The Australian Government is proposing new reforms around franchising and are looking to implement a new Franchising Code of Conduct.
According to research by Griffith University, the franchising sector has 73,000 franchisees and 1,180 franchisors and employs more than 407,000 people.
As the franchising industry expands, it highlights the importance of ensuring there is stronger accountability and greater transparency within the franchisor and franchisee relationship.
Some of the key proposed changes in the new reforms due to take place in 2015, include reducing red tape; improving information available to franchisees; greater accountability for marketing funds and strengthening the balance in franchise agreements. The spirit of the reforms is to ensure the franchise industry continues to flourish, by ensuring both parties are seeing value in the relationship.
So how are some ways franchisors can demonstrate value to their franchisees?
Improve communication with franchisees
Many entrepreneurs choose to start a franchise business because they believe the arrangement will provide them with additional support and expert advice. One way a franchise can demonstrate support, is to ensure there is an open line of communication between franchisees and Head Office.
Communication can take the form of a newsletter, phone support or even an ‘intranet’ or portal. Rather than waiting for franchisees to seek help and advice; franchisors can be proactive by providing tips and tricks, sharing best practice ideas or even ensuring franchisees are kept up to date on the latest news affecting the franchise.
Create an engaged community of Franchisees around your brand… make them feel like they are part of a movement, not just a signboard
Owning a business can be a very isolating experience and can sometimes require 24/7 attention. Facilitating communication between franchise owners can be very beneficial to the group as members are able to connect with each other, share experiences and can bond with people in a similar situation to themselves.
Knowledge sharing is also great for the franchise as different franchisees can discuss the deals that have driven more sales and also share artwork and images for point of sale.
Provide a marketing platform that consolidates marketing tools, making it easier for franchisees to do their own local marketing activities
There are a myriad of marketing tools that can be utilised for local marketing, and many business owners don’t have time to plough through the labyrinth of traditional and digital channels out there.
Providing a marketing portal with access to the best tools will help with campaign execution and will help business owners save time. Platforms such as the Fuse platform give franchisees access to multiple tools in one place, from Press Ads to SMS, point of sale to email marketing.
Demonstrate cost savings by leveraging the size of the franchisee network
Being part of a franchise can help consolidate marketing resources, but the true value can be seen in cost savings. If there is a national campaign, and multiple sites want similar point of sale material, facilitating group buying will reduce costs for franchisees. The key is to automate the process, rather than operating a group buy system that needs to be administered by Head Office.
Incentivise and encourage
Creating an internal reward system that encourages collaboration and incentivises franchisees to experiment with new marketing campaigns can boost morale, while also rewarding franchisees who are taking the initiative to really build the brand.
An example is having an incentive program to co-fund activity or to reward the ‘campaign of the month’ with credits to spend on their next campaign.