Franchise Business 2015-12-24

How audits can do wonders to franchisors business

To ensure that brand’s franchisee is running premises as per Standards Operating Procedures (SOPs) as given by the franchisor, audits are conducted on regular basis to help franchisors scout for shortcomings and solutions in a best way. Let’s check out wha...

By Chief Sub Editor
How audits can do wonders to franchisors business

Audits play a significant role in every business as it helps the companies to steer clear of any brand dilution, deviation and discrepancy of any sort by a franchisee. Audits help companies to protect their brand’s goodwill, ensuring compliance with franchise agreement, maximising franchisee’s profitability and works well for franchisors as they can easily accomplish their growth plans.  

How audits are conducted?

We spoke to experts from different industries to know what audit procedures they follow for performing audits. Let’s take a look what’s their take on audits and how they do it?

Believing the fact that audits are not a matter a choice but a control mechanism that they have put in place to keep the high standards expected from their franchisees, Sanjay Coutinho, CEO, Baskin Robbins, a division of Graviss Foods Pvt. Ltd informs, “We do two type of audits at our stores regularly –Operations Audit (ROR) – to keep a check on the operational and hygiene aspects of the business and mystery audits to check on consumer service or experience levels.”

At Baskin Robbins’ franchise premises, the operations audit is conducted by their internal team once every month in all parlours in key cities and once a quarter in all other stores. Besides this, external audits are conducted by NSF and the report is sent directly to Dunkin Brands. This is an extensive audit covering IHR (Imminent Health Risk) across nine varied parameters.  On enlightening why perform the mystery audits, he says, “Mystery audits help us gauge service levels at the parlour. This is conducted annually by an external party anonymously and the report given to us to carry out corrective measures. We take utmost care to ensure that our stores comply to the set standards. In case, a franchisee repeats non compliance or failure to maintain high standards results in a warning and then termination of the franchise arrangement.”

Commenting about the key points they consider before conducting audits, Sandeep Ahuja, Managing Director and Group CEO, VLCC Health Care Limited says: “We recognise the importance of quality control in our franchisee-owned VLCC Wellness centres. We provide our own customer management systems (CMS) software to franchisee VLCC Wellness centres, which captures all information of the consumers and the execution of services provided to them. Our teams regularly visit franchisee-owned centre and monitor the quality of their services through observation and training, meeting with consumers, review of data collected by the CMS software and other similar methods.”
VLCC have periodic reporting systems of key performance indicators relating to delivery of services to consumers, such as the number of sessions provided, success rates, weight loss and net promoter score (a management tool that they use to gauge the loyalty of our customer relationships). Based on this, their technical team takes necessary action to provide an enhanced quality experience to their consumers. Whereas at Career Launcher, Chairman & Founder - Satya Narayanan says, “There are two kinds of audits. The first is announced periodic audits to check the operations, management at regular time frame. The unannounced audits happen more as a way to handle deviations, customer feedback that might be specific to a city or a centre.”

Enhancing franchisee’s performance

The purpose of inspecting the franchisee’s performance via audits is to improve operations and identify problems areas and scouting for solutions to boost the franchisee’s performance and having a better control over franchisees.  Adding his views about how audits can be helpful in boosting franchisee’s performance, Sanjay Coutinho says, “The purpose of our audits is to correct the shortcomings. The audit results are discussed with a franchisee and the operations team & franchisee jointlys make an improvement plan with deadlines. Our plan is to train the franchisees to conduct these audits at his stores weekly from next year. These measures lead to more involvement of franchisees in store operations, training and motivation of staff resulting in superior customer service.”

 He further informs, “The weekly sales achievements are measured against the set parameters and reported to the “OPCOM” (Operating Committee consisting of the CEO and senior members of the team). Besides the sales numbers, we also review data of walk-ins, conversions, promo efficacy and SSSG. As a matter of policy, we also review customer comments sent to us directly or as they appear on social media and take corrective action.”  Based on the results of audits, the franchisor can access all information and is able review all problem areas and accordingly support & provide the requisite training solutions to their franchisees.

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