MARKET FOCUS <b>Franchise Communications</b>: Family brand values

Franchisees must work both for themselves and for their parents' reputations.

Franchisees must work both for themselves and for their parents' reputations.

Effective employee communications is recognized as an essential part of any company's brand-building efforts. Employees are the first points of contact customers deal with, and it's from them that customers form their impressions of a company and its brand. But what if those front-line troops aren't employees, but rather independent business people with different priorities than a parent firm might have? Companies that franchise face that challenge on a daily basis in their franchisee communications. Franchisees essentially operate their businesses with all the worries and issues that brings. Their focus is often on day-to-day operations and meeting their own financial objectives. But for the franchisor, it is also the face of the company to the public. Keeping the franchisor happy means it'll do a better job of customer service, and both the franchisees and franchisors should gain from that. "Great companies realize that a brand doesn't exist in their mind. The people closest to the customer, those are the people who create your brand," says Maril MacDonald, a partner at Matha MacDonald, a Chicago-based communications firm. Communications with franchisees The recession has sent former business executives laid off from their old jobs into the world of franchising. That's made for a very business-savvy group of new franchisees. And the world of franchising was changing even before the recession. In addition to the traditional individual franchise, today companies sell area and regional franchises to other companies that are in the business of operating scores, if not hundreds, of outlets as franchisees. "Franchisees are becoming a lot more sophisticated than they once were," says Greg Pitkoff, VP and group manager for franchising at Nichol-CKPR in New York, a PR agency that works with a variety of franchise clients. These developments have prompted many franchisors to raise the level of their franchisee communications. Some have gone to nontraditional means, such as Cold Stone Creamery, which created a franchisee ombudsman's office to watch out for the interest of its franchisees. Many others are using traditional employee communications techniques and tailoring them to the needs and wants of franchisees. They agree that effective franchisee communications involve a high level of interaction between a franchisor and franchisees. Traditional tools like newsletters and conference calls are important, as are web-based tools like intranets and online seminars. But personal contact between senior company executives and franchisees is as important, if not more so, than it is in employee communications. "You pretty much have to communicate with them in every possible form and forum," contends Gary Salomon, president of FastSigns, a 20-year-old Carrollton, TX-based franchisor of 450 sign and graphics shops around the US. FastSigns owner-operators want convenient delivery of information from headquarters, so the franchisor uses an e-newsletter, as well as an intranet site with bulletin boards for operators. The intranet site also has areas where static information, such as a list of events, order forms for supplies, and e-learning modules, are kept for franchisees, Salomon says. In addition to a summer meeting and convention for franchisees, company executives also hold town hall meetings, conference calls, and web-based seminars. "The more support and the more networking you do with your franchisee system the better," Salomon explains. FastSigns does an annual anonymous survey of franchisees to gauge their concerns and needs, as well, Salomon adds. While FastSigns has a mature base of franchisees, Scottsdale, AZ-based Cold Stone Creamery has ambitious growth plans that will see its franchisee base expand dramatically in coming years. With 687 stores now operating, it has another 800 franchise agreements sold and expects to open 469 stores this year. Concerned about franchisee relations during such rapid expansion, Cold Stone has developed a franchisee ombudsman's office under its VP of franchisee relations, Jim Valentino. "The key to communications is really two-way communications; it's actively listening," says Valentino. Franchisees can contact the ombudsman's office confidentially to discuss their problems and to seek suggestions and solutions. "I help them feel empowered to go handle their own issues," Valentino explains of the ombudsman's role. He receives an average of 25 calls a month but also proactively calls members of the franchisee advisory board and others to ask what issues are important to franchisees. Valentino also visits franchisees at their stores. "I'm looking for themes of what's working well and what's not," he explains. Facing difficulties Communicating with franchisees can become more difficult as a company's franchisee network grows, notes Jonathan Jaffe with Jaffe Communications in Cranford, NJ. Larger networks sometimes lose touch with franchisees, especially those who are having problems that need attention or help from headquarters, Jaffe notes. Sheri Fishman, president of Fishman Public Relations, a Deerfield, IL-based firm that works with franchisors, agrees, noting that "if 90% of the system is doing great but 10% is not, you've got to communicate with that 10%." New franchisors increasingly are addressing the image they present to franchisees while the company is still relatively small to avoid such problems when they grow. "The most important thing is to be a franchisee-friendly concept," explains Fishman. US Franchise Systems, an Atlanta-based franchisor of three hotel brands, actively seeks trade coverage when it wins awards for its franchisee agreement or is otherwise recognized by industry groups for its fair franchisee policies, points out Barbara Wiener-Fischhof, VP of corporate communications. The company was the first to earn a fair franchising deal from an industry trade group. When US Franchise Systems launches a new initiative for one of its chains, such as new, free phone calls at its Microtel Inns brand, its senior executives meet with franchisees in the field to tell them how the new initiative will benefit their businesses. Viva Enterprises in Morristown, NJ, is franchising Viva the Chef outlets - cooking schools and food stores for children. It's bringing new franchisees to its headquarters for two weeks of training rather than doing training in the field. "It's very important to me to keep the brand intact. Having training at headquarters, we're in control of the culture," says Gina Martinez, president. Conciseness and consistency Between all that franchisees want to know and all that companies want to tell them, it's easy to overwhelm franchisees with too much information. MacDonald recalls one company that found its distributors were getting 3,000 pieces of information a year from headquarters, a completely unmanageable load. "You'd never do that with your investors," she reasons, adding, "you've got to start thinking of franchisees the way you think of investors: deliver them focused, tight messages." Tamera Geesling, manager of marketing and communications with Dayton, OH-based Comfort Keepers Franchising, agrees about message conciseness and consistency. Her company tells its franchisees it wants them to become ambassadors for the company by becoming local experts on senior care, which is what their franchisees provide. Comfort Keepers has worked with Fishman to provide franchisees with PR tools they can use to gain local recognition, even conducting media training for them. Franchisee communications can encompass everything from talking about the latest store design to providing media training. The key is to frame communications in ways that are efficient and helpful for franchisees and, at the same time, allow them to see that they are a vital part of the process of growing the parent company. "The organization will not be successful if we operate as islands," Geesling explains. UPS: What brown did for franchisees Franchisees can balk at even the smallest changes to their operations if the reasons for it aren't communicated effectively. So the communications challenge Mail Boxes Etc. faced when it decided to rebrand its outlets as UPS Stores was considerable. UPS bought Mail Boxes in 2001, and "almost from day one franchisees were saying, 'What's brown [UPS] going to do for me,'" recalls Rich Hallabrin, executive director of public relations and communications. UPS tested the idea of lowering prices and putting the UPS name on stores in six markets, working with local franchisees in the fall of 2001 and into 2002. Convinced the chain would benefit from a new brand and new pricing structure, it held 84 meetings with franchisees in 23 days early last year to explain why it wanted franchisees to agree to the change. Franchisees who had tested the new brand and pricing became spokespeople for the change. "That was critical to the success of it," says Hallabrin. "When you can present them with their peers, it just does wonders for your credibility." About 90% of the 3,700 centers agreed to the change initially, and today almost all have switched, Hallabrin says. The changeover seems to be working. While franchisees cut their prices an average of 20%, volume for UPS shipments at the stores has soared, up 80% last December, a major shipping month, Hallabrin notes. An important gauge of franchisee feelings is also in positive territory - applications for multiple sites from existing franchisees are running at twice the level of last year. "That tells us the franchisees are happy with what they're getting," he says. Franchisee communications lessons Hallabrin learned in the rebranding come down to "it's always critical to know your audience and know what their cares are and address those in advance. The more you can anticipate, the better prepared you're going to be."

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