Want to streamline operations, grow your business or simply improve communication with the operators in your system? Then consider building a franchisee advisory board. Boards should include four to six franchisees and typically meet at least quarterly to provide a sounding board for the franchisor. If you think a franchisee advisory board could help your concept, consider the following pointers:
Wait until you’re ready
Establishing an advisory board means you’re going to hear lots of suggestions about potential changes large and small. If you have limited capacity for meetings—let alone instituting any improvements that come out of them—it may not be the right time to start a franchisee advisory board. “Don’t rush to establish a board until you are ready to use the members’ talent and listen to their input,” says Michael Seid, a West Hartford, Connecticut-based franchise consultant.
When selecting board members, look for a range of experience. For example, you should recruit owners of single-restaurant franchises and those with multiple restaurants. Consider geographic diversity as well as both large and small markets. You may want to include one or two relatively new franchisees, but to get the most from your board, most members should be relatively experienced
Prepare for tough questions
As the head honcho, you may be surrounded by people who agree with your every move. Don’t expect that attitude from franchisees, who typically relish the opportunity to second-guess your every decision. “Owners fall into the trap of honestly believing that they understand everything about unit economics or how a location works with consumers. Working with a good advisory board changes that paradigm,” says Seid.
Respect the fact that your board members have skin in the game
Whether you’re introducing a new design or revamping the menu, expect franchisees to spot unexpected consequences and costs in a heartbeat. “Franchisees tend to be far more skeptical than corporate staff when it comes to ideas that put their money at risk for uncertain gains,” says Jeff Elgin, CEO of FranChoice, which helps match potential buyers with franchise opportunities. “This is one of the best reasons to have an advisory board.”
Keep it in perspective
Any advice you glean from a franchise advisory board is just that: advice. It’s not a vote or a command. “The reason I like advisory boards is that, at the end of the day, you don’t have to listen to them,” says Tim Bryant, a Maine-based attorney who specializes in franchising.
Franchise advisory boards are critical to a franchised company’s success. DineEquity franchisees have invested millions, and in some cases tens of millions, of dollars into our brands. What I find exciting about the franchise business is that they are always willing to challenge you—and that’s good for them and good for us.
To be successful a franchisor needs regular input from its franchisees. This feedback needs to be both informal—phone calls, market visits, casual conversations, and formal—franchisee advisory boards, advisory committees, surveys, etc. These groups can help you think about the business at a strategic level.
For advisory boards to be successful all constituents must understand their role. They are advisory—they don’t approve, they don’t decide—they inform and provide feedback. The input must be taken seriously and weighed carefully by the franchisor. The franchise community must understand the role and regular communication must provide insight into the discussions that take place and how the board and the franchisor are working together to improve the overall system.
Finally, franchisors must also have a mechanism to get feedback from the entire franchise community. An advisory board should do their best to represent all of their constituents, but franchisors should vet this through regular feedback from all franchisees.