6 Tips for Rebounding from Bad Franchisee Validation
6 Tips for Rebounding from Bad Franchisee Validation

Transparency in the franchise due diligence process can help mitigate fallout of franchisee prospects

Access to information is at an all-time high for the franchise prospect. The good, the bad and the ugly of your brand should be expected to be found on the web. In franchise development, bad franchisee validation can eliminate the value of all of your marketing, advertising, digital and franchise PR activities. Five franchise experts provide tips on how you can rebound from less than great validation:

1) Michelle Rowan, President and COO of Franchise Business Review:  If it's a few franchisees -- which is common in systems -- be transparent. Show that you care about what franchisees think, acknowledge where you have weaknesses, and share what your plan is for making improvements. If it's your entire system, STOP SELLING. Fix things with the current franchisees and focus on economics and relationships. Poor validation from the whole system will kill the deal every time, and investment into development is futile.

2) Steve Beagelman, CEO of SMB Franchise Advisors: Get ahead of it. If you have it, set clear expectations before you send a candidate off to speak with franchisees. Educate franchisees of the true value of their word, and provide them with a platform to share negative comments with the franchisor rather than the prospective candidates.

3) Todd Bingham, President of Pinnacle Franchise Development: Bad validation needs to be pre-framed by the development person. “Why there will be bad validation and the steps we (the franchisor) have taken to not only resolve but to prevent in the future” needs to be discussed upfront with the candidate.

4) Craig Slavin, President of Franchise Central: We suggest investing in and using a life coach. Our certified Navigator life coaches work with franchisees to adjust habits and perceptions. If a franchisee is not doing well, the franchisor automatically believes it is because they are not following the system. That is just so wrong. Reinvest in the franchisees before bringing new ones into the system. It is actually cheaper and produces an ROI vs. spending money on training (and retraining) on the system.

5) Kay Ainsley, Managing Director of MSA Worldwide: What to do depends on why there is poor validation. In general, a franchisor needs to address the issues causing the poor validation in order to rebound from them.

6) Keith GersonPresident of FranConnect: Proactively conduct attitude, perception and satisfaction surveys of your franchisees in the same way that you do for consumers. Increase the quality and frequency of your franchise business consultant touches and visitations with franchisees. Ensure that you have an effective Franchise Advisory Council that you are meeting with regularly on the information coming from the field. Initiate a franchise intranet where franchisees can huddle daily and where they can learn about all the good things that are happening in your network, new initiatives and success stories. And pay close attention to a franchisee's unit-level economics.