Take the Franchisor Health Check

By Greg Nathan posted July 8, 2019
Someone recently asked me how a franchisor team would know if their business model was sound. This prompted me to put together the following 25 questions. You could call it a best practices health check. If you are part of a franchisor team, this could be a great tool for promoting useful discussion in your next management meeting.
  1. Are you monitoring franchisee unit-level profitability monthly, using an agreed chart of accounts?
  2. Is there a targeted franchisee unit-level profitability percentage that the franchisor team are focused on?
  3. Do you have a remediation program for franchisees who are not profitable after a reasonable ramp-up period?
  4. Do you measure franchisee satisfaction at least annually, share the findings with your franchisees, and have an ongoing improvement plan?
  5. Would more than two-thirds of your franchisees be prepared to recommend your business to prospective franchisees?
  6. Are less than a third of your franchisees wanting to leave your franchise network?
  7. Do your franchisees feel the business is giving them enough flexibility for family or lifestyle activities?
  8. Does your support team understand the franchisee lifecycle and the mindset of what franchisees want?
  9. Is your support team expected to respond to franchisee requests within agreed time frames?
  10. Are you investing in adequate research to stay ahead of threats to your brand and business?
  11. Is everyone in your network clear on your strategic direction and how this will help to maintain the brand’s competitive edge?
  12. Are you consulting adequately with franchisees before rolling out significant changes that will cost them time or money?
  13. Do you have a code of behaviors that help to keep your culture respectful and constructive?
  14. Are members of your franchisor team clear on what they are accountable for, and do franchisees know who does what?
  15. Are you keeping franchisees informed and up to date on important issues and changes likely to impact on their business?
  16. Would most franchisees say your leadership team are fair and trustworthy in how they make decisions?
  17. Does everyone on the franchisor support team go out of their way to make franchisees feel valued and appreciated?
  18. Do your franchisee conferences and meetings involve at least 50% interaction and sharing of ideas?
  19. Does every franchisee know their breakeven point and have a business plan with specific goals?
  20. Is your marketing primarily focused on attracting customers and improving sales?
  21. Are you providing franchisees with the tools and skills to drive customer retention and sales at the local level?
  22. Are you properly pilot testing new initiatives before launching them into your franchise network?
  23. Are you promoting pride and goodwill in your brand by contributing to industry associations and giving back to the community?
  24. Is there an expectation that people at all levels of your network will collaborate, and share data and ideas with each other?
  25. Do you have objective systems for assessing the suitability of franchisees to join your network or expand into additional units?
How did you go? While this is by no means meant to be an exhaustive list of good processes, it has hopefully provided food for thought.

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