A franchise advisory council is common to many franchise systems, but does it work?
It all depends on how and why the franchise advisory council (FAC) is used.
Chatime’s GM Carlos Antonius says he finds value in the FAC as a way to engage and collaborate with business partners on key strategic projects and priorities that align with business direction.
“The FAC should be viewed as a forum for strategic discussions on business with shared responsibilities by all parties, open and transparent dialogue.
“We don’t subscribe to push down business management style,” he says. “Our approach is to have business partners and or company personnel nominate themselves for election. Our tenure for seats is two years and once nominated they must lobby the wider network for votes which culminates with our national conference and election in February every year.
“The elected members are part of all key trials from NPD to business systems reviews. Parties meet quarterly at central support. And outside these meetings the chairperson arranges catch ups with the parties individually.”
Brendan Green, founder and CEO of Hire A Hubby, advocates for a group that gives franchisees a volice. However, franchisors should be directing the outcomes, he says.
“A franchise is not a democracy. It’s most important to set an agenda and use it.”
Green believes for an FAC to be successful in needs to provide feedback on any issues for head ofice.
For instance, when the mobile-based franchise was committing to a group charity it got the engagement of the FAC members who then took it out to other franchisees in the network. Similarly, with a $2 invoice increase, the FAC became the driving force in getting this over the line.
“We use them for most high level operations issues,” says Green.
There are a number of processes for franchisees to provide feedback to the Hire A Hubby franchise head office, including local monthly cell meetings attended by the relevant field manager.
There are also support group meetings that reflect the business size of the participating franchisees and as the name suggests, are more directed at individual issues.
“It’s as much for guys to get together. They are often corporates who have gone to a working environment of a man in a van. This is another touchpoint.”
To avoid the dangers of time wasting, it’s crucial that meeting chairs are well-briefed on outcomes and purpose.
Hire A Hubby requires a minimum two years as a franchisee for FAC representatives.
9 things franchisors gain from an FAC
According to Greg Nathan, founder of Franchise Relationships Institute, there are nine clear reasons why franchisors benefit from an FAC.
1. Increased accountability
Because FACs encourage more transparent decision-making processes they tend to increase a franchisor’s accountability. This of course means franchisors are more inclined to put better preparation into their decisions and less inclined to fall for the classic 5 Ps – Poor Preparation Producing Pathetic Performance!
2. Improved communication
There is less chance of misinformation being spread throughout the system unintentionally or intentionally by mischief-makers. FACs also save a franchisor’s time by improving the efficiency of communication between franchisees. Instead of the franchisor acting as a go-between, the franchisees can talk directly to each other while the franchisor focuses on other issues.
3. Heightened commitment
By improving involvement and communication FACs improve commitment and a sense of ownership over the brand and the franchise system’s strategies. This is of course valuable because committed people drive sales, contribute their time and energy to improve things and encourage other people to join the system.
4. Receptivity to change
Research indicates that 80 per cent of change programs fail to achieve their goals because of resistance or a lack of buy-in by the people needed to make the change a success. FACs create greater franchisee receptivity to change by promoting involvement, improving understanding of the rationale for the change and ensuring franchisee concerns are addressed.
5. Trust and teamwork
Just as life needs oxygen to sustain itself, trust needs good quality information to exist. And without trust you will find it very difficult to run a franchise system. Because FACs improve transparency and the flow of good quality information between franchisees and franchisors, they promote trust and teamwork between franchisees and franchisor.
6. Less conflict
FACs help to prevent conflict and relationship breakdowns. Conflict can cost franchisees and franchisors tens of thousands of dollars, not just in legal fees but in the wasted time and focus spent on defensive planning meetings, collecting files, writing letters and planning legal tactics. It is a tragedy when you think how this time and energy could be spent more creatively on developing everyone’s business.
7. New initiatives
Successful innovations in a franchise system inevitably involve franchisees in the conception or refinement stages. The power of franchising is in gaining a competitive edge through the sharing of knowledge and resources and the FAC is an effective conduit for this process. In particular we heard many stories of how franchisees had instigated successful new product and promotional initiatives through their FACs. New franchisor ideas that have been thoroughly tested and refined in conjunction with franchisees are also bound to have greater success than half baked ideas let loose on franchisees and/or customers.
8. Increased efficiency
Continuous improvement is inevitable when people are constantly feeding back what is and isn’t working. Think of the leverage that occurs each time a franchisee discovers an improvement to a process and shares this with the FAC who then have it adopted into the network.
9. Improved competitiveness
The power of franchising is in gaining a competitive edge through the sharing of knowledge and resources and the FAC is an effective conduit for this process.