greg nathan - fri

7/25/2019 Greg Nathan - FRI

1/340 BUSINESSFRANCHISOR

GREG NATHAN

THE SIX STAGES OF THE

EMOTIONAL JOURNEY

Around 20 years ago I developed a model that

maps a franchisees emotional journey, called TheFranchise E-Factor, which predicts a franchisees

relationship with their franchisor will move

through several stages.

Firstly the franchisee is in a state of Glee but

becomes increasingly disillusioned with their

franchisor as they gain more confidence in their

ability to run the business. After Glee the

relationship moves to the Fee stage where the

franchisee questions the value they are get ting

for their ongoing franchise fees.

Satisfaction continues to decline as they reach

the self-centred Me stage, where they attribute

any positive results to themselves, but negative

results to the franchisor.

The model predicts satisfaction will continue to

fall and bottom at what is known as the Free

stage. This is where the franchisee is most likely

to try and shake free of the rest rictions they feel

from the franchisor or the franchise system. The

relationship is also most likely to be characterised

by overt conflict at this stage.

If a franchisor sets up a conversation of genuine

two-way listening and respect, there will be a

breakthrough in the relationship, which is called

the See stage, where both parties are able

to listen to each other and see each others

perspectives.

Finally, if the franchisor demonstrates empathy

and assertiveness to properly address the

franchisees legitimate needs, (while not giving

into unrealistic demands), satisfaction returns

to a realistic level of equilibrium, somewhere in-

between the Glee and Free stages.

PUTTING THE FRANCHISE

E-FACTOR TO THE TEST

Last year we conducted a large scientific studyinto the predictors of f ranchisee success and

satisfaction called theFranchisee Success

Study. It involved over 2,000 franchisees from

four countries who completed a 210 item

questionnaire on their backgrounds, work

patterns, attitudes to life and business, as well as

their satisfaction with being a franchisee.

One finding from the study is that the average

tenure of a franchisee in Australia and New

Zealand today is quite long at 7.1 years,

with many franchisees still in their franchise

relationship after 15 years.

PREPARING YOUR

FRANCHISEESFOR THE JOURNEY AHEAD

YearsTenure

10 15

20

5

OverallSatisfaction

As part of this study we decided to put The

Franchise E-Factormodel to the test by tracking

how satisfaction changes with tenure. In theory,

franchisees in the early stages of the relationship

should be more satisfied, but satisfaction levels

should drop as tenure increases. If the model is

correct, at some point, satisfaction will bottom

out and then again increase.

Using a statistical technique called a locally

weighted polynomial regression we were able

to create a best fit curve for how satisfaction

changes over time. The chart below shows the

curve that emerged from the data.

Franchisee satisfaction mapped against

tenure based on data from Franchisee

Success Study.


2/3BUSINESSFRANCHISOR 41

what they dont know) to a state of conscious

incompetence (they begin to realise there is much

they do not know). This can be a particularly

stressful period with franchisees sweating it out,

which is why we call it thePerspiration Stage!

The main role of the franchisor at this stage is to

provide practical support, encouragement and to

revisit the basics of running the business as now

the theory they learned earlier will make more

sense.

STAGE 4: CONSOLIDATION

As the franchisee moves from a state of

conscious incompetence to conscious

competence they enter the Consolidation Stage.

There will probably be a base of customers who

are returning regularly or recommending the

business to others. This means the business has

a steady cash flow and, providing the customer

experience is being delivered as it should, sales

will continue to grow.

The franchisee is now able to take their hands

off the controls and step back to review their

progress and reset their goals. At this point the

franchisors focus should be around reviewing

their plans with them and helping them to

improve productivity and systems. Getting them

into good business habits, such as measuring

their key performance indicators, will also help

them to maximise their success at this stage.

STAGE 5: MATURATION

The word maturation implies that something is

fully developed to its capacity and is ready for the

next step. TheMaturation Stagedescribes both

the maturity of the business and the franchisee.

We are now likely to be five to seven years down

the track.

The mature franchisee will probably have been

toughened by the ups and downs of running the

business, worked with several field consultants

(some more competent than others), heard

numerous franchisor executives proudly roll out a

raft of new initiatives (some more effective than

others) and seen a number of fellow franchisees

come and go. While they may not be cynical,

they are likely to be sceptical of new ideas,

preferring to hear the evidence of their worth

before making any commitment to invest time or

money on these.

While it was exciting to see The Franchise

E-Factorvalidated, the tenure issue raised f resh

questions around the experience of a f ranchisee

over time as they move from being a naive rookie

into a seasoned operator.

THE SIX STAGES OF THE

BUSINESS JOURNEY

I am now going to share a new model that has

emerged from this latest research, which we

call The Franchisee Journey. Rather than map

a franchisees satisfaction with their franchisor,

as The Franchise E-Factordoes, this new model

maps the six stages franchisees move through in

their business journey, as shown below.

against this checklist. In theFranchisee Success

Studywe were able to identif y a number of

attributes that make a huge dif ference to a

franchisees later success, such as positive

outlook, business acumen and pro-activity.

STAGE 2: INITIATION

Once the franchisee has signed the franchise

agreement and is about to start their training,

they are likely to be enthusiastic and listen

politely to what you have to say. The bad news

is they are going to forget 80 per cent or more of

what they hear. What they will retain is the way

they were treated and the experiences they have

during their training and induction.

STAGE 1: INVESTIGATION

Irrespective of the type of f ranchise they join, all

franchisees start their business journey trawling

the internet, reading the var ious franchising

publications and seeking out people able to point

them in the right direction. At thisInvestigation

Stageof the journey the prospective franchisee

is asking Could this be the right type of business

for me? while the franchisor is asking Is this a

person we should continue to talk to?

What many franchisors fail to recognise is the

franchisee induction process has already started.

Should this person become a franchisee, the

expectations that are being set up in their mind at

this stage will stay with them for the rest of their

journey which, as I mentioned above, is likely to

be well past seven years.

It is critical that the franchisor has a checklist

of attributes they are selecting against and a

method for assessing prospective f ranchisees

This stage is calledInitiationbecause it is mainly

about initiating the franchisee into your culture

and your brand, rather than just training them

in your business systems. In theFranchisee

Success Studythe attribute o f brand passion

was the single biggest predictor of franchisee

performance and satisfaction. So if nothing else,

make sure they absorb lots o f brand passion at

this stage!

STAGE 3: PERSPIRATION

While getting the franchisee into their business

may be mission accomplished for the training

department, the journey now takes on a whole

new level of significance for the franchisee.

They are going to be facing the challenges of

difficult customers, unreliable staff, long hours

and unpredictable cash flow. This is where the

proverbial rubber hits the road.

The franchisee is also now moving from a state

of unconscious incompetence (they dont know

The six stages of the Franchisee Journey


3/342 BUSINESSFRANCHISOR

While this can be a time for the franchisee to

enjoy their hard work gol f, fishing, holidays and

purchasing the things that represent success for

them - they can also become complacent. This

is a dangerous time, especially if the business is

successful, because nothing in life is forever, and

maturity is always followed by a levelling out of

performance and then decline.

The franchisee now needs to start planning for

some type of reinvention, before the decline sets

in. The role of the franchisor at this stage is to

inspire, and if necessary provoke and challenge

the franchisee to work out a reinvention or

succession plan.

STAGE 6: REFORMATION

One definition of reformation is An intended

improvement in the existing form or condition

of an institution or practices, to make a striking

change for the better.

A franchisee in theReformation Stagehas taken

a decision to make a str iking change for the

better. This may be to reorganise or restructure

their business or take on additional units. The

energy needed to initiate change should not

be underestimated. There are also likely to be

many unknowns, and with the unknown comes a

certain level of risk.

Franchisees who take the decision to go through

a reformation should be supported appropriately.

This does not necessarily mean financial support.

Assistance with planning and mentoring can be

more valuable. For instance providing access to

people who have been through a similar process

would be useful. A thorough diagnostic can also

be invaluable, especially if they are moving into

multi-unit operations.

In many ways the reformation stage will take

the franchisee back through the process of

investigating what the future business will look

like and perspiration as they come to terms with

how the restructured business will function. And

GREG NATHAN

so theFranchisee Journeyrepeats itself, but at

a higher level. In this sense it is like a spiral of

continuous improvement.

The point for f ranchisors to consider when

reviewing thisFranchisee Journeyis that

franchisees at different stages will have different

learning needs. The type of support they need

and the nature of the leadership they will respond

to will also be different at different stages.

Perhaps in future articles we will explore this

further.

While franchising is a journey with inevitable ups

and downs for franchisees, it is also an exciting

and challenging journey for franchisors whereyour capabilities will be tested. Good data is

invaluable along the way and with this in mind

we have made the full findings of theFranchisee

Success Studyavailable as a report that can be

purchased from www.franchiserelationships.

com .

We wish you well on your journey.

Greg Nathan is a psychologist and Founder

of the Franchise Relationships Institute (FRI),

leading global providers of learning programs

for franchisors and franchisees.

Phone: 07 3510 9000

Email: [email protected]

Web: www.franchiserelationships.com

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