Thoughts on the 2013 Faegre Franchise Summit

August 23, 2013

Recently I attended as a sponsor the annual Faegre Franchise Summit. It’s always one of my favorite franchise industry events of the year and really gets me enthused about the industry I work in and the high quality of people in it. This year’s event was no different, and as promised by event host Brian Schnell, it was the “Best Summit yet!” Another reason I like this event so much is that with just over 100 franchise execs in attendance, it offers the opportunity to interact and share best practices in-depth in an intimate environment.

This year’s theme focused on leadership within your franchise system and how incredibly important that is in driving every aspect of your system. We touched on culture, marketing, development, franchisee involvement in decisions, compliance and overall creating and leading the vision of your brand. The timing of this topic was spot on as the last few years have been a challenge to most franchise systems due the economy and lack of capital available from lenders for expansion or new growth. Most brands have had to retrench and refocus on unit-level economics, effective benchmarking, operational efficiencies, and do this in a time of anxiety and challenging cash flow for the franchisees. Those that did it well, did it with strong and effective leadership and continued communication with their franchisees. As many of the speakers noted, it’s about improving unit-level economics for the franchisees and providing them the right resources to move forward, yet at the same time, it’s also about providing leadership so they don’t stray from the brand message and they stay engaged in the system processes so as to maintain that brand consistency. We’ve all seen the negative results of those brands that did not maintain consistency in their standards and messaging over the past 4 years and they are paying the price for it today.

The Summit didn’t break new ground on leadership, but it was a very good reminder of how and why effective leadership is important at whatever stage of your franchise system. In the end the message for me that I continue to pass along to my clients is that having a good concept alone isn’t enough, or the right location, or simply being liked; it is about setting the right vision for your employees, franchisees and brand, and then leading. It’s a good reminder for all us to take a hard look at our own approach, evaluate what’s working and what’s not, and identify those areas where we can improve.

I constantly talk to my clients about how to reduce their vicarious liability as the franchisor and a system as a whole and, in the end, leadership is key. Communication, culture, development, operations, compliance, brand management are all areas that some way or another can impact you at the franchisor level with respects to vicarious liability and making a strategic decision to lead in these areas will not only improve the effectiveness of your system and results for your franchisees, but it will also reduce your vicarious liability exposures.