Insider Knowledge: Franchisees Lean On Each Other

Wednesday, March 16, 2011

Over the past five years, Magda Debney has felt pretty confident running the day-to-day operations of her Toronto-based company, a franchised outlet of Grade Learning.

But when she felt she lacked some broader strategic skills necessary to help her company grow, she turned for help to someone who knows her business well: a fellow franchisee.

Ms. Debney is part of a growing trend that is seeing more and more franchisees lean on each other for support.

No wonder. Unlike standalone businesses, franchising comes with a unique support system: like-minded business operators who sell the same products or services to the same kinds of customers and, typically, face the same kinds of issues and concerns.

Having access to and leveraging that collective knowledge means franchisees can avoid reinventing the proverbial wheel and steer clear of costly mistakes.

Gone are the days when franchisees operated on their own, with just the help of their head office.

"That's really old school," says Wayne Maillet, president of Franchise Specialists, a franchise consultancy in Coquitlam, B.C. "We"ve really seen a shift " whereby franchisors are recognizing that franchisees have a lot to offer each other." And franchisors are helping to facilitate those relationships, he adds.

They"re organizing regular meetings and conventions, setting up chat rooms and peer-advisory groups, and developing formal mentoring programs whereby senior franchisees tutor newcomers, Mr. Maillet says.

"Franchisors recognize that those relationships are going to happen, regardless, and that they"re better off being part of the conversations," he adds.

That's certainly the philosophy at Grade Learning, a Toronto-based franchisor that provides education and training, including tutoring and high school credits, to students and adults through its 45 Ontario outlets.

"We"ve always thought that everyone working together provides a sort of cross-pollination," president Michael Bateman says.

To encourage such collaboration, the firm hosts monthly meetings for franchisees, as well as an annual conference.

Two years ago, it also introduced a mentoring program that connects seasoned franchise owners with new ones, Mr. Bateman says.

"We got a lot of buy-in from franchisees. We found that people were prepared to invest the time," he adds.

Ms. Debney didn"t hesitate to take advantage of the mentoring opportunity. Wanting to sharpen her skills in " things like planning, marketing, forecasting," she was matched with Rosanne Masi, a 16-year veteran owner of a Grade Learning franchise operation.

The two met formally for one hour a week for four months, hashing out everything from business plans to time-management skills.

One of Ms. Debney's biggest challenges was how to develop a business plan. "I didn"t know the components of a plan, what it should look like," she says. Through the ongoing mentoring sessions, she learned about marketing strategies, business forecasting and identifying potential market segments to target.

While Ms. Debney says the sessions didn"t translate into immediate revenue growth, "I am more aware than ever of where my business is going," she says.

"I know what I need to do to sustain and grow my business, and, if you asked me that prior to this, I wouldn"t have been able to say that." As a long-time franchisee, Ms. Masi says she regularly fields calls from other fellow franchisees, too. But, she says, the learning goes both ways.

"Sometimes I"m the one making the call, because some issue has come up and I want to get some advice." Adele Group Inc. , which operates Adele Maids, a home-cleaning franchise based in Quebec City and Ontario, prompts franchisee interactions by asking senior owners to provide part of the initial training for neophyte owners, says Trevor Breslin, principal of Adele Ontario.

The pairs spend about three days together. That typically sparks relationships for the long-term, he says.

Annual conferences are another way that franchisors help build links between franchisees, says Lorraine McLachlan, president and chief executive officer of the Canadian Franchise Association.

While conferences aren"t new, she says, more franchisors are recognizing not only the learning value but also the networking opportunities, and are actively encouraging their franchisees to attend.

Shari Westman, an Ottawa-based franchisee of Dayton, Ohio-based CK Franchising Inc.'s Comfort Keepers operations, which provide in-home health care for seniors, says she's an eager participant of the company's annual system-wide conferences in the United States.

While she finds the learning seminars valuable, the main attraction is the opportunity to meet hundreds of her counterparts, she says.

"You meet and talk and learn how they"re moving their business forward. You feel less isolated, and relationships just develop from there," she says.

Ms. Westman also taps into the collective wisdom and experience of her 650 counterparts in North America by posting queries online in the company's chat room when she's looking for advice.

She says she also typically makes at least four or five phone calls a week to colleagues, whether it's for marketing advice or for a contact that she needs. "They know that I"ll answer their questions, too." Another strategy that has allowed Ms. Westman to take advantage of the knowledge of her fellow franchisees is Comfort Keepers" facilitated coaching calls. Once a month, Ms. Westman speaks with a professional coach hired by the company, who often refers her to colleagues who have previously dealt with an issue that she is juggling. "He"ll say, "you need to speak with so and so in Windsor, he just went though this a couple of months ago."" Later this year, Ms. Westman will join one of Comfort Keepers" "performance groups" "" small peer-advisory groups comprised of about 10 franchisees who meet quarterly. Similar to a board of directors, the group helps each other identify and set goals. Then they hold one another accountable for meeting them, Ms. Westman says.

Of course, there can be challenges when franchisees build direct relationships, Mr. Maillet says. "You might see some franchisees going down the wrong path, for example, when a weak franchisee gives someone the wrong advice." One disgruntled franchisee could also negatively influence others, Mr. Maillet adds. But when franchisors help facilitate those conversations, they can head off any potential problems, he adds.

For Mr. Bateman, the advantages of franchisees working together far outweigh any potential negatives.

"It's an easy benefit. It increases the franchisee learning curve and reduces the number of mistakes. And the whole team benefits when everyone is doing well."

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