If you have seen the movie “Collateral Beauty”, in theaters now, you have certainly noticed the elaborate domino formations created by the main character (played by Will Smith). Looking at these masterpieces, we can’t help but admire the painstaking efforts and all the attention to detail that went into these grandiose yet fragile structures. Each domino tile is crucial for the strength of the whole arrangement. Each one becomes an essential element of the composition where it is placed in a fine balance with the other pieces. Standing up, it is a pillar for the growing, expanding domino run; but should it fall, it will force all the other domino tiles down with it.
By understanding the vulnerability and strength of a franchisor-franchisee relationship, we can’t help comparing banners to these domino structures, more or less grand and splendid, depending on the size of a franchise network. While each franchisee is an independent business owner, he still relies on the banner with which he is affiliated. Today, this understanding is all the more important in the world where consumers like taking their opinions to social media sites.
Did you know that while satisfied customers talk to three friends about their experience, angry customers will let twelve people know about their bad experience? And with all the forums, blogs, Facebook, Twitter, TripAdvisor and many other online platforms that invite us to leave comments and rate businesses directly from our smartphones, it happens in an instant! More than 90% of Internet users read reviews before making a purchase decision, and 74% of users need to read 2 to 7 reviews to have the necessary information to judge a product[1]. Moreover, according to a study by Oracle, 56% of consumers will never buy again from a merchant after a bad customer experience[2].
However, for a franchise, the term merchant takes on greater meaning since it applies not only to a single location, but to the entire franchise network. For example, if I went to one of the St-Hubert restaurants and was provided with excellent service, I subconsciously associate the entire St-Hubert chain of restaurants with a pleasant experience. And the opposite is true too.
The strength of a banner does not only depend on the level of customer satisfaction, but also on the wellbeing of its employees, who affect the business health of the franchisee, who then influences the strength of the franchisor… Do you see the domino effect?
All elements are vital for the health of the network. It starts with the franchisor, who builds a strong foundation for a well-balanced franchise network by selecting the right entrepreneurs to be a perfect fit with the banner, to share the core values, likely to be comfortable and happy as part of the network and thus to ensure the prosperity of their business. And when the boss is happy, his troops are much more likely to be happy too, therefore boosting the happiness index in the workplace. This positive attitude will inevitably reflect on their customers too because, just like smiling, happiness is contagious!
However, even a determined and driven franchisee who lacks the necessary business skills may fail to run and grow a successful venture. In this case, the effects will be the opposite: customer experience, employee relations and partnerships with suppliers are likely to take the hit. The poor performance results of a franchisee will also have a negative impact on the market share in the territory where he operates, and the competition may move in to capture the underexploited market opportunities. It would take a lot of energy on the part of the franchisor to rehabilitate the situation, energy that otherwise could be applied to achieve growth across the network.
Moreover, unhappy franchisees can grow critical of their banner. They may taint the relationships between the franchisor and other franchisees in the network, and impair their profitability over time. As a result, networks will struggle in this unhealthy environment, and franchisors will find it difficult to attract new franchisees because the very credibility of the network is at stake. A bad choice of franchisees may also end in legal disputes, which is a costly and challenging experience likely to upset your relationship with your best franchisees and even tarnish your banner’s reputation. In short, failing to take the key selection parameters into consideration when choosing new franchisees for your network may put the continuity and sustainability of your banner at risk. The domino effect…
Of course, the franchisor and the franchisee must accept their respective level of responsibility. In addition to attracting and recruiting the right candidates for the network, the franchisor must build and implement a strong network culture, sound processes and quality business formulas, as well as make sure these are well documented to ensure efficient and effective knowledge transfer. For his part, the franchisee must be self-sufficient and autonomous, and ensure the financial health of his business without pointing the finger at the franchisor in case of any management mistakes.
Moreover, a good prospective franchisee on paper may not be suitable for your particular network. While this step is too often overlooked by new franchisors, it is vital to identify your desired franchisee profile and to implement a franchisee selection process for your network. FlagFranchise.com can assist and help you to determine your preferred franchisee profile, position your banner and promote your brand image among prospects. Our new search platform also quickly sorts and filters its database to identify the entrepreneurs who meet your requirements in order to save you time and money and to prevent costly recruitment mistakes before signing the franchise agreement. Using this flexible tool, you can easily customize the search parameters and target specific selection criteria, thus ensuring better return on your recruitment efforts and optimizing your network’s performance.
Don’t wait till your domino tiles slip and fall, start building your solid system now to become the foundation of your banner’s strength!
Sylvie Grégoire, MBA, CRHA
Présidente, Totem Performance organisationnelle
[1] http://mickaelguillois.typepad.fr/mkgclient21/2012/01/un-client-m%C3%A9content-en-parle-%C3%A0-11-internautes-un-satisfait-%C3%A0-3.html
[2] http://fr.watcheezy.com/quelle-difference-entre-client-satisfait-client-fidele/
