, |
| deny them reasonable access to your business | | | | your business will be safe while you're on |
| or purposely hide things from them, you run | | | | vacation.Joint AccountsThere may be times |
| up consulting costs and any recommendations | | | | when you are overloaded with business. An |
| may be worthless. Worse yet, whatever is | | | | order you can't fill, merchandise you don't |
| implemented by the franchisor from the | | | | have, a contact or account that is too large |
| consultant's recommendations will effect your | | | | for you at this time. Rather than losing |
| outlet.Let's say your franchisor has hired a | | | | customers, call a neighboring franchisee and |
| computer consultant to look over the computer | | | | spread the wealth. Your fellow franchisee |
| system and how the franchisees are using it. | | | | will be thankful for the extra business and |
| Chances are your franchisor hired a great | | | | you will have satisfied customers.ReferralsIf |
| computer consultant who bills at a rate of | | | | a customer wants service outside your |
| $200 per hour. If he/she comes to your | | | | exclusive territory or is too far away to |
| store for a scheduled appointment, you should | | | | shop in your store, try to refer them to |
| have your computer turned on and booted up | | | | another franchisee in your system. This |
| and offer them a cup of coffee when they walk | | | | will strengthen your company's good will and |
| in. You should allow yourself free time to | | | | name recognition. It will also make someone |
| talk with the consultant without being | | | | just like you very happy. I'm sure you'll |
| interrupted. You should tell them what you | | | | get referral customers in exchange.Remember: |
| like and dislike about the current system and | | | | When owning a franchise, you are in business |
| what should be improved. By doing this, | | | | for yourself, but not by yourself. Use this |
| you'll make it easy to give input and make a | | | | fact to your advantage. Use the resources of |
| big difference in the computer consultant's | | | | your franchisor, your vendors, your fellow |
| recommendations and save money. Not only is | | | | franchisees. Make your business great. |
| this the ethical thing to do, but it's also | | | | Enjoy your American Dream. And no matter |
| the attitude you need to survive and prosper | | | | what you do don't ever give up. |
| within a franchise system.All franchisors are | | | | Communication is the first step. You're |
| not the same. Some have a very corporate | | | | gonna do fine. |
| attitude and some are very down to earth and | | | | |