A fundamental aspect of the sound management of a franchise network is without a doubt the communication mechanisms and tools put in place by the franchisor to promote a true and timely exchange of relevant information as well as (ideally constructive) criticism, ideas, comments and suggestions.
The methods and processes of information, communication and exchange within any franchise network (and even more so within a network operating, or wishing to operate, under a "strategic partnership" model) must, first and foremost, be clear, well structured, known (especially by franchisees) and understood.
There are a variety of traditional mechanisms and means by which a franchisor can communicate with, motivate and obtain the co-operation of its franchisees.
To date, these means have primarily included:
- Bulletins, guidelines, memoranda and other written communications (or, more recently, in audio or video formats) that are regularly sent by the franchisor to its franchisees;
- Meetings (one-on-one or in small or medium-sized groups) between the franchisor's management team and its franchisees;
- Meetings, social events, conventions and other gatherings of all, or a large group, of the franchisees to inform, educate and entertain the partners in the network, and often to recognize, in various ways, an outstanding contribution by one or more of the franchisees;
- Various committees, working groups and advisory boards that bring together franchisees and officers of the franchisor for the purpose of discussing and exchanging, on a regular basis, topics of interest to the franchise network as a whole
- Various meetings and training and information sessions for franchisees and members of their staff; and
- Conference calls aimed primarily at informing franchisees of recent developments and decisions, initiatives and projects of the franchisor.
Although for most franchise networks these means will remain relevant in the post-COVID-19 world, it would be advantageous to review their operation and adopt new ones that are even more efficient, effective and flexible.
Indeed, in the post-COVID-19 world, close collaboration, speed of communication (both ways), efficiency in implementing changes (since there will have to be several changes to be implemented within a short period of time), accessibility and flexibility will be the keys to the success of our networks.
These new communication tools within franchise networks should be:
Fast
The speed at which information is shared and monitored, including as to the evolution of the situation experienced by the franchisor and each of its franchisees, will be paramount both in the timely making of appropriate decisions and in the effective execution of those decisions.
Ideally, the means of communication should allow both the franchisor and each of its franchisees to know, in real time, what is happening within the network and in its environment, as well as what is coming for them.
Truly multi-directional
The days of one-way communication from the franchisor to his franchises are over.
Franchisor-franchisees communication must now be multi-directional (franchisor-franchisee(s), franchisee(s)-franchisor and franchisee(s)-franchisee(s)).
Accordingly, these new communication tools should permit franchisees to express easily, openly and promptly their ideas, concerns, views, recommendations, criticisms and comments with respect to communications received from the franchisor or other franchisees and, in general, facilitate and encourage communications from franchisees as well as from the franchisor.
Accessible and flexible
It is often difficult (and expensive) to bring together many franchisees and several executives of the franchisor in one location or even at one time.
Even more so, in the post-COVID-19 world, travel is likely to be limited, and more complex, for several months.
The new means of communication will therefore have to be accessible from various locations and at various times, which implies the use of various technological tools, whether by videoconference, podcast, interactive webinar, private page on a social network, private social network, communication platform, etc.
They could therefore include both meetings (in person, while respecting the rules of social distancing over the next few months, by conference calls or by technological communication tools) and various means of accessing these communications both at the time they take place and at any time thereafter.
Simple and user-friendly
Obviously, the simpler and more user-friendly they are, the more quickly these new communication tools will be adopted and the more frequently they will be used.
Economical
Let's face it, many businesses, including franchisors and franchisees, will emerge financially weakened from the COVID-19 crisis.
This is therefore not the right time to acquire and install costly new systems, even when these investments could be profitable in the long term.
At this time, franchisors should be looking for systems that are fast, efficient and... economical (both for themselves and their franchisees). Franchisors can always later upgrade these systems to more expensive systems when their financial situation, and that of their franchisees, warrants it.
Despite this, the implementation of adequate communication tools that meet the criteria described in this bulletin cannot wait since the importance of rapid and effective communication within a franchise network is immediate.
Interesting and stimulating
Finally, communication tools within a franchise network should be interesting and stimulating in order to promote their optimal use.
In order to meet this objective, one can think of various incentives and means of motivation, including, for example, exchanges of a more social nature (such as virtual happy hours), various simple surveys of interest to the network, the search and open exchange of creative ideas, the constitution of special interest groups on a platform, a site or a private social network, etc.
More generally, one of the best ways to stimulate your franchisees' interest in communicating more frequently and openly with the franchisor is to ensure that their communications are responded to promptly and that their comments, ideas, recommendations, fears and criticisms are truly taken into account by the franchisor.
Obviously, the communication tools within a franchise network must be adapted to the characteristics and resources of each network and evolve with it. What is appropriate for a young franchise network with a dozen or so franchisees located in the same region is not at all what is appropriate for a network with more than a hundred franchisees located in many different markets.
A good way for a franchisor to design and implement new communication tools that are effective and really useful within its network is simply not to try to do it alone, but in collaboration with its current franchisees. This will allow the franchisor to obtain a greater number of ideas and suggestions, while at the same time establishing a better collaboration with its franchisees and getting them to adhere to the tools put in place at the end of this exercise (since they will have participated in it).
Fasken has all the expertise and resources necessary to help you better manage your communications with your franchisees and to draft agreements that are complete, adequate and, even better, well adapted to your objectives, needs and resources, in order to properly protect your rights while avoiding potential pitfalls.
Originally published April 28, 2020
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.