12 Sep Franchise Advisory Councils in the Real World (part 1)
The Purpose of a Franchise Advisory Council
The main aim of a Franchise Advisory Council (FAC) is to create a platform in which Franchisees are invited share and discuss their ideas and/or issues with the Franchisor’s support team. The Franchisor is generally expected to participate primarily as an observer, and allow the Franchisees to offer advice and insights they may have on the business, its operational systems, or its marketing approaches. It is not a requirement that the Franchisor should take any action within the meetings.
The Franchisor is under no obligation to put into action any of the suggestions brought to light, however, the suggestions made often carry potential value to the betterment of the business, and instils trust and faith in the Franchisor by the Franchisees. This is really the best opportunity Franchisees get to collectively voice their ideas, and therefore it is expected that the Franchisor attends the meetings with an open mind.
Creating a FAC is a great way for the Franchisor to connect with the franchisees in a positive manner.
The Benefits of having a Franchise Advisory Council
Any successful Franchisor will tell you how crucial it is to the success of the network as a whole, to have the support of their Franchisee community. While the Franchisor maintains a lot of operational and brand control, it is the Franchisees who are dealing with customers and clients, handling the product and/or delivering the services. Each individual Franchisee, therefore, has the potential ability to determine some of the areas in which positive changes can be implemented into a business, based on the challenges they face in day-to-day operations. These challenges may directly impact the health of the business as a whole, either through its level of customer satisfaction or through the happiness of the franchise-holders.
Who Benefits from FAC’s?
While most business owners and participants shirk the idea of more meetings, a FAC holds more benefits than would be expected, and these benefits affect everyone in the business. One of the most notable benefits felt by these meetings is that better relations can be established between the Franchisor and the Franchisees. It exists to open the gateway of communication, thus creating a strong relationship with the franchisees, which encourages dialogue and averts grievances being harboured which may lead to bigger problems later on. It is advised to keep the discussions to topics that affect everyone, and no individual Franchisee agendas should be discussed, unless these agendas may positively affect everyone.
It should be considered an honour to be elected as an advisory member to represent the general franchise-holding community at a FAC. An elected Franchisee has the power to help shape business policies, systems, marketing approaches among other aspects, and therefore needs to take careful consideration to including the views of everyone in the business community.
Running a productive and effective FAC means convening no more than the minimal frequency requires you to. Determine how often changes occur in your industry or business, and commit to a schedule that accommodates that, if you’re unsure start with quarterly meetings – that is the average we see with our clients – this can be enhanced with more frequent web conference (virtual) meetings in order to keep costs down and involvement high.
Running an Effective Franchise Advisory Council
Have a Practice Round
If you are just starting out with a FAC, having a “test meeting” is a great way for the Franchisor to evaluate the meeting structure and the dynamic of the selected group. All the participants should be alerted to the fact that it is a test meeting, but nevertheless, it needs to be run as a normal meeting. It can then be reviewed for whether the structure of the meeting is suitable or not. It is also an excellent opportunity to allow FAC members to become familiar with each other. Running a FAC also requires a clear agenda for each meeting, which must be adhered to. This helps to prevent gripes later on, as the issues that are being felt can be addressed. Minutes should be recorded and be made available to everyone after the meeting for reference.
Ensure That You Have a Strong Team
Members that are selected for a position on an FAC need to be carefully vetted. These members need to be experts with a sound understanding of their franchised business, while also holding and being able to represent the best interests of all Franchisees plus the Brand in general. For the Franchisor to meet over lunch or coffee with individual FAC members outside of meetings is also an excellent way to solidify the good relationships that have started. It allows ideas to flow, and the expertise of that individual to come forth.
It is not recommended to let the number of members on the FAC become too large. An effective FAC will be an intimate gathering comprised of only members with the skills to assist in resolving the relevant issues at hand. As these issues change, new members with skills relevant to the changes will be placed onto the FAC. FAC by-laws (click here to view some sample by-laws) usually dictate the selection process, but Franchisees are generally selected based on how long they have been a franchise-holder, their geographical location, their business size or their business performance. It is advised to select new franchisee representatives every 12 to 24 months, cycle these new Franchisees through so in any year only 1/3rd of FAC members are new.
Keep The Hierarchy In Place
It is essential for the successful operation of a FAC that it offers recognition to the Franchisor, and respects the hierarchy of the Franchisor as the final decision-maker. The Franchisor in return will take note of everything that is said, and consider putting action to the suggestions that are made. As the leader, the Franchisor will also steer the conversations during meetings towards striving for creative solutions according to the agenda.
What About Rules and Regulations?
An effective FAC will have a written set of by-laws (click here to view some sample by-laws), which will serve as a basic guideline of ground rules. This allows everyone to have clarity on the goals and the expectations both of each individual attending the meeting, and the meeting itself. Typically there is no compensation to FAC members, however travel, meeting room costs and other business expenses are usually covered by the Franchisor.
While these gatherings are strictly professional, it is important to remember that the general tone of the meetings should sway towards being slightly more relaxed and friendly than formal. A comfortable approach to these meetings will encourage open dialogue better.
For more information on the mechanics of running a FAC, pitfalls to avoid and tips for success, visit our blog for part 2.