Franchisors need strong listening and communication skills, as well as a strong brand foundation, when looking to partner with multi-unit franchisees.
Franchising a restaurant brand is all about building the brand and advancing the brand presence. Partnering with single-unit franchises is the most common and often most viable approach, but faster growth, especially in hot markets, is best attained in partnering with a multi-unit franchisee.
It sounds easy but it’s not a simple strategy for many reasons. One is that multi-unit franchisees are in big demand, especially those that have proved successful. A second is that a franchisor needs to be ready to support a large partner and already have attractive brand characteristics which will lure the multi-unit operator. Third, a franchisor needs to have strong skills in everything from communication channels to technology adoption.
Those succeeding in attracting multi-unit franchisees typically have specific strategies in place, focused on a range of issues — from finding the right multi-unit partner to ensuring a successful long-lasting partnership.
Those strategies, as well as tips and lessons learned, were the topic a panel talk at the Restaurant Franchising Innovation Summit event, held March 30-April 1, hosted by Networld Media Group.
The conference provides a forum for executives from leading brands to share success stories and how they are innovating to grow franchises.
The panel session, “Attracting Multi-Unit Franchisees,” was sponsored by SnergySuite and moderated by Brett Berger, VP of sales at SynergySuite. Participants included Rafik Farouk, senior director of global business development at PF Chang’s; Brian Farris, chief development officer at WOWworks; Drew Kellogg, president and CEO of Oath Pizza and Clifton Rutledge, CEO of Shipley Do-Nuts.
Building the needed culture
In opening the discussion Berger stated that the franchising industry is focused on the “humanization” of the process that needs to take place between a franchisor and franchisee.
Trust is a very big part of the relationship and part of that trust is just removing barriers — just making it easy, making it less difficult. [for that multi-unit operator],” he said. “It’s not any ingredient by itself as it’s a combination of good leadership, good communication, humanization, good technology, and I think it all starts with good leadership.”
At PF Chang’s a key aspect to a successful franchisor-multi-unit franchisee partnership is all about brand culture and doing business with a franchisee that has the same goals of the franchisor.
“If we define what’s a really good franchise it’s one that fits the culture. The partners that started with us, back in 2009, are as strong as each other regardless of the country or the region they are in,” said Farouk. “A great partner is a partner that continues to grow your brand, day in and day out, that continues to innovate with your help, one in which you, as a franchisee, and the franchisee continue to find a middle ground that helps the brand succeed, grow and prosper over the years.”
Farouk, as well as the other presenters, said the COVID-19 pandemic, and how it radically changed the restaurant industry, is a good example of how humanization is taking place and how the franchisor and franchisee relationship has changed.
“At that time [the pandemic] the franchisor did not have the answers. No one knew what the playbook was but by collaborating together and figuring out new ways of communication the franchisor learned how to be there for the franchisee,” he said. “We believe we are in the relationship business [with franchisees] and we lead the franchisee by example.”
When it comes to identifying a strong potential multi-unit franchisee Farris said there are more than a few definitions of the multi-unit franchisee. It could be an operator growing stores or a single operator “working the heck out of store,” which has a great crew that delivers the brand at a high level.
“We spend a small amount of time meeting our franchisees and we spend the majority of the time nurturing the relationship so when we look at what makes a great franchisee it’s really incumbent on us to be a really great franchisor,” said Farris. The goal, he said, is “understanding where the franchisee is in their journey and what they need specifically in order to help them grow to help them achieve the best that they can be.”
One big key to success is what Farris called the “sundown rule.” The rule requires a franchise to respond to a franchise’s call or communication by sundown the same day.
“The worst thing you can do is leave them hanging because they’re already going to feel alone. You have to be responsive. Get on it [the issue] quick, use the phone,” he said.
“Them knowing you are there for them goes miles and miles in the relationship.”
A different kind of relationship
Every franchisor looking to expand is seeking the “silver bullet,” said Farris. That’s a multi-franchisee with a strong infrastructure in place, a solid track record of success and one that is looking to build off that foundation.
“To attract them is a very different sale than what we’re used to with a single unit operator. The multi-unit franchisee is going to be a big part of your organization. They are very sophisticated. As a franchisor, as you’ re going after these large multi-unit concepts there is going to be give and take that you’re not used to if you’re used to single unit owners,” he said.
Rutledge shared a philosophy at his brand — that there are zero cash registers in its support center.
“No money is made inside that building and we call it the support center for a reason. Our customers, 188 franchises out there, at 300-plus shops, they are ‘the customer’ and they can’t be just a number. At The end of the day that franchise’s livelihood is on the line, so you have to get their input and have an open dialogue back and forth.”
Meeting multi-unit operator needs
A key aspect to partnering with multi-unit franchisees is providing what they’re looking for, according to the panelists.
“It’s all about trust but first of all they have to love the brand and it has to be complimentary to their business,” said Farris. “They want to know they are special, and they are special, and they want that from the get-go.”
Listening and communication are very important, said Kellogg, and franchisors need to find a multi-unit franchisee that understands what the customer experience is going to look like and everything else can then be built off that.
“There needs to be an understanding of the mission and that really starts with all the people elements. We have to be exceptional listeners and if we’re not we have to get really, really good at that,” he said, adding, Our franchisees are the experts on how we improve and how we get sharper. We have to be exceptional listeners to be the best culture we can be.”
At Shipley Do-Nuts franchising is all about relationships and asking a specific question.
“Is this person going to be a good franchisee or is he going to be a good operator and there’s a big difference there,” said Rutledge. “I’ve seen a lot of good operators who weren’t good franchisees and those don’t get to grow so. You want the franchisees who see the dream, see the vision and it’s up to the franchisor to work with them.”
Where technology plays in
Luring a successful multi-unit franchisor also means having alluring technology and proving that the franchisor is all about embracing technology, said the panelists.
“We’re staying as sharp as we can and that goes a long way,” said Kellogg.
At WOWorks it’s a “requirement that we’re providing good technology,” said Farris, adding technology, in terms of brand importance, has risen to the level of having a great product. “So much of the technology today is aimed squarely at the employment challenges. It used to be a facilitator; now it’s got to be a core competency in what we do today.”
And when it comes to technology decisions, a franchisor must consider if its something they can deploy across the board, said Farouk.
“The discipline has to be compatible to travel across,” he said. “Technology today is not only for your organization but every organization that is attached to you.”
In Rutledge’s view technology is now a must have for any franchisor.
“COVID showed that if you didn’t have drive-thru, if you didn’t have order ahead, restaurants had to close,” he said. “It is a cumbersome challenge. The key is to hire people much smarter than you that know how to do all that and that’s what we’ve done.”