Smooth Franchise Operational Planning with CFE, CLC Maria Haan - Business Stories with Ryan Arcoraci
Get On Board Consulting Founder Maria Haan, CFE, CLC joins host Ryan Arcoraci on the Business Stories podcast to discuss franchise operations best practices. In this podcast, Maria discusses best practices that set the foundation for successful franchise operations and franchise growth.
Getting Into Franchising
Ryan Arcoraci: Someone with your expertise is so important because you've worked specifically in franchise brand operations. Talk to us about your background, how you got into franchising and how you evolved into being an operations specialist.
Maria Haan: I started in franchising in the mid 90s. I was working in the banking sector as a personal banker, and one of my customers was a VP of a national/international direct mail company, which was a franchise system. As I was working with him as his personal banker, he came to me one day and said, "I want to hire you to take my place when I retire." So I kind of laughed and said, "Sure, sure." He told me he was in franchising and this is what we do, and you would be great.
I decided to take a step back and look into what franchising really was. Four months later I left banking behind and I went into the franchising business as an account executive for direct sales for international direct mail. It was one of the best things I ever did, because I embarked on a new career.
When the person who brought me into the franchising world retired, I did take his role. I spearheaded the national sales division for the U.S. and Canada. It was an international direct mail marketing company, and I managed that operations for about four years.
I really wanted to expose myself to other areas within the franchising category. I opted to go into operations consulting with the same company. I wanted to see from a franchisee perspective what it was like to be in the franchising world.
Learning from the franchisees on how to run your business from beginning to end was really exciting, on boarding them, what they needed to know when they rolled out their franchise, how from an operations perspective, how to support the franchisee.
Looking at communications and transparency within the network was very important, and so I was also very involved in the Franchise Advisory Councils for this same franchise system. I did that about seventeen years, and then I flipped into being an executive director for the advisory council for the franchise system.
Developing an Operational Standard for On Boarding Franchisees
Arcoraci: You've got so much experience. I think operations is probably one of the most challenging things within a franchise because there are so many different things going on, so many different personalities and processes that you have to look at. When you work with a brand or franchise, what is your advice for creating an operational standard and how to avoid the pitfalls?
Haan: I am going to answer that from a perspective of my passion for operations. It really comes to the point when a candidate comes through to a franchise system they look at what kind of support am I going to get if I join this family? So they think they are embarking on this new phase or chapter, and they are a deer in headlights. They look to the franchisor and ask how are you going to train me? How are you going to educate me on this process?
As an operations leader, my goal is to put their fears to rest. So I have let them know that there is a formal process in place, and that we can nurture them along the way. And not only from a franchisor perspective, but also be able to share a mentor program, to help them answer questions, train them, guide them, utilize the franchise system.
A really good on boarding process, will really make a successful franchisee. And when a franchisee is successful, the franchisor is successful.
You can develop a franchise system, but if you don't have a strong operations process, you're not going to have a good validation. Without good validation, you're going to have sluggish growth.
One of the first things that I do from an operations perspective is to help the franchisors maximize the franchisee potential. I do a full assessment of the franchisors on boarding process before I do anything else. It all starts there.
You've got to set the stage. I review the existing processes and help identify any gaps that prevent them from fully optimizing the on boarding process.
Some emerging franchise brands may not have an on boarding process yet. I can sit down with them and help develop that on boarding process to help launch their new franchisees to success.
I sit down and collaborate with the franchisor and help them. If it’s an emerging brand, we develop the on boarding process. If it is an existing franchise, I help them find the gaps and enhance what needs to be done. But this done in collaboration and with transparency to create a systematized roadmap.
Franchisee and Franchisor Communications Best Practices
Arcoraci: One of the biggest issues is with communication. How do you advise franchisors to facilitate communication? How do they improve it? What do you recommend for that?
Haan: I’m a big believer in transparency and communication within the franchise network. And I believe strongly that every franchise should have a franchise relations and advisory council.
Now it depends.
If you are an emerging brand, if you’ve got about 20 individual units, that may be a good time to start an advisory council so you can get some input. They can help you grow. They can bring you the ideas that you may not have seen. They’re boots on the ground, feet on the street. They see the things that can help, and they are going to be passionate about the brand.
It is always better to have a franchise advisory council that the franchisor has created while under good relations, than having an advisory council start because of uncomfortable scenarios that may be happening within a brand. I am a huge advocate of franchise advisory councils.
I will say this though, it needs to be a true franchise advisory council, not one that is a rubber stamp for the franchisor’s agenda. Like I said, franchisees bring a wealth of knowledge and can help the franchise brand grow, listen to what they are saying because communication is absolutely important. They will help the marketing, the technology, the operations, the sales, they’re there, use them.
Why Some Franchisees Underperform
Arcoraci: When you look at franchisees, everybody has different personalities, everybody has their own experiences and their own attitudes about things. What do you think is the biggest contributor to some locations underperforming in terms of operations and sales? Why do you think that happens? Is it a breakdown in communication? Is it an attitude shift? What do you think causes that?
Haan: Let me give you a story. I went into a franchise system as a consultant. It was a young brand, but they had a number of franchises. When I was going through the process, I would work with the Franchise Development Director.
We would sit down and we would talk about how this franchise was a great brand. You’re bringing on these great franchisees and awarding great franchisees, and yet there is no real support for them. It’s not consistent. It’s not formalized.
How are we having training that is inconsistent? What is validation like? And we talked about the validation. While the validation wasn’t bad, don’t misunderstand me, it was a good validation, it just wasn’t a great validation.
What we decided to do was to take a look at this process, let’s tear it down, and build it back up. Come to find out, this brand did not have a true, formal on boarding process. They had a piece over here and a piece over there. They also didn’t have the people support for the size of the franchise.
You have to have a point of contact for a franchisee to share or question, someone to come back to. It’s one thing to have a roadmap, but it’s another if you have a roadmap and don’t share it. You have to be there for the franchisee. Not everybody learns the same way. You have to be nimble in the process to make sure everybody learns.
You’ve got to start at: here’s what this person needs to know in the first 90 days of being a franchisee.
Don’t give your franchisees everything at once, because the brain can’t take it. Onboard them in a slower process. Have pre-work. Maybe you have 5 weeks of pre-work, before they come to the corporate office for their formal training. The formal training could be one week, two weeks and then you may have another week in the field.
Give them the pieces that they need when they need them. This as opposed to saying, here’s the manual, read it, come back to me if you have questions.
You’re not going to get as great as success as you could, than if you hold their hand for the first 90 days. And that’s key, because that’s what sets the stage.
How to Build Successful Franchisee Validation into Your System
Arcoraci: I can agree with you one hundred percent on that. People can get overwhelmed when things become difficult, and it’s hard from them to stay motivated. Then it becomes a problem to be successful with it.
One of the things that’s overlooked in franchising, is that they want to sell a lot of franchise units. But they don’t understand that the franchisee to whom they are selling has so many questions of themselves. There’s so many things that they need from the franchisor, and they don’t always get it. They don’t always get enough support and help.
Haan: When a franchisee is awarded a franchise, they are looking to the franchisor and asking “What are you going to give me through this process? What kind of support?”
The franchisor website might say there’s two weeks of training, you’ll get some marketing material, you’ll get this, you’ll get that. If that franchise prospect is going to call around and validate that… if you have any hesitation from an existing franchisee validating [those claims], then the franchise is going to struggle moving to the next level.
But once a franchisee does validate and say “This is a great brand. This is where I want to be. This is the support they give me and here’s why… the operations team steps up to the plate when I need them.”
I can give you an example when I was with a [marketing] franchise brand. One of my franchisees happened to mention that they were putting a [print] piece together and the magnet didn’t get put on the piece. I listened to the franchisee.
Then I happened to go to lunch with somebody from the [print] production side, and they happened to mention they were having trouble with this print piece and they couldn’t get it out.
So I connected the dots and realized that this was my franchisee, that’s what he was saying to me.
I am obsessed with trying to find a way for something to be a positive as opposed to a negative. I quickly called our production facility, the franchisee and the marketing department.
I said “Hey, why don’t we have the option of not putting the magnet on, and have the spot there for a magnet? That way when customer gets that piece, instead of it being magnet that they receive, its a spot where they can use their own magnet to attach to their refrigerator."
The beauty of that is that we didn’t miss a deadline, the franchisee was happy and the franchisee’s customer was very happy. It ended up being a win-win-win all the way around.
You’ve got to be able to listen and hear what’s being said so that if there’s an opportunity to make something a positive you can do it. I consider that crisis management, and we saved probably a million dollars on that account.
Arcoraci: That’s amazing. It’s crazy when you think of something like operations, that something so little or minute can really change things. Sometimes for the better or the worst, it just depends.
Haan: The other benefit was that we looked at how we could improve the franchisor’s organizational efficiencies when it came to certain elements of the brand. It was a great exercise that turned out to be a more strategic plan going forward.
Take Aways for Franchisors
Arcoraci: Do you have any parting words? Anything you wish for people to take away from this?
Haan: The biggest takeaways are if your franchisees are successful then the franchisor will be successful. The franchisees’ success is the franchisor’s success.
If you have underperforming or unhappy franchisees, you’ll have poor validation and the brand [growth] will be sluggish.
Have a formal franchisee on boarding process and know that not everybody learns the same way. You must be able to stay true to the process, yet still be nimble. Review that process on a regular basis. Communicate with your team and update it. And be transparent with your franchisees. Open and honest dialog wins every time to keep the network engaged.
As I mentioned before, I am a huge proponent of franchise advisory councils. They truly represent your network, and again, they’ll keep your franchisees engaged.
I’ll leave you with that. And I truly appreciate this opportunity, Ryan.