How to Manage Your Franchise Systemic Change Effectively

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Franchisors often need to coordinate actions across the franchise community.  

Get buy-in for a new business plan or direction, which while permitted by the franchise agreement, requires more than a mere majority vote to work.

This is the greatest source of value in a franchise system - the ability to coordinate actions that produce or create value.  The business equivalent of the Marching Band - another unique "Made in U.S.A invention".

But having a good idea, if adopted by many operators, and getting many of those operators to try it out are not the same.  Many operators will rightly fear that enough of them will sign on, and so not enough them do sign on - a self-defeating prophecy.

You need a buy-in strategy - a thoughtful set of responses to the objections you know you will hear.  You know you will hear these objections because you have heard them before.

Sometime, you will be in front of your franchise owners explaining both the business problem & your idea for a solution.

There are (3) general ways a group could derail your good idea - even when lots of them think it is worth trying.

 

1.  The group could deny the existence of the busines problem.

2.  The group could accept that there is a problem, but deny your idea is a good solution.

3.  The group could accept your definition of the problem, concede that your idea is a good one, but insist it won't "work here and now".  We are a special case.

 

Sometimes, you will hear words and you won't be sure  of what type of objection you are facing.

For example, the words "We don't have budget for that" could be any one of the three objections.

Before responding, stop and make your attacker explain the concern:  No problem, not a solution, or won't work here.

Sometimes a common type 2 objection runs like this.  "While we agree that there is a problem, your idea is untenable.  It's a chicken and egg problem."

The attacker means to use this old philosophical paradox as a way of saying your solution is impossible.

It is easiest to point out that: We have an abundance of both chickens and eggs, and nobody now cares how that came about.

The attacker may press on.  "But, for your solution to work we need to get more franchises doing X before it becomes profitable.  And just not enough are going to buy-in.  So, your good idea is dead in the water."

You can anticipate this type of attack with a good story about how your Franchise Convention grew, from its humble beginnings.

"Remember, we only had a few stalwart franchise owners who could be counted on to join a regional meeting.  

This attracted only a couple of vendors.  In fact, only the bottling guys showed up.  But, they showed up with a patronage check.

Next regional meeting, we had a few more curious franchise operators - wondering where their check was.

This larger group of franchise operators attracted more curious vendors - who wanted to both sell their products/services, and have a chance to educate you on how to use their products /services.

Remember how the other regions got mad & demanded their own regional shows?  Then, how we "had to have" an annual show - with more than 80 vendors paying, and drawing over 600 franchise operators interested in attending & buying?"

The story show explain that chicken & egg problems do get solved.  That you have solved them before & everyone should have enough faith on this one to go foward.  Systemic change managed.

(Source of Idea - Buy-In: Saving Your Good Idea from Getting Shot Down, Objection 8)

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2 Comments

Almost always the quick, efficient and simple plan to get a franchise system to change fails.

And while the franchisor may have been ever so thoughtful in their communications about the upcoming system change (or sometimes not) they didn't take the time develop a real buy-in strategy.

Joe,

One of greatest wastes of franchise brand capital happened to the Carvel Brand, when the franchisor had to go to war with its franchisees over the introduction of essentially grocery routes.

War was battled in the Courts - mixed legal results. And a disaster for the brand.

And what was the business issue: how much if any was the grocery route worth? And who was the seller/buyer?

Straight forward negotiation problem.

Over in 2 days, couple of months prep.

Total cost; under 100k
Total Value: Happy franchise owners & extended distribution network - Priceless
Total Downside Risk: Better understanding of the problem.

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About this Entry

This page contains a single entry by Michael Webster published on January 29, 2014 11:32 AM.

When is a Franchisor Required to Give a Prospect the FDD? was the previous entry in this blog.

What's New in Las Vegas? is the next entry in this blog.

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