What Makes a Great Franchise Leader?

Good leadership is a hard quality to define, but we know it when we see it. Sometimes we recognize leadership through the excellence of a long-term game plan or by smooth franchise relations. At other times leadership can be demonstrated by the willingness to make a sacrifice, respond to a challenge, or venture into uncharted waters. Leadership is that rare blend of tangible and intangible qualities that make others want to follow in the leader�s path.

Leadership may never be more important, nor more of a challenge, than when launching a franchise. To lead a new franchise company to growth and profit, the franchisor must understand and internalize a new philosophy: the customer is now the franchisee, not the consumer, and helping the franchisees serve the consumers is the goal. The degree of success that the company will enjoy as a franchise during those first years hinges directly on the ability of the owner to leave the realm of "entrepreneur" and take on the mantle of "team leader."

A leader�s philosophy for a franchise company MUST be: "When our franchisees make money, then we make money. Therefore, we will help them to succeed in every way that we possibly can."

In analyzing outstanding franchise companies, we see the following characteristics in their leaders:

8 Characteristics of Great Franchise Leaders

1. They have vision. They know where the company is going and can articulate the plan in such a way that the entire team is inspired by it. They are constantly looking ahead and repositioning the company to achieve the greatest profitability for both the company and its franchisees.
2. They listen to their franchisees and learn from them in a spirit of open communication, and they understand and acknowledge that most of their successful ideas come from franchisees. They have established a formal line of communication through a franchise advisory council to serve as a guide and sounding board for decisions, and they are willing to discuss issues informally to keep the franchise running smoothly.
3. They understand the business thoroughly. They actually have worked in the operations side of the business long enough to understand the challenges that franchisees face and the systems they need to enhance higher profitability and growth. They work hard to keep improvements to the systems logical, trainable, and within the financial grasp of all franchisees.
4. They are accessible. They take the time to go on the road to meet new franchisees and to renew their relationships with the established ones. Franchising is a business of partnership. Personal relationships inspire mutual loyalty and understanding.
5. They have respect. Good leadership sets the attitude that permeates the company. They treat their franchisees as experienced business partners, explaining their decisions with statistics and logic rather than handing down ultimatums. When the leadership speaks of its franchisees as "our franchisees" (rather than "those guys") it demonstrates the spirit of mutual respect and integrity that is necessary to validate and sell franchises.
6. They embrace change. They constantly look for new ways to make their franchisees more money. They look ahead to guard their group, thwarting threats before they strike. They fearlessly strive to upgrade their technology to save their franchisees time and labor. They evolve as their customer base evolves, understanding that consumers are a moving target and that attention to trends will safeguard their customer base from erosion.
7. They do their homework. They constantly monitor the entire operation, maintaining the financial balance between the support that is promised to the franchisees and the cash flow that will provide that support. They have read the manuals, sat in on the training, read the latest UFOC, and participated in the sales process so that they completely understand "the system" that they are offering.
8. They choose the right team to lead. They have analyzed the necessary skill set and personality style that will ensure the success of their franchisees, and they sell ONLY to those people. It takes a smart and tough leader to say no to people who want to buy but who will be unable or unwilling to perform the necessary duties (usually sales-oriented) of the business. The leader also must choose a management and support staff that blends well with the desired personality style of the franchisees to ensure effective communication and mutual respect. And finally, he/she strives to keep bureaucracy at bay, empowering the support team to make decisions that alleviate franchisee frustration and red tape.

Franchisee Leadership

Is there really a "leader" among franchisees? Absolutely, and usually at least one from each region. It might be one of the first franchisees, or the most vocal, or the best at mentoring and aiding others. Franchisee leaders can be a powerful force for the positive if the franchisor has been effective in selecting and nurturing the right franchisee candidates.

The right franchisee as leader can assist even a struggling franchise system to survive by helping the franchisee group to understand one crucial issue: that even a poor "parent" is better than no parent at all � it�s better to fix the system than to take it down. Wise words of experience from a franchise leader can be the glue that saves a franchise company, helping the entire group prosper.

If leaders, whether franchisor or franchisee, put a sincere desire to build a strong group of successful franchisees over their desire to make quick money, the franchise will truly operate as a partnership, and the leaders will bask in the glory of a smooth-working team building their brand and the ultimate value of their asset.

Written by Cheri Carroll and Howard Bassuk for Successful Franchising
Copyright 2000