Forum Strategy is proud to be working with the British Franchise Association to inform our members’ learning around sustainable growth and improvement. At our most recent East Midlands network meeting, we were delighted to welcome Simon Bartholomew, who was recently chair of the BFA and a member of the Steering Group of the World Franchise Council. Simon is also Franchise Director for Oscars Pet Foods. Here we talk to Simon about some of the links and learning that MATs can draw from the world of franchising.
Why should the academy trust sector consider lessons from the world of franchising?
There is a lot to learn because franchising, as a concept, is very successful and underpins some of the world’s most impressive and customer-focused organisations. 95% of franchisees are running sustainable organisations after five years, yet if we look at standalone organisations, two-thirds of these businesses are failing after two years. Ensuring we learn the lessons from successful collaborative models, including franchising, is clearly essential.
What is the purpose of a great franchise?
The purpose of a great franchise is always to enable people to do a great job. Whether you are a franchisor providing the frameworks and support for your franchisee to ensure their small business thrives, or an academy trust doing the same to ensure headteachers and their schools succeed, it is fundamentally about creating the conditions, systems, and guidance that enables others to do well. How we do that may differ in some respects – industry and education are different in many ways, but there are undoubtedly many principles and lessons that we can share. If you get your model rights, it has the potential to work very very well.
How do you enable your franchisees to succeed?
There are a number of ways in which we enable people to run their organisations. Key to this is the training and development we offer, because we have a deep understanding around the essential skills and competencies necessary to run one of our franchises successfully. We have to equip people as best we can with the professional development, guidance and documentation, and advice they need to do the job well. That’s where we truly add value.
It’s also about providing people with the systems and processes that enable them to focus on where they can have greatest impact (for us, that’s enabling them to focus on sales and customer relations on the ground; for you, it’s ensuring great teaching and learning). There’s no point re-inventing the wheel or leaving things to chance when we can provide our franchisees with the systems that allow them to get on with the job and do so in a compliant and efficient way. People ultimately want to do what motivates them and do it well, not worrying constantly about putting in place and managing the administrative systems and processes.
Whilst a franchisor will always be focused on looking after their systems and their brand, we must not lose sight of the fact that we have a big obligation to look after our franchisees. It’s important that academy trusts look after their heads and senior leaders in schools, to ensure they are well supported and that the challenge is without fear. If we invest and care for those providing leadership on the frontline, that will do wonders for the culture and the long-term success of the organisation.
It’s important that academy trusts look after their heads and senior leaders in schools, to ensure they are well supported and that the challenge is without fear.
How would you describe a successful relationship between a franchisor and a franchisee?
As a franchisor, it is expected that you come into the relationship with a significant amount of capacity, experience and expertise – as well as with effective systems and processes. A good franchisee will recognise the value of that expertise from the outset and embrace it. It’s a big asset as a franchisor that you’ve ‘been there and done it’ and have made many of the mistakes you wish to help your franchisee avoid making! Of course, franchisees are often very motivated people who are keen to lead and shape their organisations, so we’ve got to demonstrate to them that our systems work and that there’s a reason for them to follow those systems as they must. A franchisor will provide the confidence and support that a franchisee needs to lead an effective organisation, and, in turn, a franchisee will respect the franchisor’s experience and understand that the systems and processes are the way they are for good reason. Where this doesn’t exist, the relationship is likely to break down.
WHAT IS A FRANCHISE?
The granting of a licence by one person (the franchisor) to another (the franchisee) entitling the franchisee to use the proven methods, trade marks and brand of the franchisor in exchange for an initial fee and a percentage of the gross monthly sales.
Franchisees generally make use of the franchisors entire package such as training, development, national advertising campaigns and ongoing support enabling a previously untrained person to establish, run and develop the business with continual assistance and support.
What are some of the key benefits of being part of franchise?
There are many. First and foremost you have access to what are proven systems and approaches that will allow you to deliver from day to day. You also have access to certain economies of scale through shared buying power and access to some central resources offered by the franchisor. This notion is particularly important for schools working within trusts at the moment as the opportunities to mitigate the expenses incurred at a local level should be plentiful.
As a franchisee you are part of a wider community of professionals and leaders running similar organisations. When things are at risk of going wrong, we can connect those who are struggling or in need of support with another franchisee who may well be able to help. The success of the overall franchise however, also depends on how we learn from and share the practices taking place amongst our highest performing franchisees. Franchisors that do this really well flourish, but it all depends on how well you know and understand the strengths and weaknesses across the group. Similarly, we know that one of the most important factors in being a successful academy trust is how well the central trust knows and understands the strengths and weaknesses of its individual school and then – of course – how it uses that information to draw on the support of the wider group.
Access to the expertise and knowledge of the franchisor is a key factor. Access to research and development, marketing support, provision of consultancy support are just some of the ways in which many franchisors support their franchisees.
What are some of the disadvantages of being part of a franchise?
The cost – at least initially – is an obvious one. The average fee taken by a franchisor is 8.4% of the franchisee’s annual turnover. Of course, this should be considered with an investor rather than a bean counter mindset, and franchisees should be clear about what they are getting (and saving) in return. Much of the support that franchisors tend to provide includes product and service development, quality control, management consultancy, financial management, and many other things that can add enormous value to an organisation. Franchisors are often able to recruit people with extensive operational and specialist experience that individual franchisees would otherwise not have access to.
There’s also, potentially, a perceived view amongst franchisees that they lack autonomy in some areas. However, a good franchise in my view allows people to focus their efforts on where they can have most impact. From what I can see, the best academy trusts enable their leaders and teachers to focus on forging the very best educational experiences for pupils, without having to spend time and energy thinking about areas that fall outside their professional experience. The same applies to our franchisees, many of whom want to focus on building good customer relationships and delivering the product on time and to a high standard. In many ways, a good franchise provides more freedom, not less.
From what I can see, the best academy trusts enable their leaders and teachers to focus on forging the very best educational experiences for pupils, without having to spend time and energy thinking about areas that fall outside their professional experience.
I think franchisors need to recognise when they involve franchisees in innovation and shaping the wider business. We don’t want people who comply and do well. We want people who do well and then help to inform and develop the wider systems, processes and training so that the whole network benefits. I want our best franchisees to be committed to the success of the wider franchise, not simply their own part of the business. As a franchise we are only going to be as strong as our weakest franchisee and I’m sure this is the case with academy trusts who need their top performers to support the wider group. I spend a lot of time making sure that culture exists across our franchise.
What tips have you got for those looking to join a trust or franchise?
Asking the right questions is crucial. I would advise someone looking to join a trust or a franchise to visit the head office, to meet the central team, and to spend time asking lots of questions. Some essential ones are:
- How do you maintain common standards?
- But how do you do that without stifling individual initiative?
- How do you draw the balance?
It’s also important to get a good sense of the kind of on-going support do you get, including what provision is available and whether there is access to good training, systems and manuals. It’s also important to speak to others franchisees and to ask them about their experiences including whether the franchisor keeping their end of the bargain.
As a school joining a trust, I think it’s important to ask all of these things, as well as having a clear understanding of the direction of the trust, the things it prioritises, whether there is a culture of collective support across the group, and the value added in terms of the quality of the central services on offer.