Post Meeting Review
Posted by admin on February 28, 2009
Here is an expansion of what I believe is the key piece to the presentation on Wednesday;
According to Peter Hansen, the president of the American Association of Franchise Dealers (AAFD); www.aafd.org, in his 30 years of working with Franchisee Organizations there are four key factors to determining the longevity of an Independent Franchisee Body. All four factors are present for long lasting organizations. If one is missing the risk of falling apart increases substantially.
1. A physical office – Some structure that defines an entity. When a physical presence is given to an organization it validates the functionality of it. This reinforces the presence to both the Franchisees and Franchisors. This is a place where all business matters are looked after. This includes receiving mail, filing paperwork, a phone and fax line, internet and website support, etc. It is ok to have the physical office at a Franchisee’s place of business. However, the most successful organizations have an independent office for organization matters only.
2. Back office support staff – This could be a secretary or group of paid individuals who take care of the administrative aspects of the organization. The administrative duties take up a vast amount of time. One Franchisee cannot handle all administrative duties alone. It requires a number of Franchisees to collect money, mail newsletters and tax receipts, keep the books, pay the bills, track expenses, answer the phone, etc. If all these duties are split between Franchisees, inefficiencies occur and different practices are put in place by each member creating dysfunction. Sooner or later this dysfunction creates irregularities and the organization falls apart.
3. Executive Director – A one headed monster, so to speak. By having “too many Chiefs and not enough Indians”, an organization has the tendency to fall apart quickly. This means creating a tiered management structure with different levels of commitment and responsibilities. Franchisees under one network are independent of each other. Each Franchisee looks after his/her own business and yet every Franchisee can also impact all others by their actions and decisions. This creates an equal field where each Franchisee has as much say as the next. Any organization that umbrellas the network cannot operate under those conditions. The lack of a structured management team will create inconsistencies in direction and leadership and lead to the failure of the organization. The most profitable and successful franchisee organizations pay for outside leadership.
4. Infusion of Leadership – There needs to be new blood working through the ranks; young ambitious franchisees willing to put time and energy into protecting their long-term future. Franchisees that work their way through the ranks of an organization are typically the most productive and progressive managers. This is partly because once the focus of the group is no longer building a foundation, the new management team has the ability to create a more forward looking agenda. The ability to recruit new blood is made easier by an organization’s ability to provide compensation for participation. In particular, creating a paid management team provides interest from the network, and accountability to the network.
My opinion is that you get what you pay for. If we are willing to pay for this type of structure and organization then we can create a powerful and valuable body to represent our network. One misconception is that any organization or structure that a franchise network creates is meant to be used in a negative manner. This is simply not the case. The goal of our network is to create accountability for both ourselves and CBCL. We want to work together as a team to build this business and protect the long term future of ourselves and CBCL. My opinion is to not shut CBCL out of the building process, but ask for support and advice. This is a tough challenge for us and we will have missteps along the way. By bringing CBCL in for advice, we can show first hand what our intentions are and create a solid foundation for both the network and CBCL to work together.