10 Things You Must Know About FACs

What do franchisees and franchisors care most deeply about? Each year we conduct research to answer this question. One hot topic for franchisees, is the need for more consultation before important decisions are made.

Consultation is not consensus

Contrary to popular belief, consultation does not mean getting everyone’s agreement to a decision, or even involving others directly in the decision-making process. This is consensus, an impractical concept when applied to a franchise network.

Consultation does however involve seeking to understand the needs, interests and opinions of those who may be affected by our decisions. This means we need to ask questions and listen carefully to what people are saying.

And this is where things get challenging. Because when we ask questions, we risk hearing responses we don’t like. Which is no doubt why franchisors often choose not to consult their franchisees; especially if they believe franchisees may have views different to their own.

While this is understandable, it is misguided, especially if a franchisor needs franchisee commitment for a new initiative to succeed. Franchisees who do not believe they have been consulted are likely to feel resentful, and to even resist these initiatives. This is human nature. No-one likes to feel they are being forced to do something that affects their livelihood when they haven’t been consulted.

10 ways to improve the effectiveness of your FAC

Franchise Advisory Councils or FACs provide a structured process that encourages franchisors to consult on issues of importance to franchisees. However they are often ineffective because they fail to follow these 10 guidelines.

1. Ensure your FAC has a collaborative, business development purpose. Too many FAC Charters are full of legal waffle and miss the point that an FAC’s purpose is to improve the group’s competitiveness, profitability, customer satisfaction, productivity and market share. Without a collaborative, business development purpose, your FAC risks degenerating into a gripe session.
2. Have effective and efficient two-way communication processes. Collect agenda items at franchisee group meetings, not by FAC members talking on the phone to individual franchisees. And ensure the franchisor team retains responsibility for communicating policies and decisions back to the franchise network. This is not the job of a franchisee.
3. Have a balance of personalities and strengths. Consider each person’s behavioural style and area of contribution, and make these apparent through open discussion. Profiling of members can be a useful way to understand and value diversity and personal differences.
4. Ensure meetings are simple and facilitated by a capable chairperson. An effective chairperson will ensure no-one dominates and that discussions stay on track. Remember an FAC is a collaborative business discussion, it is not a formal Board meeting or a political committee.
5. Keep agenda items to issues of mutual concern to the whole network. For instance, how to increase sales, improve customer satisfaction, introduce change, decrease costs, fight competitors, etc. Avoid issues that are likely by their nature to create antagonism or conflict, such as changes to royalty fees or addressing problems with individual franchisees.
6. Create your agenda with care, especially with the timing and wording of topics. Use action words to keep the purpose of agenda items and discussions clear, e.g. Explore options on… Share findings from… Decide how to…
7. Keep FAC minutes short, specific and focused on actions. Record the outcomes, not the discussion, and show minutes on a data projector so everyone can see and agree on these. Minutes should not be left for someone to interpret independently and send out weeks later.
8. Be clear on the FAC’s decision-making processes and powers. There is often confusion on this issue, with franchisees wanting a say in how the company is run. This is the job of the leadership team and Board, not the FAC. A smart leadership team will however listen carefully to their FAC, and take their views into account when making important decisions.
9. Ensure senior franchisor executives attend meetings with a genuine preparedness to listen. There is nothing more frustrating to franchisees than executives attending in a half-baked manner while reading their emails, or becoming defensive when their pet ideas are challenged.
10. Encourage the involvement of mature, commercially-minded, well-intentioned franchisees. FACs should not be a vehicle for franchisees to protect their vested interests or to block good strategies that may disadvantage their individual businesses on the short-term. They should also not become a club for larger franchisees to schmooze with the leadership team.

Following these guidelines will help your FAC to maintain effectiveness and credibility in the eyes of franchisees. Good luck!