Franchising is a privilege, filled with responsibilities. It is
a series of successful habits predicated upon a few great thoughts
implemented by good employees.
Nobody ever said that franchising was easy or that it didn't take
hard work to be successful. The secret that makes the business of
franchising thrive so soundly lies with the people who make it run.
Essential knowledge for any employer is that there are three ways
to get a job accomplished. Do it yourself; employ someone; or forbid
your children to do it. For our purposes, let's look closely at
the employee side of this equation.
Without a quality workforce, an unwavering management team, the
franchising system of business could not provide the excellent price
points, branded quality, consistent training, and elevated efficiency
of service for which it is so celebrated worldwide. Success in franchising
implies optimism, mutual confidence, and fair play. Franchisors
must hold a high opinion for the worth of what they sell and must
feel that the product or service they provide is the best their
employees can produce for their franchisees.
Franchising makes the world a much better place in which to live
and work by acknowledging everyone's success throughout a branded
system. Franchisors have faith in their organizations and their
staffs. They hold a profound desire to help others succeed. Clear,
definite vision and consciousness allow them to generate the fusion
of people working step by step, shoulder to shoulder, pulling together
with franchisees. Without a stable management team and employee
base, the brand would fade.
Today, franchisees pay less attention to what franchisors say and
more attention to what they do. This brings ever more focus on the
franchise system workforce. A dynamic franchisor hires quality people
whom he encourages and enables to become the finest employees they
can be. Those destined for success never underestimate the ability
of their workforce to exceed their expectations as they labor toward
a better tomorrow. A system cannot thrive without admirable management
and well-trained, reliable employees. They help create the business
plan, implement, manage, and revise for market conditions, while
interacting with franchisees daily to improve the bottom line.
Some of the best franchise companies today have turned themselves
upside down to get more out of their workforce. The old top-down
pyramid style management chart does not work well in franchising.
Progressive franchisors encourage and stimulate their employees
to think and grow with the system. All are given more input in what
goes on; from field operations to visionary management, from customer
care to franchisee relations, from new products and services to
The following is some strategy to consider:
- Talk with your employees and invite them to offer improved ways
to perform their jobs. By challenging your employees, you will
learn how your system is working, where it can be improved, and
enable budget reducing suggestions.
- Communicate with everyone and not just people who are responsible
for the particular job. Superior ideas come from many resources.
- Be sincere with your workforce and revere their ideas. If their
opinions are not going to be endorsed by your franchise system,
clarify the rationale for your conclusion or course of action.
- Make everyone accountable for authority. If the pyramid is inverted,
and the majority of people are at the top, this group should have
the ability and influence to help direct the brand.
By giving employees more control over their work environment and
more involvement at running their jobs, you tap into a valuable
source of ideas and productivity. This direct participation pays
off for the franchisees and the brand by building stronger relationships
and an elevated royalty stream.
Employees have responsibilities also. They must excel at their
work while learning from experience. I recall a story once told
to me by an International Franchise Association Board member, a
gray beard if you will, and a founder of a franchise system that
has become an international brand.
Two employees started the same day at XYZ Corporation. Both were
trained in operations and sales, and both were considered hard working
employees. Within a year, one was promoted to a higher position
at headquarters, and the other passed over.
The employee left in field operations felt unappreciated by the
company and became resentful of the other's success. Soon, he presented
a letter of resignation to the boss who was disappointed by the
When queried by his boss, the regional operations director said
he was surprised at the recent promotion of his fellow employee
and could not understand why he had been passed over for advancement.
The boss became thoughtful and said, "Before I accept your
letter, do me a favor and go across the street to the farmer's market.
Find out if anyone is selling apples."
He said all right and started off on this unusual errand. A few
minutes later, he returned and reported to the boss. Yes, apples
were for sale at the market that day.
Then, the boss called in the other employee, the one who had been
promoted, and asked her to do the same favor. She returned to the
office and reported that yes, there was a fellow selling apples.
His name was Jonathan, and he was selling Washington State apples
at $2 a pound, three pounds for $5. She knew that they were tree-ripened,
very sweet, and delicious, for she had tried one. Furthermore, she
reported that the vendor would give a volume discount for any order
over 50 pounds, would pay the shipping charges on an order of 100
pounds, and would guarantee delivery today. She concluded by asking
if there was anything else the boss needed.
The boss said no and thanked her as she walked away. He then turned
to the field operations employee and asked if he still wanted to
offer his resignation.
"No," was the answer as he blushed with embarrassment.
"I now understand your decision," he said, "and I
want to be more like her. Do you think she'd teach me how?"
The boss replied, "Don't think of this as a disappointment.
Think of it as a time-released success."
To put the price of good employees into perspective consider a
unit manager level proxy. The Commerce Department estimates that
it costs approximately $26,000 to replace a manager of a basic small
retail business or restaurant. This number is the primary price
tag to locate, hire, train, and employ the individual. Now, consider
the cost of turn over and multiply that at the franchise headquarters
level. Good people are not cheap or expendable. The direct cost
for replacement is only the beginning of the dour news. Lost time
for objectives, goals, corporate energy, and attention expended
on replacement searches is not only wasteful, but also inexcusably
poor management planning. A workforce that is profitable is also
Healthcare is front and center today. If you are not offering
some form of packaged health insurance to your employees, you will
likely lose them over time. Feeling the colossal weight of escalating
healthcare costs is General Motors, a major franchisor that recently
provided these staggering statistics. GM spent $5.2 billion on health
care in 2004 with $1.5 billion on prescriptions alone for 1.1 million
employees, including retirees. Healthcare accounts for $1,500 of
the cost of each vehicle GM produces. As the business of franchising
matures, healthcare costs are a primary aspect in hiring and maintaining
a profitable workforce. We all need to work more closely with politicians
and lean hard on Washington for attention to healthcare issues or
we risk losing our place within the world market. Our elected representatives
at the Capitol have insurance. They just don't think we need it
as much as they do. Business and employees must speak as one voice
to do something about rising costs and inefficient health services
across the country.
Another problem for U.S. business, particularly franchising, is
the cost of litigation. No other country has litigation costs that
approach those of the U.S. with more than $245 billion a year or
$845 per person. Know what your employees are saying, doing, and
promising. Business must be conducted not only within the realm
of what is legal but also within the realm of what is fair and just
to the franchisee partner. Such actions are grounds for long-term
royalty capitalization and prosperous franchisee relations.
In franchising, our actions create a legacy that inspires others
to dream, to learn more, do more, and be more. All employees must
have the ability to reach for the top, although truly there is no
top in business, only a fleeting moment of market revolution. One
must remember along the course of opportunity that the highest individual
achievements are never solo events. We reach our best mark in life
with the help of others and their belief in us.
Leadership In the workforce is never demonstrated by pointing in
the direction you want to go and telling people to follow. Leaders
go to that place, show the way, and make their case. Instill passion
in your workforce, and let them know it is a mistake to believe
they are merely working for a company. Always strive for employees
to work with you and not for you. Inspire them to trust that they
have more ability than can ever be developed in a lifetime. Help
them crystallize their imagination and let the possibilities begin.
A maxim to consider is that there is no such thing as "best"
in a world of individuals. Everyone comes with his/her own coat
of colors, peculiarities, hits and misses. Talent is never enough.
The best players on a team are the hardest workers. Try rating enthusiasm
above professional skill. A great deal of what we ascribe to luck
is not luck at all. Luck is simply being ready for the chance. It's
seizing the day and accepting responsibility for our future. For
franchising, it's seeing what other people don't see and pursuing
Reproduced with approval from the International Franchise Association
publication, Franchising World Magazine, May 2005.