Training franchisees to succeed
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 makes sense that one of the key tempters to buying into a franchise as opposed to starting a private business is having access to the training and resources offered by franchise groups to support an owner through these challenges. As franchisors, it’s in your best interest to offer such services. After all, your success lies in the individual successes of your franchisees.
In the first instance, your role as franchisor is to source people with the talent and skills to run a franchise. But once you’ve found a suitable franchisee, your job is then to bolster their chances of success by optimising the benefits of the franchise system.
Pitfalls of traditional training methods
Most franchisors recognise that not all franchisees are natural leaders before opening their own business. With this in mind, 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, what some franchisors fail to recognise is that franchisees can’t learn everything in a one-day workshop. It takes time, tailoring and investment.
Franchisors can often fall into the trap that the franchise they offer works perfectly for every individual and every environment. This is generally never the case. Each territory comes with its own set of challenges, whether that is competition, demographics or any other quirk of the area in which the franchise operates. It doesn’t always make sense to offer short term, cookie-cutter training solutions to very specific business challenges and expect results. This form of training also encourages franchisees to become reliant on the franchisor as it’s the franchisor that’s assuming responsibility for training and development, rather than nurturing franchisees to take charge of their own success over time.
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 franchisor obtains 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? What can franchisors do to best help their franchisees maximise their chance of success?
Training true leaders – slow harvest style
Recognising that successful franchise owners can’t be created overnight, 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 and profitability across the franchise by improving the performance of Directors (franchisees) and subsequently their salespeople.
• Add value from a franchise perspective by initiating industry leading development programmes.
• Increase financial turnover and profitability of existing franchisees.
• Go over and above the standard ‘stand and deliver’ type training and serve as a strong value proposition to prospective recruits in the market place by demonstrating a long term commitment to franchisee development.
• 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.
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 seven 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 what a significant impact re-skilling of franchisees has had on the rest of the 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 franchisors, making a similar adjustment to your training style is like switching from a mentoring to a supervisory role. A mentor is there to help and protect, but won’t do the disciplining.
One-off training workshops are a nice add-on, 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.
Your franchisees need to learn from their own experience and mistakes. Don’t be afraid to let them know that running a successful business can be hard work, and that they can’t expect the franchisor to offer the answer to every question or scenario. In saying this, the franchisor must provide the tools, training and support to assist every franchisee to develop as a business operator, and to run a profitable business.
As franchisors, it’s important to reflect on where you are trying to get to as a group before you can be clear on what you expect from franchisees. What are your key long and short terms goals and what’s needed from franchisees to get there?
Similarly, get to know the individual challenges of your franchisees and where they’re falling short. Once you know this, then ask - will quick fix training make them better leaders? If the answer is no (and I dare say it will be), it may be time to rethink how you’re spending your franchisor dollars.
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.
Increased performance comes from business leaders who are in control, have clear goals and are motivated to succeed.
Treat training as a way to empower your franchisees to be better leaders, not a token ‘addon’ 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 strong business acumen and financial and legal experience. He is now applying the same principles to his role leading hockingstuart and as a leader across the broader real estate community.