Advisory Dec, 05 2009

Achieving success through networking

A franchise network grows only if a franchisor succeeds in keeping the older franchisees in the network. For ensuring the franchisees to stay in the franchise network, a franchisor needs to carefully analyse the franchise system and fulfil his duties and

By Ramanjit Kaur
Feature Writer
Achieving success through networking

There is no doubt that franchising is a brilliant way to outspread one’s business across the globe. Franchising largely depends upon the skills of the franchisor to grow and maintain its network throughout.  So franchisor must know to build and manage the franchise network efficiently. This article will provide precise information regarding how a franchisor can build and manage his/ her franchise network proficiently.

For a franchisor, managing his/ her franchise network is equally important to building it. A sound franchise network not just clinches new entrepreneurs into it but also ensures good profit making. As Rod Young, E D, DC Strategy says “A good franchising is so much better than independent small business operations but a bad franchising is so much worse,” quoted by Professor Andrew Terry. So, if a successful entrepreneur takes up the franchise route to expand his/ her business, s/he needs to manage the franchise network properly in order to gain maximum benefits.

Basic elements of maintenance

A franchising business works because of its franchisees. Therefore, a franchisor has to manage the franchise network and simultaneously keep on adding new franchisees in the franchise system. As Rod Young says, “No franchisor can grow his/ her network without maintaining the franchise network.” The three important elements that play a significant role in managing the franchise network include:

  • Good franchise relationship
  • Good operating system
  • Introducing innovative products and services.

Building healthy franchise relation

A franchisor has to build a healthy and long lasting relationship with all his/ her franchisees to lay a strong foundation for success. To build sound franchise relations with the franchisees, a franchisor has to take the following steps:

  • The franchisor must provide the required support and back up in order to make the franchise business run successfully. For instance, lending a helping hand in marketing or advertising, managing the staff and train them accordingly.
  • To keep a track of the franchisees’ performance and direct them to improve their performance. For this, a good franchisor often organise meetings with his/ her franchisees to discuss the business operations. In addition to this, a franchisor also has a team of people involved in evaluating the performance of the franchisees.
  • To give special attention to all the franchisees according to their specific needs and objectives. A franchisor must be willing to listen to the compliances of his/ her franchisees and take initiative to resolve them. A franchisor must have a vision and mission for his/ her franchisees to help them achieve their respective goals.
  • To show keen interest in the franchisees’ success. A consistent dealing with the franchisees makes them feel that the franchisor genuinely cares for them.

Innovations in the development

Introduction of innovative ideas would ensure well functioning of business operation smoothly. As Young says, “A franchisor cannot stand still. S/he has to introduce new ideas or concept in his/ her franchising business to keep a pace with customers’ sophistications and demands.” For example the franchisor should organise franchise meets from time-to-time in order to let the franchisees meet each other. Such franchise meets also help in generating new ideas to improve and run the franchise business more efficiently.

Managing a franchise network is a complex process but to run a successful franchise business a franchisor must have the skills and knowledge to manage it effectively. A franchisor has to fulfil all his/ her responsibilities and duties in order to avoid the loopholes in the franchise system that can create problems later. As Dawn Stallwood, Head of Hotel, Leisure and Franchising Team at UK law firm Thomas Eggar LLP says, “A franchisor has to look after his/ her franchisees as they are the route to revenue for the franchisor’s business.”

Related: Rudiments of setting up a franchise

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