Franchising your business for long-term success (pt 4)
2007-07-26 15:09:34 -
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Founder of O’Briens Sandwich Bars, BRODY SWEENEY, continues his series on how to cope with the stresses and strains of starting a new enterprise

The need to impose discipline and not turn into a democracy (continued)

Some years ago, I tried to introduce some changes to the O’Briens franchise system. These changes involved a significant contractual change, but only for new franchisees who were opening new stores. 

I didn’t think that these changes would disadvantage our franchisees and assumed that the existing franchisees wouldn’t have a problem with them. I thought wrong. 

A small number of franchisees whipped the rest up into a frenzy of moral indignation. I was shocked that the relationships with franchisees that I had carefully nurtured seemed to be falling apart. 

I invited the ringleaders in so that we could discuss the situation in a democratic fashion. We would try to arrive at a mutually beneficial compromise. 

The ringleaders got a sniff of weakness and went for the jugular. For a while, they thought they were running the company, and started to behave in such a way. Demands were made for changes to our existing contracts; these demands had nothing to do with the original dispute. 

I had made a big mistake; it rattled my confidence, and it took me some years to recover from the hurt and negativity that had been created. It was, however, a good lesson to learn. 

By all means listen to what your stakeholders have to say – much of it will be sensible and helpful – but bear in mind that franchise businesses do not operate best as democracies. Somebody has to take decisions that are in the interests of everyone. 

Imposing discipline in the system is really for the common good. At times, unpopular decisions have to be taken, in the common interest, and strong leadership is required.

Systematise everything

As we developed our business, we wrote down in a series of manuals the right way to do things, and also the way not to do things. This was because I learnt early on that it was inefficient to reinvent the wheel every time we opened a new store and that, by writing things down, we remembered how to do them well. Most importantly, this approach invited accountability. 

If you train someone how to do a job, give them a manual to back up the training, and if they then manage to screw it up, you don’t need to have a big argument as to where the fault lies.

In the early days, when we had a problem with the way a franchise partner was operating a store, the franchisee would sometimes claim that they had not been trained as to how to carry out a particular function. When we were able to point out to them that we had trained them in that task at their induction-training course, and furthermore could refer to the page in the manual where it was covered, the argument was essentially over. In fact, we employed a term for a franchise partner who asked us questions to which he or she should have known the answer: RTFM, or ‘Read the f***ing manual’.

Writing things down also meant that, when we started expanding at home and overseas, we had guidelines as to how we should build, open and operate stores. 

The practice of continually refining how we did things for our Irish market meant that we had ironed out many of the common mistakes we would have made when it came to setting up in a new environment, far from home. Our system of manuals is one of the foundation stones upon which we have built our business.

Understanding the 80:20 rule
Isn’t it interesting how the 80:20 rule applies to so many different aspects of life, particularly in business? In franchising, there are lots of uses for it. Like the fact that 80 per cent of your profit is likely to come from just 20 per cent of your franchise partners, or that in franchising, you spend 80 per cent of your management time dealing with the weakest 20 per cent of your operators.

I often think that my job in O’Briens involves letting our very capable management team run the business, while I try to figure out how to deal with the day-to-day crises which are part and parcel of every business, and come up with new ideas to drive us forward. The ‘driving us forward’ bit is the part that our most profitable franchise partners are interested in, but if we don’t put out the fires as we go along, the whole business could potentially go up in flames.

Try to keep your eye on the big picture and not get overwhelmed by problems. The key to O’Briens being successful lies in driving the sales and profits of our franchise partners forward. If we don’t spend enough time doing this, the whole business suffers.

Next week: Franchising your business for long-term success continued

n Taken from Making Bread – The Real Way To Start Up and Stay Up in Business by Brody Sweeney, published by Liberties Press – buy at www.libertiespress.com and get a 10 per cent discount

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