Imagine running your franchise system without any standard procedures or business systems. Without compliance, you’re running parallel to this same scenario. And your brand will be vulnerable.
Franchising is the creation of a distribution channel to build brand identity and attain market dominance. This is achieved through the selling of a license to use the brand name, products and business systems in exchange for a franchise fee and ongoing royalties.
But you probably already knew that …
So what makes the franchising model truly successful? What is it that allows you to not only attain market dominance, but also do so relatively quickly? Compliance. And compliance circles back to the above mentioned “business systems.”
A franchise concept requires rules. It requires a specific set of carefully crafted business systems and procedures in order to standardize the company’s product, goods or services. This standardization isn’t meant for just one unit or five units, but for all of the units across your entire network.
Compliance in this context refers to how franchisees comply or respond to rules explicit or implied. When we think about all that depends on the systems that were created in order to make your franchise concept succeed, essentially the foundation of your business, suddenly compliance becomes a hot topic. This is especially true when vetting prospective franchisee candidates. How willing and able are they to follow the rules and procedures set within your system?
Let’s take a look at a few reasons why compliance plays such an important role in your franchise growth success.
1. Policies and Procedures
The flexibility or rigidity of your policies and procedures will depend on your particular stage of growth. If you’re a start-up, you’re probably still trying to perfect and figure out what your operating systems need to be. As these systems are evolving and changing, compliance among your early adopters is more about helping you establish these standard practices. Compare this to the level of compliance needed to follow the policies and procedures of a franchise at the acceleration or enterprise stage. Compliance at this stage is expected.
Policies and procedures aid in the standardization of the brand. Without compliance to these standardizations, the brand is left vulnerable. Think about a policy you have established for your franchisees to follow. What would the outcome be if that policy had not been established or if it wasn’t followed system wide?
2. Quality of goods/services
We often set certain standards in order to maintain system-wide quality of the goods and/or services that we provide. Whether it’s the cell phone repair expertise provided at the local repair shop or the excellent service provided at one of your restaurant units on the other side of the country, you expect the quality to be the same at all locations.
How many of you offer a training program to your franchisees once they sign on? Probably many of you! Training programs are established to help your franchisees learn the ropes of their new business. Perhaps they’ll review the corporate goals and core mission. This is the time where franchisees will get a better idea of operations and how to follow brand standards. And part of the training will delve into how to provide quality service and if applicable your distribution networks to guarantee quality products and ordering procedures.
After your franchisees leave training, you expect them to comply with what they have learned over the past few days or weeks.
3. Cohesive goal
Finally, a franchise system is working toward one cohesive goal and achieving that goal requires compliance. If a franchise system has units all doing their own thing, from product ordering to customer offerings, store hours and brand imaging, do you really have a franchise? Is your franchise truly heading toward achieving the one goal that you set out to meet?
Compliance plays an important role in franchise system success. Without compliance to the systems, procedures and standards you’ve set for your business, you may be leaving your brand vulnerable to underperformance and quality issues. Consider what stage of growth you’re in and what level of compliance is necessary to helping your system achieve success.