In Part 1 of this article, we explored how purpose drives us as humans and underpins the franchisor/franchisee arrangement. Shared purpose increases the chances of a successful long-term relationship.
A Marriage Without a Prenup?
On one level a franchise agreement may seem like a marriage. But on another, the whole relationship is governed by a franchise agreement. Unlike in a marriage, where some people might think about having a prenuptial agreement, there is no prenup! But there’s still a commercial expectation from both parties.
The expectation from the franchise partner is that they’re going to be able to live a life aligned with their hopes and dreams. The franchisor has a commercial reality too. They’re hopefully awarding a franchise to somebody who’s going to deliver the right level of return using the franchisor’s model.
Therefore, a franchisor acting ethically and responsibly should only be earning money on the back of the success of a franchise partner.
Some franchisors just make money from selling franchises. Which ends up as a toxic, stressful revolving door with people churning through without being successful. Morally they’re playing with people’s lives, and that to me is not acceptable.
A ‘No’ Can Be a Good (and Profitable) Outcome
If you’re the franchisor, you need to facilitate deep-rooted conversations right from the start of the franchise recruitment process. But you also have to be prepared to accept a ‘yes’ or a ‘no’ equally. At the outset, you need to get to the truth, not the sale!
I talk about ‘awarding’ a franchise, but there’s still a sale. Somebody is going to invest and purchase something. But if this isn’t right for the person, the caring approach is to say ‘no’. In the past, I’ve had people prepared to invest in the franchise, but I’ve turned them down, as I didn’t think we were right for each other.
It may not be right at a purpose level, but there’s a whole host of other things in there as well. Franchising done well is about taking that responsibility as a franchisor and making sure that you are taking care of the people who are in your care.
Won’t This Approach Limit Growth?
If you’re the franchisor and you only award franchises to franchise partners who are all aligned with your purpose, they are far more likely to deliver a long-term, successful relationship built on openness, honesty, and trust. It may temporarily slow short-term growth, but in the mid to long-term it makes commercial sense to slow things down.
The 80/20 principle comes into play here, because if people aren’t working in alignment the blame culture starts pretty quickly! If you are already an existing Franchisor, you probably already know that 20% of franchise partners cause 80% of the problems for a franchisor, so it’s best not to recruit them in the first place.
A franchise partner may have put everything on the line to sign up. If things don’t work out as they expected, they’ll feel trapped.
I’ve sat with franchise partners who are facing the abyss. Sometimes they’ve been thinking about selling their family home. So, while there are no guarantees, the more you take time as a franchisor and start with purpose, then the chances of success increase dramatically. Of course, you need all of the other things in there in terms of skill sets. With alignment on purpose, people can always be up skilled, as humans are natural-born learners.
Resilience
Resilience is another key ingredient to franchising success. It’s much easier to be resilient if you’re aligned on purpose! Humans are extremely resilient when we want to be: it’s more whether we choose to be resilient in any given situation. If the two parties aren’t aligned it can even result in self-sabotage. Even a low-performing franchise partner knows that what they are doing is contributing to their demise.
Resilience is seeded at the outset of the relationship. You need to be careful about what you place to attract franchise partners, including recruitment incentives and targets, because these things do drive misaligned behaviours. If somebody is incentivised to the hilt to bring franchise partners on board, then very often that will drive their behaviour in an unhelpful way. So, resilience begins with a robust franchise recruitment process.
Several years back we had a multi-disciplinary approach to franchise awards. Different team members were involved in the recruitment process, and each member of the team made an assessment on a set of predefined criteria. So alignment of purpose was verified through a process of triangulation, rather than being solely at the discretion of the franchise recruitment manager.
Some clients have worried that this process might cause them to lose control when managed properly, it’s the opposite. By taking these steps you’re putting the right controls in place. What you get is a better-rounded decision-making process.
And for those that weren’t right, the ‘rejection’ outcome was good for them in the long term, and also good for us as the franchisor.
For those that were the right fit, we also identified the very specific things that they might need more help with during onboarding. So rather than having a one-size-fits-all approach to the initial franchise partner relationship, you end up with a bespoke induction programme which sets the relationship off in the right direction.
I once worked with a franchise owner who described this as taking responsibility for what franchise partners hear, not just what we say. You have to take care to make sure your message gets through in the way you intend.
All these things add up as ‘Tiny Noticeable Things’, or TNTs. TNTs are like dynamite! It requires a lot of TNTs to build a profitable franchise. There are a lot of small deliberate actions you need to do to make sure the relationship works.
As far as purpose goes, the actions you take reinforce what you’re saying. Otherwise, it’s just rhetoric that you’ve decided encapsulates your purpose – but the actions and the experience of dealing with you don’t reinforce that. Your franchise partners will quickly spot if your purpose statement is just a fuzzy bit of marketing you plaster on your meeting room walls. Your actions matter even more than your words.
Purpose manifests in every single thing you do on a day-to-day basis. It drives strategy, it drives business planning, it drives franchise support relationships; it drives everything you can think of that is required within a franchise business.
At every decision point you need to step back and ask: does this align with the purpose you have committed to? Sometimes there will be a temptation to put your pockets first. But when that activity doesn’t align with your purpose, the revenue boost will rarely be profitable in the long term. Adopting this type of thinking can stop you from making mistakes that destroy relationships.
Where is Purpose Implemented?
Purpose needs to be embedded across every aspect of the business, and the first step to be able to do that is actually to talk about it. All discussions, whether it’s employees on a one-to-one basis, or team meetings, should be brought back to purpose. You may become bored of saying the same things, but your colleagues won’t hear the same words nearly as often as you think they will!
The next question is, are your people living and breathing it themselves? Purpose is the culture that is created within a purpose-driven organisation. In effect you are standing up and saying: look, this is how we will be. This is how we will behave. These are the behaviours that we expect. It’s a natural filtering mechanism, because the people who align with your purpose are going to love it and stick around. And those who don’t, won’t!
Simon Sinek argues your goal in sales is to attract people who are aligned with your WHY. This is the people who believe what you believe, including the values that underpin how the franchise is run. The same goes for the people that we want to be part of the franchise support team, or the franchise partners themselves. So, by talking about your WHY, your raison d’etre, your cause, you automatically attract the people who believe what you believe.
Implementing a purposeful approach to franchising takes a lot of small, deliberate daily actions and habits. Often these are the simplest of things. If you happen to have a problem and phone a company, you can tell whether the organisation is purposeful from the way the people interact with you. This goes right to the heart of why purpose is so important. Done well, purpose will drive decisions, even in tricky situations. If your people have been empowered to think about purpose before they decide, chances are they’ll never go very far wrong in terms of their decision-making process. Purpose acts as a guide and North Star.
You can easily tell which organisations that have got this right. Your gut will tell you whether what you’re seeing and hearing aligns with the purpose statement published on the website or written on the walls. Humans are energetic beings – you can feel it straight away. Ultimately, purpose starts at the top and filters down deliberately from there.
In franchising, these issues become even more important because of the problem of distance. Ultimately, you are empowering franchise partners to go out and represent your brand. Everything that you have built as a franchise will be judged by how individual franchise partners behave.
Get Help Uncovering Your Purpose
Uncovering your purpose can be a tricky process requiring good facilitation. It can be interesting through facilitation to uncover what you stand for. Quite often you’ll end up exploring unexpected places!
Going back to Simon Sinek’s work, keep your focus on WHY, not HOW or WHAT. Without facilitation, it’s easy to slip into mechanics and lose sight of purpose. As Sinek says, remember that Martin Luther King Jr stood up and gave the famous “I have a dream” speech. He didn’t stand up and announce he had a plan.
The purpose statement we have created for Franchology® is ‘transforming franchising together’. Those aren’t three words I plucked out of the air, but it’s what I’m inspired and motivated to do, every single day, even when the going gets tough. I honestly believe that Franchisors who are driven by purpose, have an amazing opportunity to make Franchising the number one growth strategy globally!
If you feel inspired to be part of that exciting journey, I would love to hear from you, so please get in touch here to arrange a no obligation coffee and a chat.
