Franchisee Success – Could it be all in the numbers?

During my first experience working in a franchising company I heard the voiced and common belief that franchisees are happy as long as they are making money. Now, after over 20 years of working in the franchise field, I know that the truth in this statement is not absolute. Although I also have  learned first hand that it always helps when franchisees are financially successful, but for most franchisees there is more to it than just ‘making money’.

I have found that franchisee success has to do a lot with the numbers, yet we must dig deeper. Non financial goals and objectives play an important role, although for some people more than for others. However, there is no question that the numbers are critical and how franchisors deal with them or ignore them can determine the success or failure of their franchisees.

Kate Groom is a franchise expert residing in Australia and her focus is franchisee financial performance. Kate assists franchisors have the much needed conversations around profit, performance, and results. I call these the ‘tough conversations’ because they involve topics outside of the comfort zone of franchisors and the franchisees.

Most franchisors don’t have a financial background, and lack the experience talking about and managing this subject,” Kate said to me in a recent conversation. “The result of this lack of experience is that many franchisees don’t know where they are going nor do they know how to, or even when, they get there.”

I definitely agree with Kate. Franchisees need clear objectives and a way to measure their results. Kate mentioned: “These days technology has provided franchisors with a multitude of ways to gather, benchmark and report financial and operational information. Sadly, however, lots of people get caught up in the process of creating process; and, we make things complicated just because we can.” Kate continued;  “It doesn’t have to be difficult.”

Franchisors like to tell their franchisees that they need to get back to basics. It seems to me that franchisors need to heed their own advice. As Kate says: “It’s easy to get caught up in the ‘wretched hows’ and forget that we can make a difference one conversation at a time, one franchisee at a time. Sometimes a good place to start is with what’s simple and easy to do with what’s available.”

Kate has lots of great information in her blog; make sure to visit it at http://www.starfishconsulting.com.au/