This week at Franchise Expo South in Houston, TX, I again had the honor or presenting alongside two great franchise professionals, Lee Plave and Theresa Huszka. The topic, that continues to evolve from event to event was Data 2.0 + Social Media in Franchising. In today’s world of data breaches and the use of “everything digital” for marketing, communications, transactions and so much more always has our sessions well-attended. This week’s session was no different.
Note: Thank you to the Law Firm with Zing, Plave Koch for sponsoring our session!
As I thought back to this most recent session and my repeated reference to developing a Social Media P&L, I thought about a past article I wrote that was picked up by several online publications. Always thinking about the many questions about return on investment on social media efforts, I thought it timely and appropriate to share this article once again.
True Social Media ROI – Relationship & Community Building
Certainly, return-on-investment (ROI) is important but too many miss the boat by trying to make social media a line-item on their financials. First, social media is not advertising. So to think there will be a definitive ROI based entirely upon revenue generated against dollars invested is absolutely off-base.
One needs to look at social media as the glue that can hold several key functions of the business together such as bringing the customer experience to marketing complete with sharing operations role in making the experience positively memorable, and letting the end-user know about its objectives.
Complicated? No, but not without proper planning and a long-term vision. Further, social media is vehicle that transports information from one function to another – it’s a conduit.
Social media is the communications tool that should lend itself to truth, trust and transparency in establishing or strengthening the business relationship. Last, social media is the tool that enables a brand or business to earn the right to “ask” for business from customers, clients and investors alike as it provides the platform for them to virtually see how your business operates, how it communicates and how it is perceived. The key here is in establishing community. The necessary steps are relatively simple to follow… Share, Interact, Engage and then, only then have you earned the right for a Call-to-Action. Yes, that’s when the right has been earned.
It does take training for social media to be utilized effectively at any level. But even more so at the local level as franchisees typically cannot afford the luxury of adding human resources to handle their social media. So, training and guidance is paramount. As is open communication and interaction between franchisor and franchisee in managing and monitoring social media. Yes, working together with common goals and objectives, as should always be the case in the franchise relationship. This is just another component of what I believe should be the everyday goal of working towards a truly interdependent relationship. The same should be said about all relationships in a business [and franchise] environment – franchisor/franchisee, employer/employee, business/customer, etc… Yes, it should be the norm, and not the exception.
Last summer, just prior to completing the acquisition of Franchise Foundry and accepting the position of CEO at FranchisEsource Brands International, I was interviewed by Lizette Pirtle, CEO of Expansion Experts. Lizette had the vision of creating a series that, in essence would document franchise success AND provide information to newcomers to franchising that would help them succeed. I am humbled to have been asked to share my perspective. More importantly, I am honored to call Lizette a friend!
Franchise Success: It is All in the Culture
Paul Segreto, CFE, is the CEO and President of Franchise Foundry and serves as the CEO of several of their clients’ companies. I met Paul in 2009 upon my first engagement in Social Media. From day one it was obvious that Paul was a man of honor. I loved his honesty, his straightforward style, his heart, his thirst for knowledge–and most of all, his passion for franchising and for sharing and helping others. Paul has a rich franchising history having been a franchisee as well as leading several franchise companies in many management roles. He is the first one to talk about the ups and downs of his career and all the lessons he has taken from both turns. Paul is always filled with great ideas; his mind never stops, always learning, and always passing on the lessons. He never rests and never gives up; his tenacity and perseverance are equal to none. I was thus delighted when he agreed to be part of this study on Franchise Success.
Paul first defined Franchise Success academically as: “the combination of bottom line profitability and bottom up profitability and growth.” In other words, “You can’t kick in high gear the growth of your franchise network until you have unit and overall company profitability,” Paul explains. “But, it is really all about culture,” he shares as he starts getting into his passion. “Franchise Success is about building a culture that creates positive, memorable experiences at all levels and at all times. Many franchisors get this at the customer’s level, but forget about it when it comes to their franchisees or their staff. It has to be a culture that produces these types of experiences for everyone,” Paul goes on.
“So how do you do that?” I asked. According to Paul, it comes from the realization that success is not a permanent state. He says, “You can go from total success to total failure in an instant if you take your eye off the goal. You must have processes and procedures in place and you must make sure that they are followed at all times. You also must be constantly aware of and foster the interdependent relationship that exists between the franchisor and the franchisee.”
Paul considers the greatest challenge he’s had to face in franchising as “getting franchisees to realize that you truly have their best interest in mind. When a relationship is fragmented, trust disappears, and without it, healthy relationships can’t exist.” Paul has always found himself in situations where he has had to introduce a new way of doing things and has inherited cultures that haven’t been the most conducive to true and honest communication. Although he thrives in the challenges of making a difference and turning around companies, he also has to deal with recreating rather than creating, which is always more difficult to do.
Paul believes that as important as trust is in a company’s culture so is the resilience of its members. The ability to change is crucial for the longevity of franchise companies. “Moving your brand forward requires you and all of your franchisees and staff members to adapt to change. Comfort levels are shaken when we embrace change, so not everyone is going to like you; and I am OK with that,” Paul shares.
Paul deals with these challenges in his usual honest and straightforward style: “By putting my money where my mouth is; by knowing that I must earn the right to people’s trust, that I must lead by example and that I must put my ego aside and say ‘I am sorry’ when needed and try a different approach.” Paul does not sugar coat his communications with franchisees, or anyone else for that matter. He helps them understand how their results are directly related to their actions, and also to their lack of action. The company cultures he creates are not only resilient and trust-filled, but they also include personal accountability at all levels as well as transparency.
When talking about what is required to replicate success, my conversation with Paul got even more interesting. “Here we face an oxymoron. When we think of franchising we think of doing the same thing over and over again all over the place; but to really replicate success franchisors need to be discerning and they need to modify the concept according to the conditions present, be it economic or regional differences.” Paul continues, “For example, take McDonald’s, why have they been so successful? They have adapted. Today the locations look different depending on where they are. You have urban locations, suburban ones, and specialty ones like the one in Asheville, NC, where you live. The menus also change. So, what’s stays the same? The culture: clean bathrooms, attention to details, management controls, and some core menu items.” Paul summarizes, “To replicate success, a franchisor must be quick to adapt and change and tweak the concept slightly to ensure it works in the new area of growth or under new economic conditions without compromising the culture that is identified with the brand.”
Paul has some great tips for those who are considering franchising their businesses. He says:
- Make sure you understand that when you franchise you are no longer in the business you used to be. You are now in the business of franchising, which is all about process, procedures and relationships.
- Keep your eye on the details: ALL OF THEM.
- Give back to the community, and remember you are now entering the franchise community.
- And, most importantly: From the beginning make sure to build a culture that produces POSITIVE, MEMORABLE EXPERIENCES AT ALL LEVELS AND ALL OF THE TIME.
Many, including myself, refer to franchising as an industry… even though we know it’s really not an industry. A business model is probably one of the better definitions, but what does that really mean?
When referring to a franchise, even many within franchising choose from a variety of terms as a point of reference – franchise organization, franchise system, franchise company.
Of course, there’s also the varying terms relating to the franchise relationship – franchisee, franchise partner and not to mention the slang, zee. And to the other side of the relationship – franchisor, head office, corporate office, parent company… and yes, zor.
And what’s the difference between franchisor and franchiser?
And, franchise locations are independently owned and operated. Yet, the franchise relationship is interdependent… or at least it should be interdependent and not dependent or independent upon… Well, you get it, right?
Now let’s look at the people serving the franchise community. Yep, franchise community is another reference for the franchise list above but let’s move on. Franchise consultants, do they sell or consult? How about franchise brokers, sales agents, sales representatives, and again, franchise consultants. Whew!
Moving down the chain there are franchise suppliers, service providers and vendors… What’s the difference? Preferred or approved? Is there really a difference?
Of course, there are references to segments within franchising such as master franchising and sub-franchising… Which one is correct? And, isn’t the sub-franchisor actually the master franchisee? I guess it all depends on which end of the relationship one is on.
How about now – confused yet?
Franchise services means what, and providing services to who? Franchisee to end-user? Franchisor to franchisee? Franchise service provider to franchisor and/or franchisee?
Same can be said of franchise marketing, right? Does marketing in a B2B or B2C scenario but within a franchise environment mean that it’s franchise marketing? Or, is franchise marketing actually marketing to franchise candidates?
Speaking about franchise candidates, when is a candidate actually a candidate and not a lead or just an interested party? Does this fall under franchise sales or franchise development? And who’s in charge – the VP of Franchise Sales, VP of Franchise Development, or VP of Franchising?
And then there’s reference to franchise professionals. Is a franchisee a franchise professional? How about if the franchisee is a multi-unit franchisee with 25 locations? How about a franchise attorney? Franchise service provider?
If a franchise executive is a franchise professional, at what level of management does one begin to be considered a franchise professional? How about within the franchise organization itself? Secretary, if their support is purely administrative as opposed to an admin that actually communicates with franchisees?
Oh, and should the CEO of a franchise company be considered a franchisor as we often refer to them as such at franchise events?
Ironic how franchising is the replicating of a system with focus on consistency in image, appearance, product and service from one location to another. Yet, there’s little consistency in the terminology used to define many aspects of franchising.