Many from Fox Rothschild attended the International Franchise Association’s Annual Convention in Las Vegas last week. For those of you who have not attended before, it is a massive convention (3600 people this year) where any involved in the franchise industry can make critical industry contacts, discover best practices and more! For more information, go to the IFA’s website at www.franchise.org.
One of the main themes that was echoed over and over again was the importance of open communications between a franchisor and its franchisees. I find that, especially start-up franchisors, or franchised systems that are in turmoil, are afraid to involve their franchisees in open discussions. This may initially not be the easiest way for a franchisor to conduct business, but, in the long term, the speakers gave repeated examples of why it is the best way.
The unapologetic and proud Andrew Puzder, CEO of CKE Restaurants (owners, operators and franchisors of numerous brands including Hardees and Carl’s Jr.), spoke about how the involvement of their franchisees in major company decisions was the best way to gain critical support for those decisions. The Hardee’s brand was in a crisis and, though they met with some resistance, the franchisor worked hard to get all the franchisees behind the innovative and bold moves the company needed to make to get the concept back on track. He stated that the franchisor had to lead by example and prove the merits of the new innovations to the franchisees, which led to adoption of these innovations by the franchisees and grew trust between the franchisor and its franchisees. Trust that resulted in solid, decade-long growth for both franchisor and franchisee. He also spoke about the success of the racy Paris Hilton advertisements (SFW–just a link to Ad Age magazine)–which appealed directly to CKE’s core 18-34 year old male customer and zigged while the rest of the fast-food industry was zagging. Those ads demonstrated that CKE was willing to take risks.
Speakers at the Annual Leadership Conference (which occurs just prior to the start of the IFA Conference) and in many of the other sessions supported these views. The fear that a few unsuccessful, disappointed franchisees may dominate the conversation is real, but, as the speakers pointed out, it is better for those conversations to occur with the franchisor’s involvement than behind the franchisor’s back. A franchisor should involve its successful franchisees in these conversations and use technology to increase availability of information and to structure conversations and meetings with franchisees.
The tips and tricks relating to bettering these relationships and communications can go on for pages and pages, but the point is, the franchisor should consider involving its franchisees and making its system and communications more transparent. Franchisees represent a great pool of talent and ideas, so harness that brain power and creativity and move to the next level!