Franchise change and how to deal with it

By Sarah Stowe | 15 May 2019 View comments

How can franchisors best deal with the constant change that is a mark of today’s business environment?

Change can be a response to external factors or driven by internal demands. Either way business owners need to discover the most effective way of implementing new concepts and processes.

The expectations of franchisees can make it a particularly hard call in the franchise sector.

Franchisee recruitment role in change

The head of the Franchise Advisory Centre, Jason Gerhke, says “All franchisors struggle with change for a variety of reasons, but mostly it is because of the inertia they themselves initially instil in franchisees via the recruitment process.

“In other words, if franchisees knew that buying a franchise would involve a constant process of adaptation and change, they would be less likely to resist it.

“However few, if any, franchisors actually talk about the need for evolution of the system – and the subsequent requirements for franchisees to modify how they do things – during the recruitment, induction or training process.”

Gehrke believes that, on the flipside, franchisees don’t consider the way a business may change while they are in the network.

“Franchisees take a mental snapshot of the franchise frozen in time when they sign the franchise agreement,” he says. “Anything that changes after that is in their minds ‘not what they signed-up for’.”

Transformational change in a franchise

And Gehrke points out that who the change agent is will affect the process and eventual success of the change itself.

“Change initiated by franchisees will always be accepted far more easily by the group as a whole than change initiated by the franchisor.

“The reason for this is simple. Franchisee-initiated change is seen as being for the benefit of all franchisees. Change initiated by the franchisor is tainted with the perception of the franchisor’s self interest. So it is often seen as change that is not beneficial to the franchisees,” he says.

Today the franchise regulatory environment is uncertain and there is greater scrutiny. So franchisors are considering changes that may never be required but may benefit their franchisees, Gehrke suggests.

“Should franchisors wait until some practices are required by law before implementing them, or should they lean in to the curve and adopt the practices early, knowing that it will make it easier to comply if they become law later?”

Franchise management forum

It’s a question up for discussion at this year’s Franchise Management Forum, organised by the Franchise Advisory Centre. Franchisors will share practical tips and insights into future-proofing their brands, improving customer service delivery, and boosting franchisee profitability.

Delegates will hear from:

  • Tabcorp on how it increased franchisee profits and sales, while also increasing franchisor revenue.
  • Former RFG CEO Richard Hinson on his efforts to turn around the struggling stable of brands.
  • A Couriers Please case study on the single largest conversion of contractors to franchisees in Australian history. The franchisor will show how it achieved a significant change in organisational culture and performance as a result.