You know what they say about the best laid plans, right? Even with all the research, planning and vetting in the world, franchisees will occasionally underperform in their roles. And when they do, a franchisor will need to take action to protect their brand. Here are four ways to resolve the situation and motivate underperforming franchisees.
As a franchisor, your communication skills need to be top rate, as you’ll sometimes have to handle delicate situations with care. Nobody enjoys an awkward conversation, but if you can get through them smoothly and simply, you’ll be much better placed to support your franchisees and get to the root of their underperformance.
Underperforming franchisees impact the entire franchise business
It might seem dramatic to say, but a single underperforming franchisee can impact your entire franchise business. Their impact isn’t contained to the unit, or units, that they’re in control of, especially when it comes to customer service. After a bad customer service experience, a whopping 39% of customers will avoid a company for two full years [Dimensional Research]. If franchisee underperformance isn’t dealt with immediately, it can negatively impact brand reputation, quality of work and employee morale.
Leading a team that is underperforming can challenge even the most effective leaders. It may seem daunting now, but this is your chance to test your mettle [...]. Embrace the challenge; not only for your own career, but to help make a meaningful difference for your team, and your organization as a whole.
— Chris Cancialosi, Forbes
Four performance management tips for underperforming franchisees
So, what next? What comes between realising a franchisee isn’t performing as well as they could be and terminating the franchise agreement? If you’re committed to doing your job well and supporting your franchisee as far as you can, the answer is quite a lot. Everyone’s had an off week or month, and your first port of call should be attempting to resolve the situation and get your franchisee back on track via performance management and motivation. Here are four ways to do exactly that...
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1. Encourage the production of a business plan
Underperforming franchisees should always be given the chance to improve, unless they’ve done something truly egregious and unfixable. Franchising can be a steep learning curve, and it can sometimes take franchisees a little longer than usual to adjust. Encourage your franchisees to create a solid business development plan when they’re beginning their journey with your company, and to keep updating this along the way. In the initial stages, you can review this plan and confirm that it aligns with the ambitions and long-term goals of the franchise.
If you become concerned about their progress, ask to review the business plan again, and you’ll be able to discover exactly how strongly it’s been adhered to. You’ll get a picture of whether your franchisee is committed and determined but going through a rough patch, or sloppy, forgetful and likely to get worse.
Having a business plan to follow will help your franchisee feel a little less lost in all the newness and responsibility of franchising, showing them an approved path to success beyond your operational guidelines.
It’s like having a blueprint or a solid foundation for your company. Entrepreneurs and leaders know that, like the weather, business isn't static. It changes over time with your business's development. No matter what phase your business is in, drafting a strong business plan and understanding what's essential to it will ensure your success.
— Asha Mankowska, Forbes
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2. Monitor franchisee performance
Monitoring your franchisees, if done correctly, should serve you and them. When you’re paying attention, you can see when things fall off track, and you can determine, early on, what needs to get your franchisee back on the path to success.
The longer you all franchisee underperformance to continue, the more damage it can potentially do - to your franchise business and to the financial and emotional health of your franchisee.
When you monitor franchisees and check in regularly, you know how they’re doing, and they know, most importantly, that you really do care. One of the best ways to motivate is to show appreciation, and to make a person feel valued. In fact, many studies have shown that a happy, well-supported employee will perform exponentially better in their role than a stressed out, ignored employee.
3. Communicate manageable changes and suggestions on a regular basis
If a franchisee is underperforming due to stress, the last thing that will motivate them is a huge information dump of improvements and changes that need to be made. Don’t overwhelm your franchisees, even when they’re struggling. Sit down and decide what needs to be done, and then prioritise tasks. Ask your franchisee to make a few manageable, approachable changes at a time, and observe their progress.
You’ll likely see that your franchisee finds it far easier to meet small but regular demands than they would have done if you’d thrown all the information at them at once. It might seem like the slower of two options, but in reality, it will end up faster, as your franchisee will gain motivation and drive from the regular accomplishment of measurable, micro level tasks.
4. Offer comprehensive training and ongoing development opportunities
One of the biggest advantages of franchising is the extensive amount of training and support available to franchisees. If a franchisor neglects the provision of this training and support, a franchisee is far more likely to underperform down the line. Especially when it comes to franchises that frontload a huge amount of training but don’t follow it up with refresher courses and development opportunities. Initial training should go hand in hand with ongoing training, creating a motivated, informed and driven franchisee.
Prioritise training, and again, you’ll make your franchisees feel seen, heard and appreciated. Rather than criticising or questioning a struggling franchisee, consider offering them some additional training as a first port of call. Create a development plan that shows your franchisee that you would always prefer to grow together than to have to terminate a contract.
Running your own business is a balancing act
Running a franchise means balancing a lot of different responsibilities. At times, this can be overwhelming, and at other times, it can be immensely rewarding. For more franchisor tips to help you navigate the world of franchising, explore Point Franchise. Find out how to make your business more sustainable, or discover the importance of prioritising franchisee satisfaction.
Cara Squires, Point Franchise ©