Franchisees or franchisors alike should be aware that certain mistakes can significantly impede the progress of your business.
Franchisees frequently alter and add their own products, hours, services and even the quality of their operation without adhering to the franchise agreement. This violates the agreement and could have serious repercussions if not caught promptly.
1. Failing to follow the system
One of the most frequent franchise management errors is failing to follow through with the system. This can happen when franchisees attempt to reinvent the brand or don’t adhere to the franchisor’s established business model, systems, and processes.
To avoid these errors, be open and organized with your franchisees. Give them a centralized location where they can find all necessary materials to run their businesses successfully, such as guidelines and marketing assets.
Furthermore, make sure your franchisees set SMART goals for themselves and their team to help them succeed. Doing this not only enhances performance but also motivates them to strive further. It’s wise to monitor progress closely and discuss it with them at regular intervals.
2. Failing to communicate
Communication is one of the most essential elements in any successful business. Unfortunately, many organizations fail to achieve optimal efficiency in this area.
One common example is failing to communicate information clearly and succinctly. For instance, when introducing a new marketing program or launching an important project, make sure everyone comprehends your goal so they can implement it promptly.
To achieve success, make sure your communication channels are optimized. Research how franchisees prefer to be reached and use that info to craft a strategy tailored towards them. Doing this will help create an effective foundation for your relationship and prevent any communication missteps down the line.
3. Failing to maintain relationships
Franchisors often make the mistake of failing to establish and sustain a dedicated support team for franchisees. This is essential as the number of partners in their network grows, each franchisee needs to be able to rely on their franchisor for advice, direction and full on-going assistance.
Another common misstep franchisors make is not properly screening prospective franchisees before accepting them into their network. This can have serious repercussions in the long run and cause frustration for franchisees who feel unsupported and unable to achieve their business objectives. Eventually, this leads to franchisees leaving their network in search of another provider who provides adequate support.
4. Failing to stay on top of financials
As a franchise owner, one of the most essential tasks is managing cash flow. Not only should you have an organized bookkeeping system in place but you should also monitor supplier payments, customer invoices and payroll separately. You can significantly enhance your business with the correct accounting software, such as QuickBooks. This program helps keep track of all of your finances centrally and alerts you to any problems before they become major issues. Maintaining a well-run finance machine is the key to success as a franchise owner. A reliable system will automate tasks like spreadsheets, freeing you to focus on more pressing matters. Furthermore, effective franchise systems include an effective training program to guarantee employees have the necessary skillset for running the business smoothly and successfully.
5. Failing to maintain brand integrity
Brand integrity is a cornerstone of business success and should be upheld at all costs. When compromised, it may be difficult to regain the trust and loyalty of consumers who may opt to work with brands they know and love instead.
This is especially relevant in an increasingly volatile and competitive market. Misleading marketing messages, product recalls, data breaches, counterfeiting, fake online reviews and other forms of consumer distrust have all taken their toll on brand confidence. Fortunately, there are steps you can take to guarantee your brand stays strong and trustworthy. Here are a few franchise management mistakes you should avoid to improve your company’s brand integrity.