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