During the development of a franchise system, the interaction and relationship between franchisor and franchisee evolves as the system migrates through the changes. In the beginning stages, when the franchise is first being offered to investors, the principals and visionaries of the company are generally very hands-on, interacting personally with their franchise investors who share the belief that the concept has merit.
Operationally, the franchise system is still in its infancy. The standards are fluid in the franchisor's ability to adjust to the experiences of the franchisee and the ongoing tests of real world interactions. Franchisee input is not only accepted but sought after, since it's the franchisees in the field seeing what works and sharing ideas for improving the concept. These hard-working people largely fund the existence and growth of the franchise and likely feel that they're helping to develop and strengthen the system.
When the franchisor determines that the operating model has been established, every new unit is designed, and the owner is trained to conform to the structured model. New franchisees welcome this model since it provides them with a proven plan for success.
Conforming to Benchmarks
The franchisor must then have every existing unit conform to the stated benchmarks. The process and steps in bringing everyone to the current standard is critical to the plan's acceptance. There can be a backlash from the established franchisees if they don't see the value and financial benefit of converting their business model over to the newer universal system.
As an example, a national retail chain recently introduced its new advertising agency to its franchisees. The agency worked with the franchisor to develop an entirely new advertising manual and brand identity, which was presented to the franchisees. Changes included a new brand logo and advertisements that would be designed and developed by the hired firm. Franchisees were initially concerned about costs associated with replacing the current signage with the new logo at each location.
However, after listening to the entire presentation, the franchisees were pleased with the long-term strategic thinking from the franchisor. The unified advertising and logo not only improved the look and effectiveness of each unit's advertising, but also helps the entire system to realize the national brand recognition achieved only with a consistent marketing message. Franchisee response was...