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What Makes an Effective Franchise Leader

By Ed Teixeira

The effective leadership of a franchise company requires a particular approach not applicable to most companies. This article presents five key areas that franchise executives should embody as a part of their leadership style.

Franchise companies differ from the traditional businesses based upon the very concept of franchising. Whereas, the majority of companies directly employ those who operate and manage the business, the franchisor relies upon its franchisees to operate the business with the support of the franchisor staff. This relationship requires a particular style of leadership that the majority of non-franchise companies don’t.

When one considers the great franchise leaders such as Ray Kroc, Harland Sanders and Dave Thomas, each had leadership traits that were ideally suited to franchise organizations.

These traits are reflected in the following list of effective franchise leadership practices:

1. A Willingness to Listen:
Unlike most business organizations, franchisors have two key constituencies; their franchisees and the customers. This relationship requires the franchise leader to have an open ear to both their franchisees and the customers. Although it’s important that feedback and communication flow upward in business organizations, it’s especially critical for a franchise company. For this to happen there must be a requirement by leadership for its team to listen to its franchisees.

2. Promotes Inclusiveness:
Based upon the relationship between the franchisee and franchisor there must be a process whereby franchisees are included in key decisions that will directly impact franchise operations. Since both the franchisor and its franchisees serve the same customer decisions that affect the customer ought to be shared by both entities.

3. Remains Involved:
The effective franchise leader has such a passion for the franchise brand and a quest for excellence that they remain deeply involved in the franchise business. Don’t confuse this behavior with the leader that meddles in the company, often frustrating subordinates as well as franchisees. Rather, there is a need to know that the franchise is on the right path. Compare this approach, with the franchise leader that grows more distant as the franchise grows larger.

4. Maintains Mutual Profitability:
There is a balance within the franchise organization where the franchisees and franchisor are mutually profitable. There is a true objective on the part of the effective franchise leader. In the case of the enduring and successful franchise programs I would attribute this success more to their leadership rather than the product itself. After all, it’s the leader of the franchise, who with their team, establishes the goals of the franchise and sets the course to achieve these goals. Having a network of profitable franchisees is one of these goals.

5. Innovates with the Buy-In:
When introducing new programs and concepts that have a significant impact upon the franchise operation the leader will strive to obtain a buy-in from the franchisees. It’s the franchisees that deal with customers on a day to day basis and as such possess good business knowledge. Whether it’s through the use of a marketing committee or special task force, the franchise leader should engage representative franchisees in the creation and initial roll out of new products and services. As a franchise system grows and the franchisee association continues to garner strength, franchise leadership should be cognizant of this factor when introducing major operational changes.

Since franchise organizations have attributes that other business entities don’t have, it’s important that the franchise leader focus on certain areas. A willingness to listen to their franchisees and including them in the deliberative process of creating new products and services are two examples of these important areas.