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Franchisor Focus: What Makes a Successful Franchise Leader?

Published on July 27, 2021

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The franchise business model differs from the traditional business model in part because a franchisor entrusts its franchise brand to its franchisees and in return the franchisee invests their money in the franchise.

Naturally, franchisees expect their franchisor to fulfill its obligations including training, operational support and collaborating on certain promotional activities that can impact both parties.

To reach a level of franchise excellence requires a particular style of franchisor leadership. When one considers the great franchise brands and their leaders, each share certain traits that helped propel their franchise to success.

Whether a franchise concept is emerging, growing or mature, the leader of the franchise should possess the following traits:

  1. An Eagerness to Listen: The franchise model has two constituencies; its franchisees and customers. This requires an effective franchise leader to be willing to listen to both groups. From my experience the franchise leaders I admired had a strong desire to speak with and hear what our franchisees had to say to include contacting them directly. This validated the trust these leaders placed in their franchisees. Although feedback and communication typically flow upward in most business organizations, franchise leadership should encourage its team to seek feedback from its franchisees.
  2. Promotes Franchisee Involvement: Because of the franchisor and franchisee relationship, there should be a process that includes franchisees in those decisions, especially financial items that can directly impact franchise operations. The reported state of poor franchise relations management at Subway has been attributed to franchisor mandating changes that negatively impact its franchisees.
  3. Remains Involved: The effective franchise leaders have a passion for their franchise brand and a quest for excellence where they remain actively involved in the franchise business. This trait should not be confused with the meddling leader that gets so involved in the franchise operation, it can frustrate subordinates and franchisees. The effective leader’s objective is to keep the franchise operation on the right track versus the franchise leader that grows more distant as the franchise grows larger.
  4. Pursues System Profitability: When the franchisor and its franchisees are profitable it will lead to a successful franchise program. The franchise leader and their team should establish financial goals for their franchisees and measure franchisee results to review franchisee performance. This enables the franchisor staff to identify which franchisees may require assistance.
  5. Encourages the Franchisee Buy-In: Introducing new programs and concepts which will impact franchisee operations will be more readily accepted when there is a buy-in from the franchisees. Since most franchisees deal with their customers daily, they have a unique knowledge of customer expectations. Whether using a marketing committee or special committees, the franchise leader should engage representative franchisees in the creation and initial roll out of new products and services.

Because franchise organizations have different characteristics compared to other business models, it is important that the franchise leader has a certain persona, including a willingness to listen to their franchisees.

About the Author: Ed Teixeira
Ed Teixeira is a recognized franchise expert with over 40 years’ experience in the franchise industry. He has served as a corporate executive for franchise firms in the retail, manufacturing, healthcare and technology industries and was a franchisee of a multi-million-dollar home healthcare franchise. Ed and Richard Chan are the authors of a new textbook, Franchising Strategies: The Entrepreneurs Guide to Success, to be published on July 1st by Routledge on July 1st. He has participated in the CEO Magazine Roundtable Meetings with business leaders from around the country and has spoken at a number of venues including the International Franchise Expo and Chinese Franchise Association in Shanghai, China. Over the course of his career, Ed has been involved with over 1,000 franchise locations and launched franchise concepts from existing business models. Ed can be contacted at [email protected].

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