When Is the Right Time to Develop a Franchise Advisory Council?
As a franchisor, at some point your focus becomes strictly on growing the franchise system. If your brand is expanding steadily and healthily, you will no longer have time to communicate with each franchisee on a regular basis. Consider how difficult that becomes with hundreds or thousands of locations spread throughout the country, and you soon realize the need for a mechanism to stay in touch with franchisees.
Since so much of your franchise system growth depends on your current franchisees, you should have a franchise relationship management strategy in place, and it should include a franchise advisory council.
A franchise advisory council provides a voice for franchisees to share ideas and concerns with the franchisor, while also serving as a channel for you to disseminate information to each owner. The council is made up of franchisees representing a cross-section of unit owner demographics, such as different geographic regions, longevity with the brand, sales volumes or other criteria.
When to establish a franchise advisory council is up to you, but doing it sooner rather than later will help set the culture for communication and provide new franchisees the confidence they will be heard. Before setting up your franchise advisory council, there are some questions to consider:
How Much Power Should the Council Have?
The primary function of a franchise advisory council is collaboration so that franchisees have input in the direction the brand is going. And, as entrepreneurs who’ve made a considerable investment in your franchise concept, they deserve to communicate their suggestions. But, the function of the organization is in the name – to advise. Ultimately, however, the franchisor should retain the power to make final decisions. Discounting the advice of your franchise advisory council and franchisees, however, is not recommended as they are in the thick of it every day and probably have the best insight into real-time solutions to current challenges.
You may want to consider allowing members of the council to initially vote on matters. You can then use the results to influence final decisions at the franchisor level.
As is the case with any bureaucratic organization, there are some pitfalls to be aware of:
- A slow-down of the decision-making process on the council level
- Feelings of disappointment if there’s a perception brand decisions were made without considering the council’s input
- The organization may become political
Therefore, it’s important to remind franchisees that they and the franchisor are working toward a common goal, and that the council was established to help reach it. It should be viewed as a means for collaboration and that it has a specific role.
How Big Should the Franchise Advisory Council Be?
It’s up to the franchisor how many members should serve on the council and for how long. But, you should have a fair representation of the kinds of franchisees that are in your system. Council members can either be appointed by you or they can be elected by fellow franchisees. Appointments work best when the council is new. But, since the organization is supposed to empower franchisees, it may be best to allow them to vote in their representatives after the council has been established. You can start with one-year terms for members, with one or two members serving two-year terms. Those members with longer terms will provide some consistency and historical perspective. Typically, an emerging franchisor will start with four to six members, including one from each region – North, South, East and West – and possibly one long-term franchisee.
How Often do You Want to Meet with the Council?
Remember that the franchise advisory council is intended to give a voice to your franchisees, so you will want to meet with the council regularly. Consider allowing the franchisees to decide the frequency – this may contribute to their sense of empowerment. Typically, though, franchise advisory councils meet two to four times a year.
The council should set the agenda for meetings, but the franchisor should be allowed to add items to gain franchisee feedback or to provide news, updates and results.
What is the Franchisor’s Role?
When informing new franchisees about the franchise advisory council, it’s important to be clear about what the council’s function is, how it operates and its parameters.
As the franchisor, you must be sincere about fostering a collaborative environment and receiving input – along with some criticism from time to time. You must listen carefully and consider seriously the needs your franchisees are communicating to you. Be prepared to participate in challenging and awkward conversations with the group. When participating, it’s important to be diplomatic. When responding to tough questions or participating in difficult discussions, it’s vital to remain polite, but firm.
Keep in mind, the existence of your franchise advisory council provides transparency for your existing franchisees, and that can be very attractive to prospective franchisees.
With 30 years of franchising experience and more than 800 franchise owners representing more than 1,225 location for five brands, Winmark Franchise Partners can help you establish your franchise advisory council with keen insight and best practices. Contact us here or at (844) 234-8520.