It seems to make sense: less benefits, labour laws and an unlimited way to force more duties with less payment (by lying). Seems like a “can’t lose” strategy and one that will further your corporate career, right?
Wrong. Some corporations make a very big strategic mistake:
- they abuse franchisees a lot AND
- then permanently give the “victims” 100% control of the organization’s distribution system.
Not a very bright move.
Franchising is not in itself a bad move. Actually, it’s very, very smart IF managed properly. Most models are managed in a predatory, stupid way.
Short-term Profits: If this is the overriding corporate goal, franchisees are seen as an expense (to me managed to zero) and not an investment. The nasty consequence is that management has then effectively handed total control of your business over to what might become a very unruly mob.
Corporate mangers who make their careers by slashing or nickle-and-diming programs to the most vulnerable parts f their marketing mix (distribution: franchisees) may advance their career in the short term. But they sow the seeds of a huge collapse if franchisees are pushed too far.
Franchisors are responsible for creating and maintaining a sustainable and safe franchise model. All humans have limits. It’s a medical fact and a health and safety issue of a very high priority.
If the model forces people beyond a safe human limit and the franchisor has been warned by a reasonable franchisees:.
- When (not if) someone falls asleep at the wheel of a logoed truck, the public will look to the franchisor for an answer when the baby carriage is hit.
Signs of Dis-stress: If policies force franchisees into burn out (ie. too many hours/not enough sleep, illness, high divorce rates, rapid turnover of newbies, no time to take time off, abusive actions toward informal leaders), franchisors should expect a comparable push back in a manner that may not be to their liking.
Franchisors who have lost capacity to actually perform their continuous, fast-cycle product distribution tasks, would be wise to start listening to the more moderate voices arising from the restless.
- The bad old days of franchising are over because information technology allows anonymous learning.
Higher levels of management skill, training and thought are required by franchisors. Senior managers should view spokespeople with respect because they have the ear of their constituents. Only fools will continue to penalize smart, tough, patient franchisees.
The franchise industry will be littered with the bodies of executives that failed to adapt to the new franchisee-empowered landscape.