How Franchise Development Addresses Employee Turnover

How Franchise Development Addresses Employee Turnover

It doesn’t matter what business you are in, industry or area of the world, every business owner has had countless issues in finding and retaining good employees.  The issue seems to be a never-ending balancing act in how to find good staff members and then keep them.  Staff tend to be either unqualified and need to be moved through the system in a short time period to minimize collateral damage…or they are good and leave the company to become competitors.  This balancing act requires constant attention, time and focus and energy from a business owner’s standpoint.  Where this dynamic gets tricky is when a company expands into new locations where the owner is not present every day.  If there are any holes or kinks in the system, scaled growth that is dependent on employees tends to have a higher likelihood of failure. 

Our firm, Franchise Marketing Systems, supports business owners in creating an effective platform for franchising and grow their business through franchise expansion.  One of the primary values inherent in franchising is the dedication of the franchise owner operator that comes with the model.  An owner-operator has capital invested in the business and is committed to the success of the business they work in every day, I once had a client come to me after a successful franchise model was put into place and the first of several territories were opened.  It was then that he realized the difference between employees and franchisees and he said to me, “Mr. Conner, it’s funny, I get more out of someone who has paid me $50,000 than I get out of employees I was paying $200,000 to do the same job.”  This particular client was in the oil field services business which is notorious for high costs associated with staffing and he had been hiring personnel to perform the oil field maintenance services with very little success.  Despite well paid staff, the same attributes were showing with the employees as they do in food service or retail, the employee just doesn’t care about the job as much as an owner. 

Certain industries might be even more susceptible than others to this issue of staffing such as restaurants and food service, but the dynamics of employee commitment is non-industry specific.  What this means is that as the owner of the business, there comes a point where the business’ growth is hindered by the ability to keep new staff in place being productive and supporting the overall mission for growth.  There have been many businesses that have grown organically and hired employees to manage the operations which grew to a point and then found they couldn’t manage the operational requirements of the new company owned locations.  Some grew to 3 or 4 units and then closed 1 or 2 to get back to the amount of stores they could manage.  Employees, when not managed every day, tend to fall off on performance levels.  Elements such as increases in theft, decreasing levels of customer service and higher levels of operational missteps tend to happen with more frequency when owners aren’t onsite.  When a franchisee makes the investment in a business, they have their own skin the game and they take on the responsibility of managing the day to day business essentially eliminating these operational risks that come with new unit growth. 

Franchise development brings many advantages to a business, but quite possibly the single most significant advantage might be this aspect of human capital being brought into the company.  The idea behind franchising is what is relevant to any business owner in that in order to grow, the business owner needs to find ways to remove themselves from the operational side of the business and promote themselves to a management role.  This transition to strategic from operational requires systems, processes and the ability to duplicate a business model, franchising is the epitome of this transition and the ultimate expression of scale.    

For more information on how to franchise your business, contact Franchise Marketing Systems:

Christopher Conner

President

Franchise Marketing Systems

[email protected]