Operation Key to Success in Franchising Business
I have written about various topics such as how to choose the right franchisee, how to be a good franchisor, what are the various things that we need to look at in a franchising business like finding the right location, having the right branding strategy, fixing the best interior possible without compromising the design and the materials prescribed by the franchisor, having the right HR solutions, having the right marketing and then we saw how a franchise manger need to be in a franchising company and the key role that he plays in helping the brand establish its name in the market. In this issue we are going to discuss how important is the operations of a franchising business and the key factors of a franchise operational manager.
Operations management refers to the administration of business practices to create the highest level of efficiency possible within an organization. It is concerned with converting materials and labour into goods and services as efficiently as possible to maximize the profit of an organization.
Operations manager is a senior role which involves overseeing the production of goods and/or provision of services. It's an operations manager's job to make sure an organisation is running as well as it possibly can, with a smooth efficient service that meets the expectations and needs of customers and clients.
The role of Franchise Operations is to directly manage and implement programs and practices related to the business administration, sales support and financial coaching of franchisees. Areas of mentorship under Franchise Operations may be:
Coaching on business financial plans and projections, many franchisees do not spend money in initial stages of starting the business, some of them spend in the initial stages but many may not spend latter, it’s the responsibility of the Operation Manager or the team to ensure good mentoring is done before they start the operations and in
Coordinating with outside vendors and managing them is a key job of the operation team to ensure all the supply to the franchisee is on time.
Developing benchmarking metrics to monitor the financial strength of franchisees and the franchise systems and making a competition with in the franchisees motivating them and ensuring they all are on track and making profits is the key job of the operation team or the operations manager.
Enhancing relevant business administration components of training programs, in the franchising system. Many franchisors consider training as an expense; however, I am a firm believer that training is an investment in the improvement of the services to the customer or to the individual who works for the organisation. The operation team works closely with the marketing team to understand the needs of their staff across the board and find out the different training needs like Sales, Marketing, and Customer care and product knowledge which is import to sell the right solutions to the consumers. Apart from this it’s important to provide soft skills, computer skills and also language skills as per the need of the franchisee or the franchisor.
Developing continuing education programs related to franchise business administration and looking at the profitability and helping each franchisee to succeed is the challenge of the operation team.
The operation team interacts with logistics, training, Hr, marketing, sales and accounts to ensure smooth functioning of each of these departments to ensure the franchisee gets the due support. Support, Support, Support is the work of the operation team which is also called the support team in some organisation. When promised support fails to the franchisee, the franchisee gets restless and they become very uncomfortable and then the relationship gets strained. So therefore having the right Operation Managers who understand the franchise operation is vital for the growth of the franchisee and the franchisor.
Some franchisors make sure they have 1 support person for every 8 or 10 stores and they will also have 1 technical person to support the franchisee if it’s a tech company to give the best form of support to the franchisee.
The operation manager is the key to the success of the franchisee store, provided the franchisor supports the operation manager to be the fiddle between the franchisor and the franchisee as he needs to mediate with the franchisee and the franchisor which is a tough job.
How do brands fail in operation? Let’s me explain to you the real life stories of the brands that have failed due to many issues of the brand when the operation manager leans towards the franchisee and exposes the company with all the things that are discussed in the board room to safe guard him/herself.
The reason being, when the franchisors fails to full fill the promises made while signing the agreement or during the selling process. The franchise manager may promise the moon and the sun to the franchisee. The franchisee feels that all that was promised will be done. But there are times that there are things which are not in the hands of the operation manager and may not be in the hands of the team which handles them as the management needs to make that decision and it’s so embarrassing for the operation manger to go and stand in front of the franchisee, he has 2 things to do, he has to ensure the franchisor is taken care, that’s where he is getting his monthly salary from at the same time he needs to go the franchisee to collect the dues or royalty.
He needs to ensure that he collects the payments, to protect himself he shares all the information about the company and gets the money. This will not continue, whatever said and done, the agreement is between the franchisor and the franchisee the operation manager is just a middle man. One day this will be exposed and the manager will be a sheep that will go to the slaughter house. But before that the damage is done and the entire story of the company or its weaknesses is spread to the franchise community and it becomes a virus.
To control this damage this takes a long time and by the time the existing manager are replaced and a new team take over it takes time to repair this damage. The brand looks weekend during this time. The management need to understand this and be alert to get the act together and make sure that they educate the operation managers to understand how important they are to the system at the same time the franchisor should be able to help the manger when he comes back from the field with a report to validate and help him/her to serve the franchisee, if this approach is done well the brand will flourish and the operation manager plays a key role in establishing the brand to its highest peak.
However the operation manager is the key to ensure that in the first 6 months the franchisee is able to breakeven, he helps the franchise to understand the operational glitches and help the franchisee with the market understanding and the inside operational issues, like recruitment, logistics, training and other issues related to operations.
The operational manager is also responsible for the P & L account of the franchisee as well for his 10 stores that are given to him to ensure that he works towards the profitability of the stores. The operation excellence of a franchisor depends on the Operation Manager and his team.
The author of this article is Dr.Chackochen Mathai, Founder & CEO of Franchising Rightway with over 28+ years of experience in the field of franchising in India and abroad and has worked with major brands. He holds a Ph.D in Franchise Management. An author, speaker in many of the leading forums and Universities; he can be contacted at +919884051455 or visit www.franchisingrightway.com for more details.