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Effective Communication is the Hallmark of Successful Franchisee/Franchisor Relationships

Effective communication between key stakeholders is a cornerstone of successful collaboration. People need to be able to talk with one another frequently to share information, knowledge, and ideas, which helps everyone move towards common goals. It’s no less important in a franchised business environment but perhaps a little more difficult due to the complex nature of two interdependent systems working within the same organization – franchisees in their business units and employees working for the franchisor. Understanding how cross-functional communication practices in a franchised environment can help keep both groups informed and connected is essential. Equally important to the franchisee and franchisor's success is creating frequent opportunities to share feedback about how the franchise systems, programs, and tools are performing at the individual unit level.

So, what should you be looking for when assessing the effectiveness of the franchisor’s communication tools and protocols? Let’s take a closer look at how franchisors can collect feedback, share information, and measure progress within their franchised systems.

Franchisee Surveys

A common communication tactic used by franchisors to gauge the overall sentiments of their franchisees, specifically as it relates to the health of the franchisee/franchisor relationship, is to conduct an annual franchisee survey. Surveys are essential tools that measure franchisees’ satisfaction with specific departments, overall communication efforts, and their views on the overall system and its individual units' success. They also provide valuable benchmarking data that can be used to measure progress in these areas year-over-year. Measuring progress helps to ensure that any areas of the system or the relationships within that may have a low satisfaction score amongst the franchisee community are making meaningful progress towards overall enhancements. Like most things in business operations, what gets measured gets fixed.

To effectively execute an annual franchisee survey, the franchisor must have a system in place that ensures each department reviews the franchisees' feedback and sentiments and works to make meaningful progress in enhancing any areas of opportunity. Asking for feedback from franchisees and then doing nothing with the information they provide is a surefire way to ensure the franchisees stop filling out the survey and offering feedback. Strong franchisors ensure that additional communication streams about any potential next steps are successfully deployed by each department after the annual survey has been completed, and all responses have been received.

Quarterly Franchisee Meetings

Another communication tactic commonly used to share information with franchisees about upcoming business initiatives and results are franchisor-led quarterly or bi-annual meetings held virtually, in-person, regionally, or as one large group. Signs of a collaborative quarterly meeting with your franchisor include multiple opportunities for franchisees to have two-way dialogue with the systems leadership team working, offer feedback on the operating system programs and tools, and engage in brainstorming sessions focused on the most pressing opportunities in the business at that time. Be on the lookout for quarterly meetings that are nothing more than a ‘parade of PowerPoint’ presentations, where the head of each department merely downloads the information they deem relevant to franchisees and nothing more. These meetings do little to build a collaborative working culture between franchisees and their franchisor. The same information could be sent in an email or a recorded webinar for franchisees to watch at their leisure. A broader business update followed by smaller round table sessions is much better suited to ensure meaningful collaboration with the system’s franchisees takes place. These types of smaller discussion groups also serve to connect franchisees with one another and enable the sharing of best practices while deepening ties within the franchised community, another significant benefit to building collaborative relationships within the franchised system.

Franchisee Advisory Councils (FAC)

Finally, let’s look at Franchisee Advisory Councils (FAC), another commonly used communication tactic between franchisors and their franchisees. The FAC is most often a select group of franchisees that are asked to sit as a committee to meet frequently with the franchisor to discuss various elements of the business. Most often, the FAC help to gather feedback about proposed promotions or new product offerings while at the same time acting as representatives for specific geographies where they engage with the other franchisees in their area to collect their feedback for the purposes of sharing it back with the franchisor.

For the FAC to be an effective communication body for the system’s franchisees, it’s important that the franchisor provide them with transparent and concise meeting minutes from each FAC meeting. These minutes should outline all the agreed-upon actions and next steps and a summary of the key discussions so that the FAC can share the information with their constituents. Ensuring that the FAC meeting minutes are provided for the FAC members helps the franchisor avoid any ‘selective sharing’ by the FAC reps. A practice whereby some members share certain information with their region’s franchisees but not other information they may deem less important. If this happens, sharing information across the system becomes inconsistent, and some franchisees are left in the dark creating information vacuums, which is also not a good result. So, when digging into your FAC, or inquiring about a potential franchisor’s FAC practices, look specifically for how the franchisor manages the communication flow between the FAC members and their constituents.

Another benefit of the FAC is the ability to collect feedback from the system when needed. Frequent check-ins with franchisees can be very helpful when the franchisor needs a temperature check on new promotions, changes within the supply chain, or broader issues related to economic or political issues that may be impacting a specific region. The way the franchisor collects this feedback is critically important. The best approach is for the franchisor to deploy a survey to the franchisees within each region, allowing them to give feedback to the franchisor directly. This survey data can then supplement the information gathered from the FAC reps in their FAC meeting about the same topic. It’s imperative that the franchisor makes all efforts to ensure that the data collected by the FAC reps and brought back to the franchisor accurately reflects how the collective region feels.

Effective communication between the franchisor and its franchisees is essential. Understanding how communication between these two groups is currently happening within your franchised system will indicate how much collaboration exists between them. Look for communication methods that are concise and transparent and offer opportunities for two-way feedback and dialogue. Communication like this will help to ensure everyone is moving together towards the common goal of franchisee success at the business unit level, as this always leads to franchisor success at the system level.

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