20 Jun Why is Change Such a Challenge for Franchisees?
Most franchisors complain about the fact that they find it extremely challenging to get their franchisees to accept change. There are times when a franchise network decides to incorporate some level of change in their workings.
It could be some small procedural changes that will help enhance customer satisfaction or improve productivity and time-efficiency.
However, there are times when the changes may be much larger – such as the introduction of a new IT system or a complete branding overhaul. It goes without saying that change is essential if a business wants to survive in the competitive landscape that exists today; and franchises face similar pressures. However, introducing changes into a franchise network is probably one of the most difficult things franchisors have to deal with.
In most cases, the objective is to maintain complete uniformity in the franchisee operations. Surprisingly, these changes often result in a very high level of operation diversity between the franchises. It’s also more common to see non-franchised chains adopting changes and evolving at a more rapid pace than some well-established franchise networks. So, what makes change such a difficult prospect for franchisors? Here are some things to take into consideration:
#1 The nature of the change
There are instances when the change itself is the problem and franchisees may be reluctant to embrace the type of change the franchisor expects of them. If they perceive the change to be too radical or that it deviates from the manner in which things are being done currently, the entire network may not be able or willing to make the necessary changes. If the franchisees don’t see a tangible link between the older processes and the proposed ones, they won’t be convinced that a change is necessary in the first place, and will be more apt to protest.
#2 Comfort levels
Once a franchisee moves out of its gestation period and stabilises to a point where the business is fairly successful, that becomes their comfort zone. The resultant inertia will make them less inclined to embrace changes. They will just look at that change as more of an inconvenience, rather than a necessary aspect of long-term survival.
#3 Low expectation levels
Many franchisees resist change because they don’t recognise that if they don’t change, they will eventually fall behind in the race. Some and just first-time franchisees don’t have very high expectations or goals. They look upon the franchise as more of a big ticket acquisition such as purchasing a house or car; and are content with the fact that they are actually running a business that’s fairly successful.
#4 The cost factor
There are some franchisees that recognise the need for change. However, these people may also shy from implementing it because they perceive the cost outweighs the benefits. If the changes that the franchisor is demanding involve significant investment, such as refurbishments and rebranding, many franchises will feel that the cost is disproportionate to the benefits. This is especially the case if there is no guarantee that their business will perform much better once all the changes have been implemented.
The only way a franchisor can get a buy-in from their franchisees (with reference to making changes), would be if they are able to prove to the latter that these changes will provide them tangible benefits in the near future.
If you want to know more about setting up franchise business or want some advice, feel free to get in touch with us at The Franchise Institute. You can call us on 1300 855 435 or fill in this contact us form and we’ll reply as soon as we can.
Thanks for reading,
The Franchise Institute Team
1300 855 435