Improving performance using franchisee growth groups: who are the smartest people in the room?

There are times in the evolution and growth of a franchise network in which the franchise system needs to come to terms with the fact that it cannot remain the holder of the title of "Smartest People in the Room."

This principal has been demonstrated many times over the years by some of the most highly-regarded organizations. A McDonald's franchisee is credited with the introduction of the Egg McMuffin and the introduction of a lucrative breakfast program. A Winchell's Donuts franchisee is credited with the introduction of the mass-marketed apple fritter, and on the story goes.

The principle of recruiting franchisees who are capable of helping a franchisor to evolve its system, the idea that recruiting "intrepreneurs" and involving them in the strategic development of the organization is particularly evident in a franchise system where the culture and practices of the home office most certainly comes back, one way or another, in the form of unit economics. The equation has been demonstrated time and again: collaborative franchisors equal engaged franchisees, while unresponsive, self-absorbed franchisors equal dissatisfied franchisees.

This idea is not groundbreaking, by any means. What is new, however, is the emergence of franchisee growth groups, which takes support to the franchisee-peer level and ultimately translates into improved system-wide performance. If, for no other reason, in this time of economic woes for many franchise systems, it would behoove franchisors to look seriously at encouraging and implementing these types of groups as one vehicle by which franchisees can work together for the greater good of the entire system.

The charter of franchisee growth groups, which are made of like-minded franchisees within a single franchise system, includes helping to change the franchisee network for the better, from within. The idea is relatively simple and involves applying the trusted TEAM acronym: together everyone accomplishes more.

The idea behind these groups is similar to a process the International Franchise Association implemented in the past with its "Second Tuesday" (now Franchise Business Network) meetings. At these meetings, a host would volunteer, and IFA would create a focus or topic of discussion for that given meeting, complete with slides and a leader's guide. Similarly, with franchisee growth groups, a moderator initially develops the content for the franchisees in the group. Eventually, this is no longer necessary as the groups take on positive lives of their own.

How does a franchisor create such groups in their system?

There are several ways to organize franchisee groups. A franchisor may want to group franchisees regionally. In this way, a regional support consultant can serve as a facilitator and work with franchisees to talk about issues of common interest and common need. Another way to group is by financial range. For example, at PuroClean, the top 16 producers are grouped in the "President's Circle," where they provide feedback to one another, as well as work with a professional business coach. The group meshes well, as members face similar challenges and share a mindset that helps contribute to a successful group dynamic.

Franchisee growth groups should follow a structure that includes a financial review and sharing of numbers with one another. Because group members are interested in rapid growth and financial rewards, numbers-sharing creates a sense of accountability that helps franchisees stay focused on the achievement of their goals. This also creates accountability among the peers that they would otherwise not experience on their own when not achieving their commitments and potential.

It's never a question of franchisees not knowing the right thing to do, it's about their priorities and the choices they make. As part of a system, the growth group helps them overcome these issues and develops a sense of accountability as they are forced to "own up" to their failure to execute in front of their peers. This is the essence of the growth group concept: collectively working together, building trust and holding each other accountable.

It's generally best for groups to follow a business plan to meet five key objectives as outlined by Patrick Lencioni, president of The Table Group, who addresses leadership and organization life in books and articles. These key objectives include:

* Vision,

* Values to preserve the company's core,

* Operational outcomes or results,

* Operations initiatives to position short-term and long-term goals, and

* Highly-effective behaviors determine what behaviors to continue and transform limiting behaviors

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Seven years ago, a group of like-minded franchisees from within our franchise system formed a growth group to provide guidance for one another, accelerating both business and personal growth. The group consists of eight franchise owners of all different volumes from locations across the county. Members can be asked to leave the group if they don't achieve set goals or a sense of accountability. They are completely honest with each other, and take turns hosting and facilitating the meeting on a quarterly or semi-annual basis. They also tour each other's facilities, and have unlimited access to employees and files. After the tour, they meet and exchange constructive findings.

PuroClean franchisee Todd Pulley started the group when he recognized the potential benefits of being part of a system where franchise owners can learn from each other, as well as teach one another. For each meeting, the group focuses on a certain subject or idea exchange that will help better themselves as well as their companies. For example, the growth group is currently focused on leadership abilities and financial management systems. Pulley says the benefits of tapping into the knowledge pool of his peers are immeasurable.

Pulley's colleague and fellow group member, Tom Light, agrees that the groups are an effective way to help each other grow both on a professional level, as well as a business level. He enjoys working with like-minded peers, and emphasizes the need for compatible groups, so that everyone involved is poised for reaching similar goals.

Participants check their egos at the door, and all attendees lay out their financial statements in Quick Book formats to share exactly what their performance was, compared to their budgeted projections. Everyone is open to feedback, which is always direct and to the point. The agenda allows for group topics of interest and time spent on defining what it means to provide service that is truly "differentiated in the marketplace."

After the meeting, the group defines what its wants to accomplish at the next meeting. At a recent meeting, one participant expressed how he wouldn't be where he is today if it weren't for others in the group that "adopted him." The group vows that as long as they work with like-minded people with passion and a common goal to grow and improve, they would always be willing to mentor others.

Growth Group Dynamics

Ideally, growth groups should consist of six to eight peers. Initially, the group participants need to agree upon the reason for the group's existence and to set up a structure and agenda. It's also a good idea for them to talk with fellow franchisees who have participated in a growth group to provide insight on how to best help this type of group succeed, and tips to get groups on the right road. Ultimately, as demonstrated by the growth group referenced earlier in this article, this group works because it is self-managed by franchisees who commit to trust, healthy conflict and resolution and action-oriented plans that focus on results.

While it's tempting for franchisors to know what takes place during these sessions, it's best for them to stay out of the franchisee group meetings. The groups seem to gain momentum and work better when they don't have input that might be considered as a "Big Brother" situation in overseeing the group. Even though group meetings are a challenge because they require a commitment of personal time on the part of the franchise owner, not one of this system's franchisees has complained. Quite the opposite, they consistently communicate the benefits they reap from their involvement.

Franchisors should call upon their franchisees to offer their time and knowledge, along with their commitment to continuous improvement, by forming growth groups within their systems. They can help the process along by setting up the structure and the agenda and providing referrals to others that are willing to share how to make this type of group succeed. Franchisors can also help with the development of some thought starters to get the groups off to the right start. Ultimately, the entire system, including the franchisor, will reap the benefits of the powerful growth group dynamic.

Franchisee growth groups are the embodiment of what it means to be a network and a family, as one of the most important principals they espouse is giving back to others. Members believe that what they give to others eventually comes back to help them and the entire system. The bottom line is that franchisees will contribute to network success and, in turn, to the success of its franchise parent company, and that it's great to know that one doesn't always have to be the guy with all of the answers.

Keith Gerson, CFE, is president and chief operating officer of PuroSystems, Inc., the parent company of PuroClean. He can be reached at kgerson@purosystems.com.