October 2013

How to Manage Multiple Business Locations Successfully

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Adoption of the franchise model has grown rapidly over the last 20 years. Well over 750,000 business locations have opened as a franchise operation. More than 4,500 registered franchises exist across the country, with over eight million people working in a franchise.

While demand for franchises has increased, the tools to manage multiple business locations have unfortunately lagged behind. There is no centralized resource for managing resources, so managers have their work cut out to avoid inefficient management practices.  Here are just a few of the results from our 2 year research study.

Operation Obstacles

1. Managing operations with email. Some managers heavily rely on email as their main communication tool for managing remote locations. Email is good for general dialogue, but it is not an effective solution for managing customer service, sales, repairs, maintenance and other business tasks. Managing all this through email will waste a lot of time searching for the right email threads and topics.

2. Continuous follow-ups. Managers have to often get updates repeatedly from remote locations, to resolve different issues. Keeping track of all the previous communications is a big hassle and slows down the entire process.

3. Finding the right information. The inability to quickly search for and locate information and documents, means efficiency is greatly reduced in an organization.

4. Lack of inspections. With multiple locations, some places are left with little or no direct inspections from the manager. This results in operational failings and quality control issues. An out of touch manager won’t have enough knowledge about the level of service and this will quickly affect sales.

Communication Complications

5. Inability to keep everyone in the loop. Making sure every employee is updated and on the same page is a difficult task. With no efficient system, managers are forced to use a combination of email, phone and fax. Though emails can easily be missed, faxes thrown away and phones call left unanswered.

6. Redundant conversations. A centralized system is required for managing and publishing information. Without this kind of setup, valuable time will be wasted repeating the same common questions and answers.

7. off-topic conversations. Communicating directly to remote locations can become inefficient when too much time is spent talking about non-work issues. Chatting about unrelated topics wastes precious time in an organization.

Employee 

8. Transferring Knowledge. When new managers and staff are hired, efficiency and productivity drops because of difficulties in getting the right information. Inefficient knowledge transfer leads to brain drain in the organization, while everyone tries to catch up. This costs a lot of time and money.

9. Weak team building.

Without supervision staff members, a trusting relationship is not built between managers and staff. Expectations are not clearly set and the whole team suffers as a result. Conference calls can only do so much in getting your point across without lots of follow-up calls. While centralized gatherings are usually too costly.

10. Lack of follow-up training.

The training procedure for new employees is very costly and ineffective in many companies. A corporate trainer has travel to each location at a great cost, and even worse the impact of the training is reduced due to no follow-ups.

These were some of the main issues that crop up when managing multiple locations. All these points serve to show that an online, scaleable and centralized solution is required to minimize lost productivity in a company.

To see the full report, please click here.

Article by Jason Duncan, CEO/Founder of ManagerComplete.com. ManagerComplete is an online software application that helps multi-unit franchises manage operations effectively. Follow him on Twitter for latest updates.

Would You Buy a Franchise for Your Child?

Changes in the economy are very much accountable for the increase in recent parent-child franchise operations that are seen taking place throughout the United States. Although there are no distinct figures to support the increase in franchises that are owned and operated as a team by parents and their adult children, recent evidence suggests that more and more job-seeking parents and children are joining forces to purchase rights and own/operate franchise businesses together; a likely outcome resulting from the poor economy and lack of corporate jobs being offered to new college graduates as well as to existing, previous laid-off adults.

Multi-generational franchises seem to be becoming more popular in the franchise world as parents who have the financial background and maybe even the corporate knowledge to effectively run a franchise are pairing with their adult children who have entrepreneurial courage and confidence. The result: an estimated 20% of franchises that have recently been starting are parent-child pairs that are working together to earn a living.

Franchise consultant, Rick Bisio, claims that “10-20 percent of the franchisees he places start as parent-child pairs and that the number has risen since the economic turmoil.” With many recent college graduates finding it difficult to find a job or get hired, and adults who were once steadily employed experiencing layoffs and job cuts, it seems that workers are turning to new ideas, coming up with new plans and looking to franchising to make ends meet now more than ever before.

These new pairings of parents and their children often result in the division of labor that is ultimately responsible for such smooth franchise operations. In a recent case, a family purchased rights to operate under a franchise name with plans for the parents to operate the major connection aspects of the business including customer service and corporate handling while the adult children took on responsibilities such as marketing (online and offline), technology and similar roles.

While franchising can be lucrative, the business is a long-term investment that will likely take 5-10 years to fully payoff into a rewarding, consistent return. Despite the longevity, or perhaps because of the longevity of the franchise business, parents and their children continue to work together to approach franchise opportunities, grow their careers and build long term wealth despite a struggling or otherwise sluggish economy. Most will agree, that although the work is tough sometimes, it beats not working at all!

Resource:

http://www.nytimes.com/2013/05/09/business/smallbusiness/with-bleak-job-prospects-parents-and-children-buy-into-franchises.html?pagewanted=1&_r=0&ref=franchises&adxnnlx=1383926668-3/JTlhzvJfxOdJv1NONhhw

Article by Jason Duncan, CEO/Founder of ManagerComplete.com. ManagerComplete is an online software application that helps multi-unit franchises manage operations effectively. Follow him on Twitter for latest updates.

What You Need to Know About Franchise Turnover

Franchisors can be pretty bashful when it comes time to talk about turnover. And with good reason, it would seem. Out of every 10 franchises that open in the United States, 9 close. Between 2010 and 2013, a staggering 135,289 new franchise locations opened in the U.S. Yet net growth for that same period was only 16,644. What happened to the other 118,645? Well, according to a report by FranchiseGrade.com, approximately one-third were shut down as a result of franchise agreement violations. However, the remaining two-thirds went out of business. It is an alarming figure. So, should you be concerned? If you are in the franchise industry, here is what you need to know about the franchise turnover rate.

Turnover varies significantly between franchises. It is true that almost 9 out of every 10 franchises that open will close. However, it should be noted that while the number is high, it is being skewed by several outliers. “You’re always going to have a baseline turnover rate,” explained Jeff Lefler, CEO of FranchiseGrade.com. “But habitual problems stand out like a sore thumb for us.” Those sore thumbs are what drive up the industrywide turnover rate. Quiznos, for example, has an outrageously high turnover rate. The sandwich franchise opened up 599 new locations in the last three years, while closing a staggering 2,844 franchises. In other words, the franchise closed nearly five times as many franchises as it opened. That’s a turnover rate of well over 400 percent.

There are franchises with very low turnover rates. As mentioned above, turnover rates vary significantly between franchises. Some franchises have incredibly low turnover rates. Subway, for example, has a turnover rate under 20 percent. Its annual departures, which typically average about 800, make up a mere 1 percent of its total store count. Some franchising systems are just more successful than others. You want to invest in a franchise with a proven track record of success when it comes to supporting franchisees, and that means investing in a franchise with a low turnover rate.

Look for red flags. The bottom line is that before you invest in a franchise, you need to do your research. You can look forward to a long and prosperous career and mitigate the risk of turnover as a franchisee if you choose the right franchise. Pay special attention to three-year turnover rates (anything in the double digits is a red flag) and also check for litigation against the franchisor. Numerous lawsuits are a sign of troubled times. Remember, while you can’t completely cut risk out of the equation, you can substantially reduce it.

 

Sources: 

http://www.entrepreneur.com/article/238653

Article by Jason Duncan, CEO/Founder of ManagerComplete.com. ManagerComplete is an online software application that helps multi-unit franchises manage operations effectively. Follow him on Twitter for latest updates.