Are You Getting The Most Out Of Your Royalties?

Bob McDevitt


Apr 12, 2016

During my career in franchising I have always been surprised by the number of franchisees in a system that stay on the sidelines and wait for the other franchisees to engage with the franchisor on their behalf.

The reason that’s a surprise is that everybody pays the same in franchise fees, royalties, and advertising expenses, but the franchisees who actively participate simply get more for their money.

In my experience, being more engaged with the franchisor (I’ll describe that below) yields more firsthand knowledge about the brand and the strategies being executed. It also offers opportunities to influence the direction of the brand and participate in testing new ideas. That all adds up to better unit-level decision making.

What constitutes being engaged? Below is a preliminary list.

Get to know the management of the franchisor at the highest possible level

Depending on the size of the company, the assigned direct contact with the franchisor (franchise service or business consultant) may not be at a level high enough for your input to get to the right people. Get to know the management of the franchisor at the highest possible level. In many cases that will be the CEO; in larger companies, it might be the Region or Division Vice President. Take every opportunity presented to get face to face with management. Think outside the box! Plan a trip to the main office or support center, and schedule a little time with the key players to talk about your business. Come armed with real input and issues but the real reason is to engage and get to know them in their environment.

Go to the meetings

Every franchisor, no matter how small, holds meetings. From large national meetings to regional meetings to advertising planning meetings to product rollout meetings, take the time to attend every meeting offered. There is no excuse for not attending these, but a significant number of franchisees simply don’t go. Reading the meeting minutes or stories about the meetings in the company newsletter can’t begin to replace being there, asking questions, and talking to other franchisees with similar problems and opportunities.

Participate in the Franchise Advisory Council

Most concepts have a Franchise Advisory Council (FAC) or a similar franchise group that meets regularly to advise the franchisor on issues impacting the franchisees. Most of these do much more than that, including participating in ideation sessions for the brand, listening to new product and marketing plans, getting updates on the industry and discussing available research. Sometimes these groups are handpicked by the franchisor, some are elected by their peers; no matter how the FAC is formed it is worth the effort to get on the council. If it’s elected, nominate yourself and campaign to get on; if it’s picked by the franchisor, volunteer to participate. If it doesn’t work the first time, keep trying. There is no better way to be engaged.

The International Franchise Association has a saying that “franchising is being in business for yourself but not by yourself”. It is true that having company management and franchise peers to help the business succeed is a significant advantage of being a franchisee. But like most advantages in business they have to be leveraged to generate the intended results.

Make it a point to become active and engaged. After all, you’re paying for it.

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