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As a franchisor, it is crucial to maintain a competitive edge for your franchise network and brand. Continuously improving your franchise system is part of your responsibility. When introducing operational changes across your franchise network, you will face complexities, regardless of the changes you have in mind. You should consider how you communicate these changes to your franchisees and uphold their autonomy as independent business owners while acting in your role as the franchisor. This article will provide you with several tips for effectively introducing network-wide operational changes.
1. Plan, Research and Prepare
The initial stage of introducing any network-wide change involves careful planning. Your planning should involve thorough research about your ideas. Consider aspects such as:
- cost;
- additional resources;
- timing;
- whether you require a team or additional personnel to implement developments; and
- how you will roll out the change.
2. Conduct Tests
Many franchisors conduct small-scale tests, assessing the performance of their new ideas before formally introducing them across their franchise system. They will conduct these tests with particular franchisees who agree to try out the new idea for a specific duration. This stage can indicate whether the development will be successful on a larger scale. You should ensure that the terms of your franchise agreements permit small-scale testing with those franchisees.
By testing, franchisors minimise the risk of issues arising further down the line. If your idea is not quite right, you can take it back to the drawing board. Following successful tests, you can report the results to other franchisees in preparation for the broad-scale launch.
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3. Consider Your Franchisees
The franchise model means franchisees own independent businesses but operate within the franchise system. For franchisors, there is a careful balance between innovating their franchise network and overstepping by exercising excessive control over franchisee’s businesses.
If needed, refresh yourself by reading the roles and responsibilities set out in the franchise agreement. It is vital that you adhere to these to avoid any breaches of contract. Depending on the terms, you may need to seek your franchisee’s consent before making particular changes. Another aspect to be aware of is funding. If you require franchisees to fund all or part of the development, you should confirm if your franchise agreement allows you to do this.
Effective and transparent communication with franchisees will help foster positive relationships and mitigate the risk of disputes resulting from network-wide operational changes.
You should involve franchisees by inviting them into the process of new developments and brand innovation. You can do this by communicating potential changes well in advance of implementation and actively seeking their thoughts and feedback. It can be beneficial to convey why you are making such developments. Communicating why they are necessary can be essential to gaining franchisees’ trust and understanding.
Your approach to franchisees will depend on the size of your franchise network. You may be able to speak to each franchisee independently to explain the change and seek feedback. Alternatively, in a large franchise network, you may have a team that can assist you in rolling out new developments and communicate with your franchisees.
4. Update the Franchise Operations Manual
You should update the franchise operations manual to reflect network-wide changes. The operations manual is often the first port of call for franchisees when they need clarification on a particular aspect of their role or how to operate their business.
Ensure you update the manual in line with any significant changes you make in your network. It can further support franchisees through the implementation process and minimise potential disruption and disputes.
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5. Offer Further Training to Franchisees
As a franchisor, it is your responsibility to support your franchisees. This support could include further training sessions about significant changes and brand updates. You can consider whether such training would be necessary during the initial planning phase. If so, you can develop a training plan to reflect this.
6. Seek Legal Advice
You may face contractual complexities when making significant changes across your entire franchise network. If you require legal advice about making network-wide operational changes, you can engage a lawyer with experience dealing with franchises.
A lawyer can advise you on your responsibilities and relevant franchising best practices, guiding you through the process.
Key Takeaways
As a franchisor, you can actively implement network-wide operational changes by strategically planning and researching. During this initial phase, consider costs, resources, timing, and personnel needs. Subsequently, conduct small-scale tests with willing franchisees to assess feasibility and ensure compliance with agreements. It is crucial to maintain a delicate balance between innovation and respecting your franchisees’ autonomy. Transparently communicate changes to foster positive relationships and, importantly, involve franchisees in the development process. Seek their input for a collaborative approach to your franchise network. Additionally, you should update the operations manual to reflect changes, thereby minimising disruptions. Provide franchisees with additional training sessions to help them adapt to significant changes. Lastly, seek legal advice to navigate contractual complexities, ensuring compliance with responsibilities and best practices for your franchise business.
If you require further legal advice about making operational changes in your franchise network, our experienced franchise lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0808 196 8584 or visit our membership page.
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