Energising franchise networks to innovate isn’t easy – but giving franchisees democracy works wonders

A franchise network can house a collection of diverse opinions under the same brand. But how can franchisors encourage franchisees to innovate without derailing the organisation?

Energising franchise networks to innovate isn't easy – but giving franchisees democracy works wonders

Trendsetting, trailblazing titans like Apple refresh old and launch new products annually to worldwide attention. But whether it’s a new commodity, service or image, implementing innovation across franchise networks isn’t as simple. “Innovation, unless it’s harnessed in the correct way, can damage the brand,” claims David Glover, managing director of Caremark, the homecare franchise. Indeed, franchisees can shoot off on separate paths without the brand in mind if the franchisor doesn’t give direction. “Any new ideas need to be considered, trialled and developed for the benefit of the network as a whole rather than for the benefit of an individual franchisee and their personal circumstances,” Glover advises.”

However, a singular vision is key but not easy to achieve. After all, franchisees expect a degree of autonomy when buying into a network. And while a franchisor’s policy may be holy writ, not all franchisees will agree and may drag their feet where change is concerned. “Just because something is new doesn’t necessarily mean that everyone in the network will jump on board quickly or willingly,” says Sarah Kelly, CEO of Stagecoach Performing Arts, the performing arts franchise. Moreover, it can be particularly tough gauging what will be accepted in big networks. “We have over 350 franchisees across eight countries,” Kelly adds. “Very often a great idea will only suit one set of business circumstances.”

Even essential changes like tech upgrades won’t see franchisees jumping at the opportunity if their coffers are on the line. “Cost can be high, especially when the change [or] innovation is tech related,” admits Kelly. Of course, no two franchisees are the same. And pitching pricy innovations to business owners from different backgrounds and experience levels takes strategy. “It can be a leap of faith for some franchisees to believe the proposed technological development is going to provide a return on investment,” she notes.

Steering franchisees in a fresh direction can therefore be a daunting task. But if a franchisor fears innovation, the entire business is at risk of collapse. “[Innovation] means that you’ll stay in business long term,” says Chris Allison, managing director of Auditel, the cost-management franchise. “96% of businesses don’t make ten years and 15 years on, 98% of brands are no longer there. So I truly believe that innovation is the lifeblood of the business.” Given the rapid pace technology sees markets and competitors evolve these days, innovating is a matter of survival. “In the 21st century, we’re now watching new technologies change the business landscape more or less every other year,” he adds. “So if you don’t innovate you’re going to have new, major business disruptors coming into your business environment that make it very difficult for you to compete.” With that in mind, what can franchises do to stay in the race?

Considering the unique locations and customers a franchisee can work with, no one knows their business better than them. That’s why listening to each one is vital if franchisors want to foster network-wide innovation effectively. Caremark, for instance, has franchisees vote for representatives to achieve this by voicing thoughts alongside the firm’s senior management. “Our network is split into seven regions and each elects a representative to attend a consultative meeting,” Glover explains. “This meeting takes the form of a forum, which acts as a mechanism for any franchisee to recommend innovation and any new ideas.” When franchisors consider more than just their own concepts, the brand innovates for needs reflective of the whole network. And with a thumbs up from franchisees, this comes about quickly. Additionally, franchisees are welcome to offer suggestions through an open dialogue with the franchisor. “This is an ongoing process which encourages a growth mindset,” says Glover.

Not enough can be said for touching base with franchisees to spark mutual lightbulb moments – and it’s achievable in more ways than one. For ActionCOACH UK, the business coaching franchise, participation in the anonymous WorkBuzz franchisee satisfaction survey is one method. “We carefully consider the recommended improvements to implement,” says Ian Christelow, co-founder of ActionCOACH UK. And through social media, even the furthest franchisee is in reach to give their two pennies worth. “We have a closed Facebook group where ideas are regularly shared and best practice is [discussed] at quarterly team meetings held in six locations to reduce travel for our [franchisees],” he adds.

However, not all ideas or changes conjured up by franchisees must be taken as a godsend if they don’t improve the brand. But by evaluating suggestions and taking the time to give critiques, franchisees will learn how to influence the network’s future. “If there are ideas that don’t work, we openly explain the reasons why,” Glover reasons. “This is so franchisees can understand that, as a franchisor, we will always embrace good ideas and reference why a certain idea just isn’t feasible.”

Although, no matter how much discussion franchisors encourage, it’s a given franchisees won’t like everything. But it’s far easier when they at least know what they’re talking about and franchisors have a responsibility to ensure they do. “With any new innovation there is an element of education required for the franchisor and subsequently their franchisees,” says Kelly. That includes providing consistent training so everyone’s on the same wavelength about upcoming adjustments. “Ensuring that there is adequate training for all is essential not only to drive adoption but also to ensure [everyone] is benefitting from the new change [or] innovation.” Indeed, franchisees may be putting their foot down for the wrong reasons, so clear explanation can help prevent any unnecessary friction.

And there’s no better way to win people over than through examples. “Without exception we pilot everything,” Allison says. “As a franchisor you have to pilot [changes], that’s partly what franchisees are buying into – a tried and tested system.” Certainly, trialling initiatives exposes faulty ideas and saves time and money from mass producing them network-wide. But above all, it provides a case study franchisees can tangibly understand and get on board with. “We develop a business solution, roll it out to a client and then we’ve got a case study we can then present to our franchisees and consultants,” he continues. The proof is in the pudding as some of the concepts created are showcased at workshops and regional meetings.

With all this in mind, it’s easy to forge delusions of grandeur about the next big thing for your network. But radically changing your image, product or service for the sake of transformation alone can destroy what made the franchise great in the first place. “Our model is over 30 years old and it works,” Kelly concludes. “We understand that business models need to evolve to stay fresh but we wouldn’t necessarily deviate too far from the original proven model unless it made complete commercial sense for all involved.” It’s therefore crucial to identify reasons for innovation before rolling it out – not the other way round. After all, necessity is the mother of invention.”

Angus Shaw
Angus Shaw