Store-swapping, peer learning road trips amongst best practices in managing relationships with franchisees
Ferguson Plarre Bakehouses, Mrs Fields and Soul Origin reveal how they communicate to their network.
Ensuring that good relationships are maintained is arguably one of the keys to success for any business, perhaps more so for companies in the multi-site restaurant industry. Efficient, transparent, and constant communication between the franchisor and its franchisees remains to be a crucial factor for a chain to flourish amidst intense market competition.
Franchisor-franchisee communications
With over 65 stores in Australia, Ferguson Plarre Bakehouses also knows the value of two-way communication in franchise systems. CEO Steve Plarre said, “We seek engagement and feedback from all franchisees around our marketing and promotions. Every campaign has a set of agreed targets and we report back to the network on how we’ve performed against those targets, what we’ve learned and what we intend to do differently next time.”
In 2019, the firm also launched the High Performers Group, a forum that invites its network of franchisees to learn from the best performing stores across key areas of the business. “This sharing of knowledge has already resulted in thousands of dollars of savings by some franchisees. Some store operators have even swapped stores for a period of time to genuinely see what it’s like in someone else’s outlet, to help them truly understand how to deliver those efficiencies into their own business,” said Plarre.
Another brand that also attests to this is Soul Origin, which hit its 100th store milestone in 2018. “Ensuring that we foster an environment which encourages two way, mutually beneficial communication is always top of mind for the team at support centre. This transparency means we welcome candid conversations and are open to talking about the hard truths whilst approaching each interaction with positive intent to ensure that everyone is focussed on a common goal,” said Sally Nathan, National Manager for Franchising at Soul Origin.
Moreover, the company’s Franchise Advisory Council (FAC) ensures that all concerns and insights from their network of franchisees are heard and addressed. “The increased emphasis that we have placed on the FAC has seen excellent results with FAC members working constructively with the franchisor to influence positive change across the network,” added Nathan.
Regular meetings are also one way to ensure timely communication with franchise partners. Brands such as Soul Origin and Mrs. Fields conduct such meetings quarterly.
According to Peter Elligett, CEO of Mrs. Fields, “This is a great way to communicate directly with the franchisees. It gives us an opportunity to discuss issues within the business, deal with specific problems on a local level, harness ideas from the franchise group and vote on proposed marketing initiatives.”
For Soul Origin’s quarterly state-based business meetings, each department presents the key initiatives in the business to the franchise partner network. “The support centre team also utilises a Learning Management System (LMS) which provides the business with the opportunity to push out online training modules, communications and interactive forums to franchise partners and their teams in store,” said Nathan.
Another way to facilitate peer learning is through onsite visits. Plarre said their business support managers have regular peer learning road trips with their franchises. “This involves getting franchisees together in a couple of cars and visiting other stores and operators to see how they do things differently. Facilitating this peer learning framework has been a terrific vehicle for change and improvement in the network,” he added.
The same is true for Mrs. Fields, where scheduled, targeted, and structured visits by business development managers are done to ensure that the franchise partners are kept up to date and have real input back into the system.
Whilst these traditional methods prove to be beneficial and effective for these brands, digital initiatives are not to be ignored.
Nathan revealed that Soul Origin has recently begun utilising a tool in its support centre which allows the firm to create short video messages to push out to its stores via text message. “This has proven to be a very effective way in which we can communicate with our network on a broader scale,” she said.
Meanwhile, Ferguson Plarre Bakehouses’ CEO newsletter is published quarterly in both PDF and video formats. Plarre noted that the videos have been very successful in engaging the franchisees. “We [also] host quarterly POD sessions for franchisees. We use these to introduce and seek feedback on new product ranges and to demonstrate any new processes or technologies we’ve been working on,” he added.
Profitability issues
As with all other businesses, ensuring profitability amidst expansion initiatives remains a challenge. Growing both the topline and bottomline figures should be one of the key priorities. “Our innovation around NPD [new product development] is always considered in the context of what it will deliver to the franchisees’ bottom line – not just the top line sales. Products must satisfy a minimum gross profit return for franchisees before it is approved,” noted Plarre.
Similarly, franchisee profitability is also one of the leading considerations for Soul Origin. Nathan reckoned that undeniably, increasing operating costs (whether it be increases in rental costs, rising labour costs, the emergence of food delivery aggregator, etc.) have been a strain on those business owners operating in traditional bricks and mortar retail operations.
“With these pressures in mind, Soul Origin has focussed its future expansion strategy on sustainable growth through its traditional business model. The team is also actively working on alternate operating models that might assist our brand to enter sites that we were not previously well-poised to consider for example; universities, smaller satellite models and regional stores. From a support perspective, there are a number of initiatives being investigated to assist our partners ongoing through reducing operating costs across operations, in-store equipment, supply chain and procurement,” she said.
True enough, rising operational costs has been one of the most notable challenges for restaurants in terms of profitability. Elligett noted that over the past few years, mall-based food retail has been particularly difficult with a substantial increase in competition and a downturn in traffic, as well as raw material cost increases resulting from the drought.
“As the manufacturer, we have been able to insulate our franchise partners to a large extent from product increases. Growth is important for us as we can achieve greater economies for the group however, we will not compromise on the quality of sites or the rent that we are prepared to pay in the current retail economy. For the first time in my career, landlords are lowering their expectations on rents which flows straight back to the franchisees’ profitability,” he added.
In order to reduce labour costs and streamline some processes, Plarre said technological innovations have been essential. “This started in the early 2000’s when we launched our world-first Designacake tool where customers could design their cakes online and not engage staff during expensive labour hours at work. More recently we’ve launched a new quality control app and a new ordering app. Both of these innovations have been developed as a direct result of feedback from franchisees and will deliver meaningful savings to the franchisees,” he added.
Support excellence
Ferguson Plarre Bakehouses, Soul Origin, and Mrs. Fields all made it to the Top 10 in the recently held Topfranchise Awards organised by service research agency 10 Thousand Feet. The annual Topfranchise Awards recognises best practices within the franchising sector across six categories; Marketing, Branding, Passion, Support, Lifestyle and Expansion.
“Ferguson Plarre Bakehouses, Soul Origin, and Mrs. Fields excelled in the category of Support, which encompasses a variety of key touchpoints with franchisees,” said Ian Krawitz, Founder and Head of Intelligence at 10 Thousand Feet.
Krawitz noted that in 2019, Ferguson Plarre Bakehouses made strong gains in support due to their approach to mentoring and guiding franchisees, both in a one-on-one setting as well as through a number of new group-wide initiatives centred on knowledge sharing.
He added that for Soul Origin, one of the biggest wins has been their “ability to maintain their franchisees’ feeling of being part of a team in a rapidly growing system.” For Mrs. Fields, it was the quick response to franchisee support enquiries. The quarterly group meetings also foster the team culture in the franchise system and ensure alignment on key initiatives.
