From Franchisee to Business Leader
This article appears in the July/August 2014 issue of Business Franchise Australia & New Zealand
The decision to become a franchisee as opposed to a starting a private company often boils down to one key differentiator – that as a franchisee you gain access to training and resources to help you get started and navigate your way through the challenges of running a business.
After all, running a business is a tough gig - particularly when tackling it on your own. As many small business owners would know, the title of business owner often translates to ‘jack of all trades’ – manager, bookkeeper, salesperson, marketer - all rolled into one. With so many balls to juggle, it comes as no surprise that 30 per cent of Australian small businesses failed between 2008 and early 2013, according to the Australian Bureau of Statistics.
It’s clear that having the talent and potential to manage a successful business is just one part of the puzzle. Gaining the knowledge and support to achieve it is another challenge entirely.
And that’s what makes a franchise so appealing - it is up to the franchisor to bolster your chances of success by optimising the benefits of the system.
Short term training – a band-aid solution
As not all franchisees are experienced business operators or natural leaders when entering into a franchise group, it has become common practice for franchisors to invest in short term training to help them gain business acumen.
A 2012 Franchising Australia report undertaken by Griffith University’s Asia-Pacific Centre for Franchising Excellence showed that 90 per cent of local franchisors offer internal training programmes, with 40 per cent drawing on external trainers or programmes to assist franchisees. However, most franchisees will appreciate that it’s not possible to learn everything in a one-day workshop. It takes time, tailoring and investment.
As franchisees, you may have come across the trap that many franchisors fall into - the assumption that the franchise they offer works perfectly for every individual and every environment. This is generally never the case. Franchisees know too well that each territory comes with its own set of challenges, whether that is competition, demographics or any other quirk of the area in which they operate. It doesn’t always make sense to receive short term, cookiecutter training solutions to very specific business challenges and expect results. This form of training also encourages you to become reliant on the franchisor as it’s the franchisor assuming responsibility for training and development.
Likewise, every individual who buys into a franchise will be at a different stage in their development. In real estate, outstanding sales agents often look to open their own business after several years of success in the field. In theory, this is the ideal scenario as the franchisee is an experienced salesperson familiar with the ‘ins-and-outs’ of the industry. In practice, running a successful business is a very different scenario to simply listing and selling property. So how should training be structured? How can franchisees and franchisors work together to maximise their chance of success?
Training true leaders – slow harvest style
To support its franchisees to develop the leadership and management skills need to run a business, hockingstuart recently overhauled its leadership training. Late last year we launched a new three-year programme simply called the Leadership Development Programme.
The Leadership Development Programme was designed to:
• Drive growth for individual franchises by improving the performance of Directors (franchisees) and subsequently their salespeople and property managers.
• Increase financial turnover and profitability of existing franchisees.
• Demonstrate a long term commitment to franchisee success by going over and above the standard ‘stand and deliver’ type training.
• Link all programmes into one overall business strategy to give franchisees improved visibility of the bigger franchise picture and develop a sense of camaraderie among franchisees.
• Initiate industry leading development programmes to support franchisee development and place the hockingstuart brand at the forefront of the industry.
Public management and leadership skills training organisation, performancedevelopment.com.au, claims a lack of long-term planning, inadequate financial planning and underestimating operational expenses are among the most common small business pitfalls.
Unlike traditional training sessions, the hockingstuart programme is a long term commitment that aims to familiarise franchisees with the nuts and bolts of their businesses to stop these issues in their tracks - before they become major problems.
We require all hockingstuart franchisees to regularly attend small workshops and report back every quarter on financial, personal and organisational development.
Each franchisee works with trainers to develop business plans that reflect their personal goals and local business needs, with specific actions and delivery dates. From there they are coached in methods to achieve their objectives.
Franchisees are also monitored to assist them to stay on track, undertaking quarterly accountability calls and recharge days to ensure the techniques taught in training are gradually implemented across each business. In the eight months since the programme began, the progress among franchisees has been remarkable.
For many the Leadership Development Programme has been a challenge. We have asked franchisees to step away from their day to day activities of working in the business and instead work on the business.
Despite the challenge, the programme has been met with great acceptance by our franchisees. One claimed it is the best initiative our franchise group has ever offered, expressing “it’s exactly what we need to take our business to the next level”.
Others have noted the significant impact it has had on the rest of the franchisee’s team. We are seeing leaders who are more switched on and responsive to team dynamics, which is helping to improve staff morale. Similarly, setting concrete local business goals with regular health checks is helping franchisees to direct and communicate with staff on what to prioritise and develop, and why.
No ‘one size fits all’ training programme could achieve the same results.
Changing your training tune
For other franchise groups making a similar adjustment to their training style, this requires a shift in the mindset and expectation of franchisees. The difference is the equivalent of being mentored versus being managed. A mentor is there to help and protect, but won’t do the disciplining.
One-off training workshops are a nice addon, but they won’t help much over the long term without any follow up. A supervisor, on the other hand, can be nurturing and supportive, but they won’t hold your hand through every task and will expect results. Franchisees who’ve been in business for a long time will know the only way to realise true success is by learning from your own experiences and mistakes. Running a successful business can be hard work, and a franchisor can’t offer the answer to every question or scenario. In saying this, the franchisor must provide the tools, training and support that assist with developing you as a business operator, and teaches you how to run a profitable business.
As franchisees, it’s important to recognise that effective business development is a twoway street. While your business objectives must align with the broader goals of the group, you should also be communicating with your franchisor to ensure they understand your individual challenges and how they can help.
If a franchisor is investing quick fix training solutions which you feel aren’t making a difference to your ability to run your business, this should ring alarm bells - it may be time to suggest they take a new approach. Increased performance doesn’t come from quick fixes. It’s about looking for long term development to improve the business, increase productivity, reduce burnout of staff and keep staff morale high. That’s not to say there’s no place for short training workshops, but there must be synergy with the needs of the individual franchisee. Franchisees who are in control, have clear goals and are motivated to succeed will perform better than those lacking accountability or a localised plan. Ultimately, training should empower you to be better leaders, and not be treated as a token ‘add-on’ that’s simply expected from a franchise group.
Nigel O’Neil is CEO of hockingstuart, one of Victoria’s largest and most established real estate franchises. Nigel is a qualified Chartered Accountant and has successfully built and grown large successful businesses by leveraging his strategic business acumen and leadership experience. He is now applying the same principles to his role leading hockingstuart and as a leader across the broader real estate community.