Since the inception of the AAFD in 1992, by far the most frequent complaints we receive are that franchisors have failed to deliver promised ‘support.’ When choosing a franchise, there are many factors to consider, like what your interests, experience, and goals are. But there are some factors every good franchise should have, and high on this list is a successful franchisee support system. After all, one of the main reasons for choosing a franchise over building a business from scratch is the assistance a franchisee can expect to receive from their franchisor. What should you look for in good franchise support?
An Established and Well Developed Operating System
Perhaps the most ‘promised’ and expected attribute of a good franchising system is a ‘proven system,’ and continuous efforts to keep the system fresh, and the franchisees well supported. In his best-selling book, The Franchise Fraud: How to Protect Yourself Before and After You Invest, AAFD CEO, Robert Purvin, is critical of this promise because many franchise systems fail to offer and/or maintain a ‘proven system.’ Indeed, Purvin opines that there is ‘no such thing’ as a proven system, as all great companies must constantly refresh and evolve their operations to meet changing markets. Nevertheless, Purvin concedes that a proven track record of smart and efficient operations, backed by substantial support efforts and systems that promote successful business operations, is a key distinguishing factor sets the top franchises apart from the crowd and the also ran’s.
The top performing franchise systems have a history of developing and offering well-constructed operating systems, ideally achieved through a collaborative effort between management and the franchise network. The best systems are marked by good communications; well-designed reporting that is used to improve the system, and available resources to provide support to franchisees.
Success rates for individual franchises can vary widely, and much of that is based on the level of continued training and support provided to franchisees. Nearly all franchises have some sort of mandatory training program for new franchisees. However, there is great variance in the quality of initial and ongoing training, some only last a few days or a few weeks before you actually begin doing business. Later, when you or your employees need to brush up on your skills or the franchise adds new products or services, with lesser systems you may be left on their own.
A franchise with good support, however, has continuous training programs in place for owners and managers to stay up-to-date and address any issues they may have with new policies or products. Thankfully, the quality of franchisee training is fairly easy to discern by questioning existing franchisees to describe the available training. Although it may be useful to ask franchisees to rate their training, most franchisees are not anxious to ‘air dirty laundry,’ so it is advisable to ask for descriptions of training and support.
Comprehensive Marketing Assistance
Good Franchises have a comprehensive marketing plan that may include national television or radio advertisements, point of sale support and collateral materials, and elaborate marketing programs that describe and guide franchisees on how to reach customers and maximize sales. As part of the franchise agreement, it is common for franchisees to contribute to a national marketing fund. Ultimately, these funds may be allocated at the discretion of the franchisor, but the best franchise opportunities assure franchise input, and may even give franchisees spending authority over a major portion of marketing dollars.
It is important that the franchisor work with their franchisees when planning marketing strategies. Franchisees see the direct effects of great franchise marketing and can tell immediately what works and what doesn’t when they see how many customers walk through their doors. Having the opportunity to contribute ideas and options for a franchise’s national marketing plan is a sign that the franchisor sees its franchisees as partners in profitable business.
A Strong Vendor Program Designed to Maximize Franchisee Profits
Robert Purvin has cited the abuse of a franchisor’s right to dictate a franchisee’s suppliers as the most egregious franchisor conduct. A well supported franchise system will develop a comprehensive supplier network for the benefit of the system franchisees, negotiating best quality and pricing, and negotiating and sharing rebates and vendor incentives that delivers the power of group purchasing that is a promised feature of great franchising.
A sign of good franchise support is the presence of recognized and respected franchise owners associations. These associations may vary from company controlled franchise advisory councils (FAC’s), to autonomous independent associations that are self-funded (FOA’s). The existence of associations that are not embraced by the franchisor may also indicate troubled franchise systems. The AAFD’s primary focus is to foster effective franchisee associations that are embraced as valued assets of their franchise system. Franchisee associations will ideally become negotiating agents for system franchisees, but successful FOA’s will impact marketing, may play a major role in supplier relationships, and will serve a mentoring role for all franchisees in the system. These owners can get together and share tips, as well as war stories, about what has worked for them and what hasn’t. This can be particularly helpful for new franchisees.
Chances are, if a franchisor sponsors one of these associations, they are more interested in what their franchisees have to say. And franchisees who raise their voices in unison are far more likely to be heard.