FR.JANFEB13.PG092.pdf
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Issues|Franchisee performance
a franchisor acknowledges that it requires a further investment in the development of their system). Where franchisors can create improvements in their system which save franchisees time and resources, it follows that the time and resources saved can be reinvested by the franchisee to lift the performance of their business. To raise the overall performance level of franchisees, franchisors need first to examine their system to see if it has inefficiencies or other barriers that create a structurally-embedded performance ceiling. Of course not every franchisee will be equally affected by a structural performance ceiling due to each franchisee’s individual combination of skills, attributes and experience, but nonetheless, any kind of systemic performance ceiling will limit the overall performance of franchisees across a network.
THE 3Cs THAT PREVENT FRANCHISEE GROWTH Then there is the performance ceiling that franchisees impose on themselves (rather than have imposed on them by an inefficient system). The self-imposed performance ceiling is the result of the 3Cs: confidence, capacity and complacency. A lack of confidence in their ability to run a business, or lack of confidence in specific aspects of the business’ operation can limit a franchisee’s potential. This may stem from concerns over their own competency to operate a business which should have been identified by the franchisor during the selection and induction process (and again highlights the importance of a highlyevolved franchise system). A lack of capacity where the franchisee cannot devote sufficient time to the proper
Where franchisors can create improvements in their system which save franchisees time and resources, it follows that the time and resources saved can be reinvested by the franchisee to lift the performance of their business 92| FRANCHISING JAN/FEB 2013
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conduct of their business, or at the other end of the scale, the franchisee has dedicated every available moment to the business and has worn themselves out in the process. While a lack of confidence and a lack of capacity are two of the reasons for a self-imposed performance ceiling, the third reason is the most confronting: complacency. Franchisees and independent small business owners who are comfortable with their current income and lifestyle become complacent and operate in cruise control, and no longer feel compelled to operate the business more aggressively. Franchisors can instigate strategies and tactics to help franchisees overcome confidence and capacity issues, but are more challenged to overcome franchisee complacency.
THE SIX SIGNS OF COMPLACENCY 1. Complacent franchisees are generally undemanding of their franchisors when things are going well, but if times get tough they are soon shaken from their complacency and often look to blame their franchisor for their declining fortunes. This indicates that the complacent franchisee is disengaged from their business, and is out of touch with what really makes it tick. They have removed themselves too far from the seat-ofthe-pants existence they may have had when getting the business up and running, but need to be reminded of how important it is to keep their finger on the pulse. 2. Complacent franchisees often don’t appreciate how far off course their business might have drifted until it’s about to crash into an iceberg. Keeping their finger on the pulse requires franchisees to know the key drivers of their business, and to constantly ensure that those driver targets are being met or exceeded at all times. Navigating a successful business doesn’t involve cruise control. 3. Complacent franchisees are accustomed to a financial or lifestyle outcome from their business, but don’t fully understand the range of variable inputs that are required to produce these outputs. Smart business owners live within their means. Complacent business owners expect their business to live up to their means, but don’t always know how to make this happen (largely because they don’t fully appreciate all the key drivers that they should be constantly monitoring). 4. Complacent franchisees are quick to blame their franchisor if something goes awry in their