What does “onboarding” franchisees really mean?

What does “onboarding” franchisees really mean?

Franchisors have begun to adopt the term “onboarding” to describe the process of gaining support and engagement for system changes among existing franchisees.

Unfortunately, this management buzzword sounds suspiciously more like an interrogation technique practised at Guantanamo Bay than a genuine meeting of franchisor and franchisee minds to build a better business together.

Every successful relationship involves give and take by both parties.

Franchisor leadership is a complex and dynamic thing that requires both the capacity to make sometimes quick decisions for the good of the many, and yet still require consultation with key stakeholders (i.e. franchisees) to fully understand the potential impact of key decisions.

The idea that existing franchisees can be “onboarded” to any and all franchisor decisions is insulting to franchisees. (Onboarding has also been used to describe the process of inducting new franchisees, and this will be addressed in separate article later.)

The process of gaining franchisee engagement and support for franchisor-driven initiatives must first pass the franchisee WIFM test (What’s in it for me?), and the consequences test (What happens if I don’t do this?).

The WIFM test will always be the strongest motivator for franchisees. Self-interest governs human behaviour, so any “onboarding” program must first and foremost consider franchisee self-interest.

Unfortunately, not all franchisors are good at establishing franchisee WIFM’s, and even highly experienced franchisors occasionally get it wrong.

When franchisors miss the mark with franchisee WIFMs, the result is usually a pretty resounding WTF!? from their franchisees.

So the process of gaining franchisee support for an initiative requires them to see the benefits first, and to willingly move in the new direction.

Franchisors can improve their chances of getting franchisees to take up such initiatives once these have been proven in company-owned outlets, and also taken up by a respected reference group of franchisee volunteers.

Franchisors must also recognise that the benefits of a new initiative need to outweigh any real or perceived costs to the franchisee of its execution.

A classic example is the introduction of a new IT system. Many start-up franchisors –especially service franchisors – have poor IT infrastructure to monitor sales and customer activity.

Instead of developing this core infrastructure before franchising, some commence with inefficient and labour-intensive paper-based reporting systems that are cumbersome to administer and produce little meaningful data.

Then when the franchisor is ready to introduce a proper IT system, the franchisees are offside from the outset because they have already been conditioned by a bad reporting system to ignore the value of data. They also often find that their original royalty is insufficient to cover the cost of the new system, and therefore are required to pay an additional fee for something they didn’t want in the first place.

An onboarding program might eventually get people using the system begrudgingly, but if the system had existed from the outset, franchisees would not have known any different and adopted it in their initial induction training.

So the message here is that the easiest way to “onboard” franchisees is to build an excellent system at the outset, and as much as possible introduce minor rather than major changes during their franchise journey.

Where changes are unforeseeable and unavoidable, such as in response to competitive threats, then the consequences test applies.

If the change or initiative is NOT adopted, would the consequences for a franchisee’s business be catastrophic?

If the answer is yes (and there is clear evidence to support this argument), then the franchisee WIFM in such a scenario is based on the survival instinct and akin to yelling “Fire!” in order to evacuate a burning building.

Unfortunately, many franchise “onboarding” programs don’t work. Business texts indicate that up to 80% of all change management programs fail for similar reasons to those outlined above.

Using the latest management buzzword to describe a change management process won’t change the outcome unless the franchise system is built properly to start with, and its franchisees are respected enough to be involved in the framing of both the problem and the solution.

Jason Gehrke is the director of the Franchise Advisory Centre and has been involved in franchising for 20 years at franchisee, franchisor and advisor level.

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