Franchisee Support Models: Does One Size Fit All?
Previous and somewhat rigid approaches to training and fees may no longer be relevant.
In a franchise prospect’s ideal world, franchise opportunities would be custom fitted to suit one’s individual needs. Franchisors would offer customized training programs geared to their level of experience and knowledge in the given industry, and their franchise fee would be adjusted accordingly.
The very foundation of franchising is to create a system and model that is easily duplicated. However, not all franchise prospects are the same. Some may have come from an entirely different field or industry, but still have some basic experience in operating a business. Other franchise prospects, however, may have the opposite scenario. Some may have extensive experience and knowledge in both business management and operations and the given industry.
Most restaurant brands tend to attract those with food-service experience, but those same franchisees typically have little to no experience in business operations, marketing or human resources. More often, however, franchisors tend to attract people with an entrepreneurial spirit who come from families who operated their own businesses and have desires to do the same, but they may know little or nothing about the specific industry.
Take, for example, John Doe, who managed his father’s auto shop for 20 years. John clearly knows how to run a business, but he’s tired of the automotive industry. He looks into franchise opportunities in the fitness, health care and business services industries. In his new endeavor, John will need less support with business operations and more training on the industry, including but not limited to its history, current trends, target demographics and specific jargon.
Support levels in a tiered model do not need to be exclusive as this model works best with a fluid continuum.
Historically, when it comes to initial and ongoing training support for franchisees, as well as determination of the franchise fee, franchisors have traditionally stuck to a one-size-fits-all approach despite the varying needs and backgrounds of their franchisees. As the economy and marketplace conditions have changed, the time has come for franchisors to consider evolving. The notion of their previous and somewhat rigid approach to training and fees may no longer be relevant.
What’s the answer? While franchisors can’t realistically tailor their models for every prospect that inquires about their opportunity, there is a middle ground.
For example, BlueGrace Logistics’ franchise model is based on a fluid continuum of three, tiered support levels. With our guidance, franchisees can pick and choose exactly what support and training they need and want from our corporate office. Franchisees can select from minimal support to full service, which includes back-office, customer service, billing, marketing, extensive ongoing training and more. We also allow our franchisees to change their support levels as needed. This way, individuals with little to no shipping and logistics experience can receive full-service support to help them get started and then scale down their support whenever they choose.
Of course, in the mind of a prospective franchisee, what would be the point of selecting a minimal support level if you had to pay the same franchise fee as someone with maximum support? There’s not. Thus, with a flexible support model, also comes a sliding franchise fee, because no one wants to pay for the extra bells and whistles they’re not using.
With a flexible support model, also comes a sliding franchise fee.
Consider This First
Before jumping in, franchisors considering adopting this more flexible tiered approach should think about the following guidelines.
- Analyze your current system. Take a look at the support currently offered to franchisees and determine if your franchisees would benefit from a more flexible model. Are franchisees using the support provided and taking advantage of training opportunities? Are they receiving support that could help make them more successful?
- Be flexible. It is important to remember that flexibility is a key point to making this model work. Support levels in a tiered model do not need to be exclusive as this model works best with a fluid continuum.
- Don’t compromise your brand identity. Be customizable, but make sure to keep your original branding and operational systems in place. Customization and flexibility do not equal free reign. The goal is to provide more options to franchisees, within the boundaries of your system.
- Do not over or undertrain anyone. Ensure that franchisees are selecting the correct support level for their needs. Most often, your organization does not want an industry newbie starting a business with minimal support. Doing so could be detrimental to his or her success and the entire system. On the other hand, over supporting and over training seasoned veterans could lead to distrust, feelings of being micromanaged and general dissatisfaction.
- Keep it simple. Too many choices can be overkill and overwhelming.
Time for Change?
While this tiered approach may not be suitable for every system, it poses multiple benefits for most and creates a winning situation for both franchisor and franchisee when implemented correctly. Franchisees pay for the support they choose, and franchisors can allocate resources where they are needed most instead of wasting time and energy providing excessive support to people who may not need it.
The ultimate goal of course, is providing your franchise system, no matter what the industry, with the appropriate tools and options to generate franchisee success and satisfaction.
As the old saying goes, “The more things change, they stay the same.”
Bobby Harris is the founder and CEO of BlueGrace Logistics, a logistics, transportation and technology provider that offers complete, customized transportation management solutions to customers throughout the United States. He can be reached at firstname.lastname@example.org.