Five Ways to Engage Franchisees and Drive Profitability During the Pandemic
4 Min Read By Keith Gerson, CFE
In a study conducted by InGage Consulting and Franchise Business Review, franchisees that are engaged in their business are 3.7 times more profitable than those that aren’t. And during a pandemic that has lasted for nearly a year and devastated thousands of restaurants, engagement is crucial.
However, driving engagement is historically challenging for most multi-location restaurant brands and COVID-19 has only exacerbated that challenge. The pandemic has completely upended the restaurant industry and the personal lives of everyone in it. Restaurant owners have had to worry about the health of their business, as well as the health of their family, friends, and employees. It’s a crisis within a crisis.
But despite everything, there are still ways to engage franchisees in order to drive profitability. Here are five tactics that restaurant brands of all sizes — concepts like Tropical Smoothie Cafe, Firehouse Subs, Capriotti's Sandwich Shop, and others — are using to help franchisees be successful.
Have Your Executive Team Personally Check In with Franchisees
While franchisees often have recurring check-ins with their franchise business consultant or other similar advisor from corporate, a call from a member of the brand’s leadership team to see how they’re doing and how the brand can better support them will go a long away in these difficult times. We’ve repeatedly heard how genuinely moved franchisees are to receive such a call. Leadership will find that it doesn’t take much time yet has a high ROI in terms of showing their level of commitment and conveying how valued their franchisees are. And franchisees that feel valued are more engaged, leading to better performance.
Create a Central Hub with Engaging Content
The top-performing restaurant franchises have robust training and support in place — but that doesn’t always mean it’s centralized and organized. We’ve all worked for or with organizations whose most important programs could be best described as organized chaos, with a collection of PDFs, spreadsheets, videos, Google Drive documents, and digital operations manuals spread across shared drive folders and intranets.
So, in 2021, make it a priority to give all your brand’s most engaging content a home. By creating a central hub for franchisees, you’ll make it easier for them to access what they need and discover resources they never knew existed to help them drive profits. A best practice we’ve found works very well for our restaurant clients is to create a digital library that can be set up so that members of the team are only seeing what they are permissioned to see with administrative controls based on roles and personas.
Formalize Your Virtual Site Visits
For many restaurant brands, in-person visits by field teams have historically been constrained by human resource limitations and cost, and now the pandemic has added an extra layer of complexity with travel restrictions.
Early in the pandemic as in-person meetings went virtual, many were simply flying by the seat of their pants, trying to get the work done however possible. But now, so many months later, virtual site visits have become the new normal — so it’s time to formalize the process. By having a formal process in place, you’ll have much more productive visits and, who knows, you may even continue using virtual site visits post-pandemic.
It’s always been a challenge to schedule and manage on-site visitations, and the pandemic certainly hasn’t made this any easier. Based on this, we have developed a technology solution for restaurant brands that not only helps manage the virtual support visit, but also allows franchisees to utilize dashboards that identify problematic areas within the business. It also subsequently issues “playbooks” made up of the organization’s best practices and actions on how to close the gap in performance shortfalls. Restaurant brands should consider the role that technology can play in helping to plan, organize, direct, control, and evaluate performance.
Give Franchisees a Forum to Share Best Practices
Franchisees have always wanted a forum to share best practices with their fellow operators, but it’s never been more important than it is now. We’ve worked with hundreds of restaurant brands to help them establish hubs where their franchisees can connect at the national, regional, and local levels to discuss what’s happening with the brand nationally and in their own backyard. This has especially been helpful as franchisees have had to navigate ever-changing local COVID-19 restrictions.
Franchisees can have a forum to talk to each other in real time about what’s going on in their business right now. This methodology can also be of value in organizing Franchise Advisory Councils that allow regional groups to effectively communicate their success stories and support needs to their elected or appointed regional representative.
Provide Franchisees with an Adaptable Template and Budgeting Playbook
In a survey we conducted in early 2020 with franchisors, 80 percent said their biggest challenge in helping their franchisees improve their performance and drive profitability was a lack of a localized business and/or marketing plan. Providing your franchisees with a playbook to guide them through the budgeting process for their restaurant’s unique situation will engage them to lay a foundation for their success in the months and years to come. Even though trying to forecast the future during a pandemic where there are so many unknowns seems impossible, planning is more important than ever.
A budgeting playbook should include a break-even analysis, steps to determining a profit goal and what sales are needed to reach or exceed that goal, a process for analyzing business performance and how to improve in the coming year, how to conduct a cash flow analysis, and — most importantly — a process to hold franchisees accountable for the goal they’ve set, such as a mid-year check-in to review, reflect on, and revise the budget, if needed. For an example of a budgeting playbook, I recommend reviewing this one that we developed in partnership with budget and financial expert Barbara Nuss of Profit Soup.