The Importance of Franchise Operations
by Ed Teixeira
Once the franchise agreement is executed and the franchise fee paid, the
relationship between the franchisor and franchisee begins in earnest. A
competent and experienced Franchise operations Department is needed to train,
support and lead a successful franchise program. Whether you’re a franchisor or
franchisee this article describes what constitutes effective franchise
If one were to consider the attributes that successful franchise companies
share, the list would include:
- Franchisees are meeting their financial expectations.
- Franchise system standards are upheld and enforced.
- There is a positive climate of franchise relations.
- There is a high level of communication between the
franchisor and its franchisees.
- Franchisee litigation is negligible.
- New programs and products are readily accepted by
I'm certain other items could be added to this list, however, for our
purposes we'll use only those listed above.
When considering these various attributes the responsibility for
implementing, evaluating and monitoring them rests upon the shoulders of the
franchise operations department. There is no doubt that the sale of new
franchises and creation of new sales and marketing programs is a critical
component of successful franchise programs. Yet without the organizational
structure and personnel to train the new franchisees, support new and existing
locations and deal with the everyday problems that franchisees face a franchisor
will not fulfill its true potential.
Franchisors who wish to achieve success and reach their goals require a
competent franchise operations department. The following are the key
requirements necessary to establish a successful program:
- Franchise operations should report to the president or CEO.
This allows for open communication flow between the franchise
leadership and operations.
- Operations must have a role in the sale of new franchisees.
In many companies the operations staff is not included in the
franchise sales process. This practice excludes those most
familiar with the operation of franchises from being able to
qualify and render their judgment on future franchisees. Some
franchisors go so far as to grant the operations department veto
power over the selection of new franchisees.
- There needs to be an organized program for gaining
franchisee feedback through the operations staff. Field staffs
who deal with franchisees on a regular basis are in the best
position to gain unfiltered feedback from the franchisees.
- Strategic or important decisions which impact the franchisee
community should include the participation of the franchise
- Franchise operations leadership needs to have experience and
credibility since they represent the face of the franchisor.
Franchise operations are an integral part of all successful franchise
programs. The lifeblood of a franchisor depends upon the addition of new
franchisees that can promote the brand and increase revenues. However, without a
strong franchise operations component which is actively involved in the day to
day operations of the franchisor the road to a successful franchise network will
be filled with obstacles.
© 2010 FranchiseKnowHow, LLC
Ed Teixeira is the President of FranchiseKnowHow, LLC. He
can be reached at