In today’s economics of scale, it’s hard for giant corporations like McDonald’s or Starbucks to survive without their franchise operations. As franchise networks scale with business growth, proper management of franchise operations becomes more important, and this is where the franchise manager plays a key role. In this article, we will take a close look into the role of franchise management and how you can become one.
What is The Role of a Franchise Manager?
In franchise systems, a business allows its products and trademarks to be used by another business in exchange for a fee and royalties. The former is known as the franchisor and the latter is known as the franchisee. A franchise manager’s role is to bridge the gap between a brand and its franchisee by serving as a liaison between the corporate entity and individual franchise owners, to secure smooth operations, and foster a cohesive brand image and customer experience across all locations.
Franchise managers oversee the planning of franchising, implementing strategic plans, providing training and support to franchisees as they review contracts, process renewals, and enforce licensing expectations. A franchise manager ensures that franchisees adhere to the company’s standards and practices while also supporting their success in the market.
Let’s explore the essential aspects of this role:
Franchise Development Strategy:
Franchising allows a company to be both local and international. Franchise owners are familiar with their communities needs and culture, a franchise manager should consult with franchise owners about the localization aspects of the brand, and determine what is feasible that aligns with company’s goals and standards.
Franchisees benefit from a proven model, while franchisors expand without excessive capital requirements. A franchise manager should be able to communicate properly all aspects of the brand model to franchisees while simultaneously maintain capital and save costs for both the brand and the franchisee.
Support and Relationship Building:
Franchise managers should equip franchisees with essential knowledge and skills. These cover operational procedures, marketing strategies, and customer service standards. For example, Starbucks franchise might train franchisees on coffee prepation, inventory management, and customer interactions.
In addition to comprehensive training, franchise managers should provide operational support to franchisees by conducting regular visits from field representatives to help franchisees troubleshoot challanges, additionally, supporting the franchisees with hiring, training staff, and acess to dedicated support hotline.
Marketing and Recruitment:
Franchise managers can supervise marketing campaigns, as they enhance brand visibility and connect with other potential franchisees.
Franchise managers can plan discovery date that allows franchisees to visit the franchisor’s headquarters or existing locations as these events provide insights into the business model, culture, and support system. Such events lead to informed decisions and enthusiastic franchisee sign-ups.
Financial Management:
Franchise managers oversee budgeting as it is crucial for franchise development. Franchise managers plan ahead resource allocation to effectively achieve growth.
A franchise budget usually include:
– Sales and Recruitment: Includes marketing, advertising, and lead generation costs.
– Legal and Compliance: Covers legal fees, documentation, and regulatory compliance.
– Training and Support: Ensures franchisee success through training programs.
– Discovery Days: Events where potential franchisees learn about the brand.
– Technology and Systems: Investments in software, tools, and infrastructure.
Locating and Evaluating Prospective Franchisees:
As brands plan to franchise, the franchise department led by franchise managers research local markets where the brand plan to expand, considerin demographics, customer behavior, and demand for the product or service, and evaluate existing competitors and identify gaps your franchise can fill.
Brands should choose strategic locations based on foot traffic, visbility, and accessibility while assessing whether granting a franchise in a specific area aligns with brands’ growth strategy, and considering target audience preferences.
Financial managers should research potential franchisees thoroughly, understand their background, financial stability, and commitment.
Franchise managers shall review the Franchise Disclosure Document (FDD) carefully, pay attention to financial performance, legal history, and franchisee obligations, and gather insights from current franchise owners. Their experiences can reveal valuable information.
Performance Analysis and KPIs:
Franchise managers play an important role in assessing and enhancing franchisee performance.
Profit & Loss (P&L) statements asses performance analysis as they summarize revenue, costs, and expenses over a specific perio by analyzing total sales generated, direct costs related to production (COGS), and calculate net profit.
A franchise manager should assess KPIs. KPIs are a set of factors to determine franchise performance such as total sales before deduction (gross sales), gross sales minus allowances, discounts, and returns (ROI), and ensures smooth operations and growth (cash flow).
Franchise managers compare franchise performance against industry standards or successful franchises, and identify areas for improvement and best practices.
Franchise managers ensure operational excellence by visualizing workflows to find difficiencies, and by measuring customer loyalty and service quality, and finally optimizing staffing levels.
The Skills You Need to Become a Successful Franchise Manager
Leadership:
A franchise manager should guide and inspire franchisees toward achieving brand goals while balancing the interests of both franchisor and franchisee.
To become a successful leader, a franchise manager shoud develop emotional intelligence, enhance communication, foster team collaboration, adopt a growth mindset, engage in continuous learning, lead by example, provide feedback and recognition, and empower their team.
SalesForce:
Familiarity with customer relationship management (CRM) software is critical to manage scale and speed of operations as it helps in managing leads, sales, and customer interactions.
Negotiations:
A successful franchise managers should be able to negotiate contracts, leases, and vendor agreements, and resolve conflicts effectively.
Customer Service:
Franchise managers should nsure consistent customer experience, and supervise specialized teams to handle inquiries and complaints.
Inventory Management:
Franchise managers should supervise stock levels optimization, and minimize waste and maximize efficiency.
The 4 P’s of Franchising
To conclude this article, as a franchise manager, you should undertake the main 4 P’s of franchising which are:
Person:
You, as the franchise manager, must build trust with the prospect. Be credible, relatable, and someone they want to do business with.
Invest time in understanding their background and needs, and share about yourself and create a genuine bond.
Place:
Prospects must trust your place of business (the franchise brand), always discuss company culture, values, and support systems, and encourage them to connect with existing franchisees.
Product:
Understand the franchise offering thoroughly, explain the product or service, its uniqueness, and market demand, and highlight training, marketing, and operational support.
Price:
Discuss financial aspects: initial investment, ongoing fees, and potential returns. Be transparent about costs and financial projections.
As you can see becoming a franchise manager is not an easy endeavor, it requires patience, commitment, and strategic planning. Jobzella can you help you kickstart your franchise management endeavor, you can begin looking for jobs here!
