This article by Tom Spadea was featured in the December 2021 issue of Franchise Dictionary Magazine.
Legal: The Fundamentals
Why do customers buy from your franchisees? That should be the question at the root of every decision a franchisor makes. Does the system continue to deliver the brand promise that created the original profitable unit that pushed the founder into franchising?
As a franchise attorney, it is very easy to get lost in the weeds on the technical side of the franchising world. But I always like to bring it back to the real reason behind franchising, a pathway for exponential expansion of the brand to deliver the brand promise to more customers. Franchising is littered with stories of fast initial growth and spectacular failure. In many of those instances, the franchisor missed the fundamental purpose of all businesses, to serve customers. If for whatever reason, you are not putting your franchisees in a position to serve a good burger or deliver a positive service experience, the other stuff you are doing won’t matter.
When franchisors get overly wrapped up in growth, at the expense of their brand promise to consumers, trouble is right around the corner. If you can create an ecosystem that consistently delivers excellence to the end customer, you are on your way to winning at franchising. Seeing franchising through this lens will help you make better decisions. When recruiting new franchisees, you should be thinking about how well they will be able to deliver the experience to the end customer. If they can’t, then trouble will follow.
Think deeply about how your brand is viewed by its customers. Secret shop your franchisees often and relentlessly. Walk in the shoes of your customers and be brutally honest with what you find. Make that the cornerstone of your culture and good things will happen. The big winners in franchising are the ones that get the fundamentals right. The ultimate fundamental purpose for any business is to serve its customers. How well your franchisees can do that will determine how successful you will be as a franchisor.
To see all of Tom’s featured articles on The Franchise Dictionary Magazine, visit this page.