A Tale of Franchise Trust Building: Lessons from Great Enterprise LeadersBeth Thouin
It was the best of enterprise times, it was the worst of enterprise times for well-known coffee franchise Tim Hortons. From unwelcome in-store renovations to cost-cutting, Tim Hortons franchisees were losing trust in leadership. Things were souring quickly. Eventually, a coalition of franchisees came together to protest the unresponsiveness of Tim Hortons’ president, Alex Macedo, and the advisory board.
The executives at Tim Hortons knew something had to be done. They were quickly learning that a bad relationship with franchisees meant barriers to rolling out new initiatives and technologies.
This idea is reinforced by a panel discussion of marketing leaders from Sub Station II, Chicken Salad Chick and Pizza Inn at last year’s Restaurant Franchising & Innovation Summit. In the reasons brought up for franchisee resistance to technology adoption, they all cited the importance of trust in the buy-in process.
So did Tim Hortons repair the bond with their franchisees in time to avert catastrophe for coffee aficionados all over Canada? We’ll get to all of that very soon. First, let’s “trust-fall” into some of the whys, whats and hows of trust building between franchisor and franchisee.
Understanding What Builds Trust in Business Behaviour
Each of the 759,236 franchise establishments in the U.S. (give or take a few), has a unique challenge when trying to earn or rebuild trust with existing or potential franchisees. Yet they all have one thing in common, which is the fact that they’re operated by people who follow certain principles of human psychology.
The Mediterranean Journal of Social Sciences studied reasons why entrepreneurs choose the franchise business. Unsurprisingly, entrepreneurs were most influenced by the established benefits of franchising, in their choice to adopt a franchise in the first place. This makes complete sense given the brand authority and security that enterprises offer franchisees and the resources that go with this model, from training to marketing. Applying basic principles of human psychology go a long way when doing business with people.
Tales of Enterprise and Technology
David Acker from Pizza Inn emphasized the idea that franchisors have to position any new technology in a way that makes sense to franchisees, and this can take time. Mike Monson of Sub Station II added that even when franchisors are successful at making a logical case for technology adoption, the implementation may not go according to plan. If the claims about technology made by the enterprise are not met in reality, trust in the recommendations of the franchisor will erode. Franchise owners can ease technology adoption and earn that trust with franchisees using helpful content, training and resources, while demonstrating expertise.
Considering that a franchisee with one location has different technology needs than one with six locations, franchisors can earn trust by demonstrating an understanding of the unique needs of each. Hughes Director of Enterprise Tim Tang says that rolling out technology incrementally can help reduce friction and keep trust abound as well. Focusing on local technology adoption will help drive overall brand success.
Enterprises can facilitate local adoption by creating a franchisee training program. Cornerstone on Demand reported how such programs were wildly successful, from increased sales to better achieving corporate objectives.
Establish Trust With Leadership and Credibility
The Restaurant Franchising & Innovation Summit panel’s overarching message was the need for strong relationships between the franchisor and franchisee. Acker provided context saying that when Pizza Inn’s CEO sits down with him to explain what they’ve decided to do and why, that this dialogue creates a sense of transparency in the chain (pun intended!). In turn, trust is built through open and honest dialogue and mutual-respect. All of the participating franchises agreed that if trust is established and maintained, any changes to the organization are easier.
Aside from creating a franchise culture that supports trust, franchisors can do a few things with their brand to encourage belief in their leadership. The Franchise Institute provides a few tips for earning trust with franchisees through value and credibility, including:
- Focusing on how they can make money by opening a franchise with your enterprise - that’s why they’re getting into business in the first place!
- Generating good referrals between potential franchise owners by facilitating a discussion and being a credible operation that they want to say good things about
- Protecting your brand image and expanding it in every way so people want to associate with it
- Offer ongoing training and support to franchisees, not just in the first phase of business
- Setting up franchises in both A and B-grade locations to signal viability in different regions to future franchisees
Behaving in a way that fosters honesty, such as having a transparent discussion, will definitely help build trust with franchisees. Backing that up with brand values, presence and resources will seal the deal for future franchisees.
Building Trust Through Marketing
Peer-reviewed research and franchise empire examples aside, you can use marketing to earn the trust of future franchisees. Thing is, marketing comes in many forms, so we built a glorified checklist to help you stay focused.
✓ Network within the franchise community
Building a positive presence in the franchise community is the first step to generating trust and credibility with prospects. Join franchise organizations and maintain an active presence in these groups. Take part in online franchise communities or franchise groups on social media. Ultimately you should aim to become an authority in your industry by any means available to you. Here are some examples of how you can exercise brand authority at the franchisor level:
- Create thoughtful and well-researched blog content, white-papers or proprietary research that franchisees can learn from
- Participate in industry roundtables or panel discussions
- Seek out speaking engagements at industry events and conferences
- Offer to write a guest blog post or be a regular contributor for industry websites or publications
- Make your team members available as resources for the media to interview
Fiona Simpson, for example, is the owner of children’s franchise ARTventures and she takes time to guest blog on Forbes:
✓ Manage your online reputation
Reviews aren’t just for restaurants anymore—they’re also for franchises. Put systems in place to monitor mentions of your brand on social media, in the media and in online reviews and rankings (such as Top 100 lists of franchises). When you see a problem that could affect your franchise company’s reputation, take immediate action to resolve it.
Developing a strong presence in multiple marketing and advertising platforms will help you to control your online reputation. It will also simultaneously boost your business’s image, building trust among prospective franchisees. Your franchise organization can use always lean on traditional and online advertising and PR to raise the company’s profile.
✓ Create a credible website
To make the most of your website and look respectable to future franchisees, first make your website easy to find in search results. Then make it easy to navigate through. Provide emblems of authority like badges, licenses, trust symbols, awards, BBB ratings, certifications, and/or memberships with industry associations such as the International Franchise Association. Here’s an example of how one franchisor uses authority emblems:
Aside from making your website a pleasant experience and showing some credibility, you should make it interesting. Tell the history of your company through an interactive timeline, video or slideshow. Include franchisee testimonials, videos of what a typical franchisee does on an average day, behind-the-scenes at franchisee training or demonstrations of the service your franchise provides.
Potential franchisees want to get a clear idea of what is really involved in purchasing and running your franchise day-to-day. They also want to know how becoming a franchisee will benefit them financially, professionally and personally. So share this information upfront on your website! You could share real-life stories of your satisfied franchisees for example. Storytelling engages prospects and helps potential franchisees decide if your opportunity is a good fit for them, while simultaneously building trust.
✓ Be honest about your shortcomings
Franchise prospects expect transparency from the companies they do business with — your franchise opportunity most of all (After all, this is a big investment.) Don't sugarcoat the reality of being a franchisee. Your marketing should honestly answer typical questions like:
- How did other franchisees find success with your business?
- What experience and skills do franchisees need to succeed?
- What kind of training and support do you provide?
- What are some of the challenges they’ll face along their road to success?
Answer these questions in your FAQs or provide additional content that speaks to these issues. For instance, a fast-food franchisor could share a video showing how a franchise location handles a crazy lunch-hour rush. By sharing both the good and bad aspects of operating one of your franchises, you'll earn the trust of potential franchisees. Regularly review the marketing materials that potential franchisees receive to make sure the information is accurate and up-to-date.
✓ Build trust with existing franchisees
The way you treat your existing franchisees is key to building trust among future franchisees. Prospects want to see that franchisees and the corporate office have a strong, supportive relationship. Nurture the relationship with marketing.
- Invest in marketing programs for your franchisees
- Use social media to engage with franchisees
- Give them references and ask them for feedback
- Maintain consistent branding across franchise locations
Baptist Integrated Physician Partners created an entire directory page to support their multi-location franchise network:
The way that each enterprise goes about building trust by supporting existing franchisees with their marketing is entirely unique. When applied however, these high-level concepts can establish a culture of trust and the future of an enterprise.
Tying it all back to “Timmies”
It was the age of franchisee satisfaction, it was the age of franchisor satisfaction. From basic human psychology to great leadership, credibility and marketing support, trust building at the enterprise level takes a bit of tact. Learning from the tale of Tim Hortons’ franchisee discontent, trust can quickly be lost, even for the most successful enterprises.
Tim Hortons did eventually find a way to rebuild trust with their franchisees. In their solutions you will see the hallmarks of the tips discussed above. To improve sales, location performance and ease tension, President Alex Macedo launched the all-day breakfast campaign. In an effort to regain trust from Tim Horton’s 4600+ franchisees, Macedo toured individual franchise locations across Canada, making a show of transparency and honesty. Macedo also invested in marketing programs to support franchisees like customer loyalty programs, kids menus, new packaging and more. Since all-day breakfast was announced by Tim Horton’s last year, individual locations remarked that this initiative has enhanced sales and helped to combat the tension between management and franchisees. All’s well that ends well for those caffeinated Canucks.
Of course, offering all-day breakfast in such a competitive market may not be a relatable situation for other enterprise companies. When trying to build trust with franchise locations- enterprise businesses can look very different from one another. But there are still lessons to be drawn from the Tim Horton’s story.
Buying a franchise is a huge investment, and running a franchise is a way of life. For some people, it’s the fulfillment of a lifelong dream. With so much riding on their decision, prospective franchisees need to trust your organization to help them achieve those dreams. Then and only then will they feel comfortable taking the leap into franchise ownership.
The number-one way to earn the trust of prospects is to provide an outstanding franchisee experience. Listen to your franchisees, communicate with them openly, and treat them as real partners in the organization. When your franchisees are satisfied with your opportunity, you can be confident that prospects will hear nothing but good things about buying one of your franchises.
All screenshots by author. Taken February 2019.
Image 1: Screenshot via Cornerstone on Demand
Image 2: Screenshot via Forbes
Image 3: Screenshot via Franchise Gator
Image 4: Screenshot via Ben’s Soft Pretzel
Image 5: Screenshot via Baptist Integrated Physician Partners
Image 6: Screenshot of photo by Doug Ives for The Canadian Press via The Star