14 July 2021
14 July 2021
It’s no secret that opening a new restaurant is a gamble. But opening a franchised location is a safer bet than starting from scratch with a new, independent restaurant, right? Wrong.
Gary Occhiogrosso, Founder of Franchise Growth Solutions, explains that "on a good day; you won't lose money on a franchise sale". The failure rate of franchised restaurants is no lower than the failure rate of independent restaurants: 30% close or change ownership within the first year, jumping to 60% within 3 years.
Franchising is notoriously difficult, even for restaurants with an established track record - 4,000 Subway franchises failed in less than 3 years.
But why is running a successful franchise so difficult?
Often, it’s because restaurants fail to strike the right balance. The appeal of buying a franchise is the opportunity to manage a location independently whilst being supported by an established, experienced brand.
Restaurants need to juggle the tasks of empowering a franchise to operate autonomously and ensuring a consistent customer experience in every branch. It's a balancing act of providing enough support without micromanaging.
Disjointed communication between head office and franchises has created a situation where only 28% of millennial frontline employees find it easy to understand whether their work meets company expectations. Restaurants want to give franchises the freedom to operate autonomously, but if head office doesn't clearly communicate what standards are and make sure they’re implemented, they can’t expect franchises to be able to meet them.
Failure to communicate and standardize processes effectively across franchises lead to inconsistencies across locations in key factors of the brand identity, such as food presentation, the taste of menu items, marketing materials, service style and hygiene standards.
Occhiogrosso points out that ‘People buy brands. When customers step into a successful franchised restaurant, there is usually a theme and a brand voice surrounding the guest’. Inconsistencies across franchised restaurants disrupt a customer’s experience of the brand, impacting a restaurant’s reputation.
Furthermore, when head office doesn’t have clear visibility into operations in franchised restaurants, it takes longer to foresee and correct mistakes and more audits are needed to ensure compliance with standards and processes.
This lack of visibility can have drastic consequences, as Burger King previously found out when they had to terminate the contracts of 89 franchises in Germany after discovering that they had been violating food and hygiene regulations and treating staff poorly.
Successful franchises need to be supported, and sending over a heavy manual or large file filled with training for employees to complete is not a good way to do this. Real support is providing all employees with equal access to training at their point of need and empowering them to want to learn and improve.
‘Microlearning’ makes this possible. When employees need to understand how to complete a task like cleaning a new piece of kitchen equipment or upselling a new menu item, they can watch a 3 minute video or complete a short course teaching them how to do it on the job.
High quality microlearning is user-friendly, allows employees to learn continuously and equips them to feel empowered at work. Gamified features such as tournaments, battles and leaderboards make workplace training into a fun activity that employees will actually want to complete.
70% of frontline employees know that they would find app-based learning easier than traditional information-dump style training. Using a mobile-first approach to learning ensures that all employees can access all the information they need at all times, so frontline workers in franchised locations always have brand guidelines at their fingertips.
34% of frontline employees feel disconnected from their organization, so it’s unsurprising that franchises struggle with inconsistencies as employees feel out of the loop.
76% of employees would feel more connected if they could access company communications on a mobile device, so restaurants can support franchises by implementing a BYOD policy or providing restaurant employees with mobile devices to use at work. A designated app for workplace communication establishes a sense of community across the entire restaurant network and provides a space to ask for help, share updates and express questions or concerns.
Modelling internal communications after social media will not only enable head office to share important updates, but also offer a space to celebrate successes such as providing shout-outs to the most successful franchised locations or the franchise teams who complete the most training. Franchisees who know that they are valued will feel more empowered and will be more likely to perform their best.
Make instructions interactive so that tasks are faster and easier for busy restaurant teams to complete. Interactive forms such as digital checklists and ‘to-dos’ to be marked as complete will ensure that processes like opening and closing the store are consistent across every branch and will make sure that nothing is missed.
Restaurant head offices need visibility into how accurately franchises are executing brand standards for quality assurance. The best way to make this happen is to digitize everything (as HQ have no instant visibility into paper forms!)
When head office can review and approve tasks in real time, franchise employees can receive instant feedback and be confident that they are working to brand guidelines. Centralizing processes in this way ensures a cohesive customer experience across all branches.
It’s also useful for head office to be able to analyze inventory reports to review whether franchisees are operating efficiently, using the right suppliers and not creating expensive wastage. Investing in the right tool will offer visibility into franchise operations, so restaurants can give restaurants the freedom to work autonomously while also ensuring that head office can react to problems before they arise.
To find out about how YOOBIC can connect your franchise teams with digitized processes, mobile learning and engaging communications, schedule a demo today!
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