One of the main reasons entrepreneurs invest in buying a franchised business is the well-designed operating system that has proven successful in the minds of customers and operators alike. Opening a non-franchised company comes with risks around your ability to design an operating system that works and your continued ability to evaluate and update that system as the business environment or your customers’ expectations change.
Investing in a franchise with a well-qualified team of professionals whose sole focus is the programs, systems, and tools required to operate the business model is the driving force behind many folks looking to buy their first franchise.
As an operations professional in the franchised world, I've always found it curious to understand why franchisees would invest their money and time into buying a franchise and then fail to follow the franchisee’s brand standards; it doesn't make much sense to me. If the system has proved successful and evolved into a franchise, not trusting the methods that helped it become successful seems counterintuitive. Yet, I saw it repeatedly across several franchised systems. One of the most important things you can do as a franchisee is to dedicate as much time as is required to knowing your brand’s standards inside and out. What are the necessary steps to deliver a customer experience that will keep people coming back repeatedly, helping you build a solid reputation for yourself in your community?
Most successful franchises have operations manuals, job aids, training materials, and in some cases, training teams that outline their brand standards and service expectations step by step. It’s your job as a franchisee to know them inside and out and to ensure that your employees are executing them consistently across all dayparts your business is open to customers. Failing to do this one critical step will not only jeopardize your customer experience, community reputation, and ability to run a profitable business, but it will also jeopardize the brand’s reputation and the investment and capital of every franchisee within the system.
Franchisors take this commitment to brand standards very seriously. One needs only to look at the franchise agreement to see the penalty for franchisees who breach this part of the contract. It’s common for the franchisor to have the ability to debrand your business, taking down the trademarks, marketing material, and all content related to how the business model operates should you repeatedly fail to execute the brand standards consistently. There are usually three main methods a franchisor will use to monitor execution at the business unit level: various customer feedback programs, operations audits, and third-party quality assurance audits. Let’s take a look at each one a bit closer.
Most large franchisors employ a team of regional managers whose primary function is to monitor the performance of the business units in their region. Depending on the franchisor’s expectations and the size of the regional managers’ region, you can expect at least one, if not two, full operations audits each year. These audits usually entail the regional manager spending a full day in your business unit observing how customers are serviced according to the brand standards. They may also look closely at things like cleanliness, adherence to marketing programs, and the repair and maintenance of core equipment needed to execute the business model. These visits may be announced and scheduled with the franchisee, or they may not, or they may be a combination of both. Regardless, the best advice here is to act as if every day is inspection day. If you take this approach, you’ll consistently score well, which ensures you take great care of your customers and maintain a positive relationship with your regional manager and, ultimately, the franchisor.
The results generated by these operations audits are an important tool your franchisor will use to measure the entire system's health. Overall solid results across the system indicate that operations are running smoothly and that compliance with the brand standards is high. Results like this suggest to the franchisor that the system could handle additional complexity through new and innovative products or that the system could handle extra sales volume through promotions. Both are good things when it comes to driving sales. When the system scores are low overall on operations audits, it can indicate to the franchisor that certain parts of the customer experience have become too complex and challenging to execute, requiring a different method or new approach to that part of the experience. Regardless of the outcome, these tools deliver essential information to the franchisor about the overall consistency of execution, which helps inform their business planning approach.
Another common approach used to measure how consistent your business unit is in customer service is to implement mechanisms that look at service from two perspectives, the first being your online reputation. The second is a more detailed service assessment at the individual customer level. Let’s look at online reputation first.
Several tools exist that automate collecting your business units’ various online reviews. These tools work in such a way that they automatically collect all of your customer feedback daily from websites like Google, Yelp, Trip Advisor, Facebook, and many other websites relevant to your specific industry. They then deliver a summary of the feedback to you, the operator, and the regional manager overseeing your location. The best operators know that this feedback is essential to enhancing their overall operations and take it seriously, implementing actions immediately to correct any issues. They also know that the higher their star rating is on these sites, the more business they will drive to their establishment, enhancing their topline sales and, ultimately, their profit. If you consistently receive negative customer feedback and have an overall star rating lower than the brand’s average, expect to be on the radar of your regional manager and franchisor.
Another common way franchisors collect feedback about the overall customer experience is to use either guest surveys or mystery shoppers. Both tools allow the franchisor to audit various aspects of the service experience in more detail. These tools benefit both the franchisor and the franchisee as the feedback received is very specific and related to different elements of your customer’s experience, enabling you to take definitive action and correct a particular part of the customer experience. This feedback is also important to the franchisor, allowing them to see across the system where operators have difficulty executing to standard. They then can look at how the standard is meant to be performed and perhaps make alterations to ease the process or provide additional training tools or job aides to help enhance execution which is a win-win for all. Failure to execute your business in line with the brand standards jeopardizes your and the entire system’s success, so these infractions are not often tolerated.
Third-Party Quality Assurance
The final method a franchisor might use to evaluate the overall consistency of their business units won’t apply to all franchised systems as this type of evaluation is most commonly used when there are aspects of the operating system that, when not followed exactly as the standard is written can result in significant harm to either the business units employees or customers. Third-party quality assurance is standard in the hospitality industry, as a food-borne illness is a critical concern. Should issues arise, people’s lives could be at risk, jeopardizing the entire brand’s reputation. One need only look at the Jack-in-the-Box food safety issue that impacted over 700 individuals, killing ten and seriously injuring almost 200.
Third-party quality assurance audits are almost exclusively unannounced to the business unit. These assessments aim to understand how the business operates on any given day. They are usually very detailed, especially regarding food safety, and will likely take several hours to complete. The assessors will look closely at your food handling processes from when a product enters your building from a distributor to how it is prepped, stored, and ends up on the customers’ plate. Infractions are not tolerated and can result in the immediate closure of your business if numerous violations are found. Franchisors take these reports very seriously; if you historically perform below the system’s average in these assessments, expect heightened scrutiny from not only your regional manager but also the senior leaders within the operations department.
One of the main reasons for investing in a franchise is to obtain a tried and tested operating system that delivers a solid customer experience and builds profitable sales. In that case, your commitment as a franchisee to the consistent execution of those brand standards is a commitment you will be required to make. If you aren’t prepared to do so, owning a franchise may not be for you. The franchisor often treats repeated infractions in this area in the most serious ways, as it's their primary responsibility to protect the brand and the investment of every other franchisee within the system.