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Monday 6th February, 2023

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Are you a trustworthy franchisor?

Insight

Are you a trustworthy franchisor?

Stephane Breault outlines a new leadership mindset based on the five pillars of building trust amongst your workforce

We are currently living in constantly chaotic times that are becoming more complex than ever before. Franchising is experiencing the effects of this chaos on several levels. One of the most obvious is that leaders are now facing an unprecedented confidence crisis.

The Trust Edge Leadership Institute’s Trust Outlook 2022 report highlights the following facts:

  • 55 per cent of people in a workplace have not dealt with a leader they could fully trust
  • 55 per cent do not trust their current employer
  • 50 per cent indicate that a trustworthy leader would reduce their fear of a crisis.

Based on these facts, we can infer that at least 50 per cent of your workforce/network has little or no confidence in you! OUCH!

Breakdown of trust

Disproportionate expectations are the source of trust breaking down. The challenge in franchising is that to go into business, the franchisee must put their confidence in you. By the same token, their expectations are extraordinarily high, and the risks of failure are equally high.

Building and maintaining a high level of trust requires leaders to understand the factors that can influence trust. In my opinion, there are three main ones.

  1. The franchisee is the CEO of their company

‘Being in business for yourself but not by yourself’ is a classic adage in franchising. This business relationship carries with it a natural conflict that, without the development of consistent network management practices every day and in every initiative the franchisor takes, a breach of trust is likely. Therefore, it is very important for leaders to ‘manage’ expectations both before the signing of the franchise agreement and during the day-to-day business relationship.

  1. Partnership synergy

The nature of the franchise partnership relies on synergy: the success of one generates success for the other, and vice versa. A breach of trust between the two parties will inevitably create an increased risk of failure.

  1. Franchisor leadership in today’s reality

Most franchisors are SMEs. An SME has a limited number of employees, making them easy to manage. However, in franchising, it’s different. A franchise is a network that is composed of several franchisee owners dispersed across a given territory. This means you must think differently about leadership.

In this context, authoritative leadership cannot work. Rather, it is important to opt for people-centric leadership – one that is committed to developing franchisees and their growth in order to foster responsibility and personal discipline. Unfortunately, leadership is poorly understood by franchisors because it is underdeveloped. The basic trend I see among franchisors is to lead a network in an authoritarian manner instead of seeking commitment. This type of leadership no longer works.

We are in 2022 – not 1972. A ‘misalignment’ in the exercise of leadership between the needs of the franchisees and those of the franchisor, therefore, creates a breach of trust in both the short and medium term.

The five pillars of trust

At Imagine Franchise, we work with franchisors who decide to take up the challenge of developing a new leadership mindset with their franchisees to achieve their vision. By first working on these five pillars, they are laying the foundation to create trust and wealth that were previously unattainable.

  1. Do the right thing

By doing the right thing, the franchisor demonstrates that they are not taking the easy way out.

For example, one of my clients decided to stop development for 12 months in order to proceed with a complete turnaround of their network operations. Naturally, its profits were affected, but following this turnaround, the profitability of the franchisees increased. The rapid organic growth quickly compensated for the loss of revenue.

  1. Coping with adversity

Franchisees engage with the franchisor when the franchisor helps them deal with adversity.

One of the situations often experienced is a bad start that puts the franchisee financially in peril. By reacting quickly and supporting the franchisee before major issues arise, a franchisor can not only save the franchise but also build confidence within the network by sending the message that when things go wrong, help is just around the corner.

  1. Ensuring mutual success

Franchisees will put their trust in a leader who balances the creation of wealth between the franchisees and himself, one of the major reasons for the franchise partnership.

The perception that a franchisor is lining their pockets is a common trust breaker.

On the flip side, demonstrating by being transparent and the concrete actions the franchisor is taking to improve the wealth for all stakeholders is a surefire way to gain trust.

  1. Little things done right

When the little things are consistently done correctly, franchisees buy in more easily. Trust is stronger because they know the franchisor understands their reality.

One way to increase confidence that the little things are being taken care of is to involve franchisees in projects. Create joint, decision-making work groups to resolve problems and provide innovative solutions to help the business grow.

  1. Results that make the difference

There is nothing like achieving results to build and maintain trust.

It is therefore wise for leaders to create comprehensive business plans (not just sales plans) with franchisees.

Regularly reviewing feedback as well as celebrating improvements and milestones go a long way to help the franchisee realize the benefits of working with a franchisor.

Trust helps to build wealth

Today’s franchise leaders have quite a challenge on their hands! However, hurdles can be overcome by ensuring that trust is built and nurtured. This requires a commitment to go beyond the call of duty – and a profound belief that it is the strength of people that creates a thriving network.

Franchising is not just about money. It’s also about people – people with whom franchise leaders will build powerful brands. Powerful brands, in turn, create wealth for everyone involved in the business.

The author

Stephane Breault, MBA, is CEO of Imagine Franchise and works with franchise system CEOs to maximize the impact of their leadership to enable them to realize their organization’s full potential.

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