Franchisor Leaders: Balance Your Role in Franchise System Development

One thing I’ve learned after a long career in franchising is that the founders and leaders of franchise brands can play a varied role in the development of their franchise system. Depending upon the individual franchise system the role of the CEO can be broken down into three levels of engagement. Their involvement should evolve as the franchise system grows.

1. Active Role:

From the franchise launch until the system reaches a certain number of franchisees for example, 10 units. The CEO will play an active role in franchise development recruiting strategies, qualifying candidates and controlling the franchise engagement process to include the close of the franchise transaction. Many franchise leaders consider this the most effective way to gain experience and over franchise sales.

2. Semi-Active Role:

If the emerging franchise has many corporate locations the CEO will hire an experienced franchise development manager and empower them with the responsibility and decision making for establishing a franchisee recruitment strategy, pre-screening potential candidates and engaging the franchise candidate to closing. This person will keep the CEO closely involved in the franchise process with frequent updates and will consult with the CEO on an as needed basis.

3. Passive Role:

In this situation franchise leadership is basically disengaged from the franchise development process and depends on a franchise development team to lead the effort. Except for an issue regarding a candidate’s qualifications or a request to negotiate a key franchise provision this leader will remain fairly disengaged from the development process. Their role may be relegated to a meeting during an initial candidate visit or during Discovery Day.

Regarding the role of franchise brokers, their involvement can vary from little to active participation in a brands franchise development.

Whichever role a franchise leader may play in franchise development they should not neglect the importance of being engaged in franchise operations. Their engagement can range from following new franchisee performance to maintaining contact with existing franchisees.

In emerging franchise systems the CEO can have personal contact with new franchisees while in a larger franchise system conference calls and webinars can facilitate meeting with the entire franchise network. The role of the franchise CEO should include franchise development and franchisee performance.