The following is a reprint from Franchising World, February edition page 81-82.
By employing the "extended enterprise" #LearningManagement concept, franchises could enjoy leaner inventories, need less working capital, gain earnings and productivity, and deliver better customer service.
By Sonia Gottfried, Latitude CG
Franchises have the dilemma of overcoming a variety of training challenges. Franchisee employees are NOT franchisor employees and cannot be treated as such. This makes it difficult to implement new products and practices.
The most rudimentary and important practice in franchising is to replicate the product/brand on a reliable basis with as little variation as possible. Customers want to know what to expect. Capitalizing on Extended Enterprise Training makes for a successful franchise business model? The franchises that do training right are seeing the most success.
Effective franchises understand extended enterprise concept and tend to have leaner inventories, lower working capital, higher earnings and productivity and overall better customer service.
Using the Extended Enterprise concept the challenge is done together with both the franchisor and franchisees. The easy part is realizing the importance of training. The more difficult part is choosing the mechanisms motivate and convince franchisee employees.
“Appropriate training can lessen the cost and time, it will help in the spread of information across wider geographic area and your business is growing beyond the capacity of the current staff,” explained Jeff Walter CEO of Latitude Learning.
This past June, International Franchise Association sponsored a Franchise Expo in New York City. Hundreds of franchises were represented and all were eager to talk to potential franchise buyers. There is no doubt that training is an important element to franchising. However, as most prospective business owners scoured the aisles of the expo, thinking about training was not at the top of their list of questions to ask.
Joseph Lucas of the New York area, researching potential franchises to invest, explained that the training component wasn’t an important question to ask because he believed the franchisor would make sure to train him. “I expect training from the franchisor in the form of hands-on training. I would want more than computer or print training material. I believe hands-on will prove to be the most successful.”
According to Kimberly Daly, Consultant for FranChoice, prospective franchisee owners feel pigeon holed into an industry or type of company based on their previous experience. “However, looking into the franchise industry, the world is their oyster. But knowing this, a solid franchisor partner will have initial and on-going training and even field training to help franchisees become confident and efficient owners,” explained Daly.
Franchises are training machines. It is vital to the success of the franchise is the branding and operations are replicated perfectly. In reality franchisors have a variety of training avenues that have proven successful. The most common thread is field staff, according to Marla Rosner, Senior Training Consultant at MSA Worldwide.
Part of the franchise organizational infrastructure is field staff representatives. Generally they operate out of the corporate headquarters. The bigger the franchise, the more field representatives are required.
“Field support can be a great advantage to a new franchisee. Most people who invest in franchises have little to no experience within that industry (they bring general business skills: sales, management, operational skills), and that is the great thing about a franchise; that you do not need experience to be successful, said Daly.
Daly explains that there are difficulties to recognize, “Field training can be very helpful because it affords situational learning: your equipment, your store, your customers. It is one thing to train at a corporate office that has been running smoothly for a long time, but quite another to be trained in your brand new start up store where those quirks and efficiencies haven’t yet been ironed out.”
According to Rosner the roles of field staff representatives include.
From cutting hair to the automotive industry, field staff is a critical part of training and replicating the business model.
Hands-on training and field staff support is not unique to the franchise industry. Business practices and products are being added regularly, not to mention the need to stay up on the times of technological advancements.
“A fundamental factor for success in the franchise industry is training,” said Jeff Walters CEO of Latitude Learning. “We are noticing a revolution in the relationship with extended enterprise. The franchise industry wants more than just the traditional business model. Their business savvy instinct that got them in the franchise business is the same perception that allows them the deep need to grow and change,” said Walter.
As stated earlier, employees of franchisees are not employees of the franchisors and cannot be treated like co-employees. Therefore, a system needs to be in place that will entice positive work ethics.
One strategy that has established successful is incentives. Incentivize the behavior. This can be in the form of points, money, products, etc. One strategy that has proven successful is incentives. Incentivize the behavior. Franchisors can reward positive performances or behaviors with points, money, products, etc.
But don’t stop there. According to Jeff Walters incentivizing the behavior combined with metrics can prove for a concrete and successful business outcome. “Using metrics drives performance by using solid and reliable date to ensure goals are being met and parameters are on track. Metric are great at tracking performance and measuring a variety of specified behaviors,” said Walters.
Numbers are hard to argue with. It makes the field staff’s job easier when they can show specific data to back their procedures. If they can show that when a franchise does xyz and the outcome is leaner inventories, lower working capital, higher earnings and productivity for a franchise of similar location size and territory, it makes arguing those numbers difficult. In turn, the field staff has the tools at their fingertips to convince the franchise owner and their employees to following the protocols of the franchisor’s recommendations.
About Latitude CG
Latitude CG, home of Latitude Learning, an industry leader that drives performance through training, communication, measurement, incentives and consumer engagement. Latitude is a technology first company striving to ensure that customers get the full benefit of the underlying systems and solutions that they are investing in. With the continuous change in platform capabilities and emerging trends such as mobile, it is important that organizations have a solid foundation to operate from.