How to Implement Sweeping Changes in a Franchise System
If change is in your future, talk change, lead change, inspire change and do it with confidence knowing you are building a better tomorrow for everyone involved.
The saying “the only THING CONSTANT IS CHANGE” could not be more true in the business world. To survive and thrive, all types of businesses, including franchises, must innovate to keep pace with advancements in technology, increased competition and shifts in customer habits.
Although implementing major changes can be difficult, it can be especially challenging for franchises. That’s because franchisors must balance the responsibility of evolving so their franchise partners remain competitive with the challenges of bringing the system along to ensure long-term success.
Further complicating the matter is the fact that there’s a certain level of aversion to change in the franchise community. Franchise brands, after all, hang their hats on proven methods, which, if followed exactly by franchisees will likely result in success at the store level.
While every brand has its own set of unique challenges and opportunities when it comes to managing change, all franchisors can incorporate some key best practices to mitigate resistance in the face of new ideas. This allows brands to more easily usher in innovation and improvements that strengthen the business.
Breed a Culture of Change
If everyone in the system is on board with the general concept of embracing change and truly believes in its merits, it will be much easier to introduce new ideas that enhance the franchise. To cultivate this culture, franchisors should manage expectations at the beginning, preparing potential partners for the possibility of changes at the outset of the relationship. There should be frank discussion about the impending trends and issues that may influence the way the franchise operates in the future so there are no surprises later.
Continuing with a culture of change, franchises can instill a respect and understanding of change within a system by proclaiming this a guiding principal or core value of the company. Officially declaring that change is an inherent aspect of the brand’s identity − and why this value is important − the franchisor can encourage partners to become champions of change.
Significant modifications to the status quo are also more likely to be accepted by the entire system if they come from within. At PostNet, for example, we specifically analyze what the top-performing franchises are doing that may be different from others, and then we consider adopting their practices system-wide if it will increase production and profitability for everyone. Often it’s as simple as an innovation or upgrade to a current standard or best practice that inherently works better. Knowing that it works for their peers, franchisees are more likely to welcome the changes into their own businesses.
Involve Franchisees in Change
If franchisors involve franchisees in the process of reshaping the business, everyone then feels as though he has a seat at the table. Whether it’s the CEO or an hourly staff member, no one enjoys being told what to do without having a voice in the issue.
Establishing an environment where franchisees are an integral part of all changes can be achieved by creating councils of franchisees who have self-identified as agents of change. These franchisees have expressed an interest in trying new technologies and ways of conducting business before they are introduced to the entire system.
Allowing these leaders to provide feedback on the strengths and weaknesses of proposed changes also lets franchisors “beta test” anything new. These first-hand accounts of franchisees using new technologies or operations provide a more accurate perspective of the repercussions of the considered changes than anyone at the corporate office could possibly have.
An additional benefit of creating a systematic approach of vetting new ideas through franchisees is that it can give you information, both empirical and anecdotal, that can help explain why a specific change is being made when it’s unveiled.
In business, sudden, drastic changes are typically not well received. That’s why it’s critical that franchisors be as transparent as possible in regard to anything new that may affect franchisees, whether it’s a minor tweak or a complete brand overhaul.
Franchisors can make transparency part of their day-to-day business by openly discussing any potential changes on the horizon with the entire system. Vehicles for communicating potential changes include town hall meetings, weekly email updates, newsletters, message boards and conferences. These ongoing, open lines of communication also create opportunities for franchisees to provide feedback on the impact of any such changes, which the franchisor should take to heart.
In PostNet’s 20-year history, the company has evolved from a consumer-driven pack, ship and mailbox-rental concept into its current neighborhood business center model that serves the needs of small businesses. That type of seismic shift would never have been possible to implement overnight. Rather, PostNet kept franchisees in the loop regarding potential brand updates and new technologies each step of the way to ensure a smooth transition.
Transparency is also crucial at the final stage of the change process. Franchisors must be prepared to show how and why they know the change will make every unit more successful. This involves demonstrating sound research, including commissioned studies, focus groups, white papers, etc., that backs up the short- and long-term benefits of implementing the change.
Knowing When to Part Ways
Even after breeding a culture of change, involving franchisees in the process and being as transparent as possible, there are likely to be a few that don’t share the organization’s vision for the future. Franchisors need to remember they are dealing with people who have invested a great deal of time, money and energy to make the business and brand a success. It is imperative to do as much as is reasonably possible to help those franchise partners see the opportunity that change brings.
Unfortunately, that doesn’t always happen and the most difficult part of managing change is parting ways with people you care about. Franchising in general comes with great responsibility and supporting the best interests of the whole is every organization’s responsibility.
Change can be difficult but if done properly, sure beats the alternative. Dated systems, lack of competitive advantages or value proposition and a diminishing customer base are typical by-products of the inability to recognize the need for change. We all know businesses that no longer exist for these reasons.
Go ahead, plan the research and research the plan. If change is in your future, talk change, lead change, inspire change and do it with confidence knowing you are building a better tomorrow for everyone involved.
Steve Greenbaum, CFE, is CEO and co-founder of PostNet International Franchise Corp. PostNet Neighborhood Business Centers provide marketing services and specialize in meeting the design, printing and shipping needs of small businesses and entrepreneurs. The company has more than 700 locations worldwide. Find him at fransocial.franchise.org.