Let’s start with “what’s good for the goose is good for the gander.”
Everybody in the system wins with a strong vision and a pathway to achieve it. That’s what goals provide. The process is the same. Start with the vision. Understand your “Why?”. Develop long-term plans and cascading goals to help achieve them.
Instead of growing a profitable business, a franchisor must build a support structure that enables franchisees to grow profitable businesses. That’s what it takes to build a successful franchise brand. The devil is in the details. Even though the franchisor cannot control franchisee profitability, they are a stakeholder in their success. They must anticipate how changes in the market will impact the brand and the franchisees who have invested in it. How do changes in regulations, labor availability, consumer behavior, supply chain, inflation, and recessions impact the brand? Franchise executives must decide when it is time to change course. Then they must make the business case and sell the vision. It is a tall order to get people with differing experiences, values and goals to buy into change. This is the most difficult and most important role for franchise executive teams.
Good franchise leadership involves managing a community, which takes different skills and resources than managing one’s own business. All businesses must evolve to stay relevant. When franchisors and franchisees share the same vision and values, change is easier. Now we’re talking about culture and trust instead of goals.
Goals are our way of navigating change. But a franchise system needs more than just goals. They absolutely must have strong leadership, vision, values, trust and culture to get the community on board with change. This requires an understanding of the goals and vision of the franchisees.
The Best Franchisors Have a Planning Culture
Don’t be afraid to talk about exit planning from Day 1. Start with the end in mind. Define the growth goals – and that means growing sales AND profits. Then each year, revisit the 5-year plan and really help the franchisee assess how their business helps them achieve their personal goals.
For a franchise system, a planning culture goes beyond attitude. You must have tools, support and templates for budgeting and goal setting, just like you do for marketing and operations. Make goal setting, budgeting and talking about profits part of your franchise support process. Remember, it’s a process, not a project.
More Resources
Listen in as Profit Soup founder Barbara Nuss talks more about Goal Setting for Profitable Growth on our Small Bites of Business Insights Podcast produced in partnership with the Yum! Center for Global Franchise Excellence.
Watch as Profit Soup’s Rod Bristol shares a step-by-step process to maximize the value of your company in Dream Big, Have a Plan.
Ready to drive learner engagement and financial traction in your system? Ready to drive learner engagement and financial traction in your system? Become a Certified Profit Lab Facilitator for new insights, skillsets, and tools to make it happen.