In the journey of building a successful franchise, the structure of your Franchise Support Office (FSO) plays a pivotal role. As your network of franchisees grows, your FSO must evolve to meet the increasing demands and complexities of managing a franchise operation. This article outlines the different phases of growth for a franchisor and the corresponding FSO structure needed at each stage.

Phase 1: Start-Up

At the start-up phase, the franchise operation is in its infancy, often with only a few franchisees. In this phase, it’s common for new franchisors to attempt sharing infrastructure between company-owned stores, pilot units, and the franchise organisation. However, this approach can be problematic, as the needs of franchisees often differ significantly from those of company-owned stores, leading to potential friction.

Key Considerations:
  • Shared Infrastructure: While some infrastructure can be shared effectively if the FSO is close to a company-owned unit, this proximity can also lead to resource conflicts and interruptions.
  • Adequate Premises: The FSO should exude professionalism without being overly lavish. A reasonable part of town and a quality building are essential to instill confidence in prospective franchisees.
  • Dedicated Space: To avoid the operational hustle and ensure smooth implementation of the franchise program, dedicated premises for the FSO can be advantageous.
Staffing Needs:
  • Franchise Director/Manager: Often and intially the entrepreneur themselves, this person must be enthusiastic, possess excellent people skills, and have a deep understanding of the business. Moreover, an ability to explain technical concepts well, both verbally and in written format, and to prepare financial projections will feature high on the list of the desirable attributes the incumbent should possess.
  • Franchise Champion: An all-rounder who prepares the franchise package, handles recruitment, and delivers training. This role is crucial in the early stages and may evolve into a more specialised position as the network grows. Eventually this person could move into the position of franchise manager, therefore, the profile of the ideal incumbent would be similar to that described in the previous paragraph, albeit at a more junior level.
  • Office All-Rounder: Provides secretarial support and assists both the Franchise Director and Champion. This role requires strong people skills, computer literacy, and the ability to handle pressure.

Phase 2: Growing Phase

As the franchise network expands, typically within 3-5 years, the FSO must grow to maintain service levels and meet the needs of an increasing number of franchisees.

Key Considerations:
  • Specialised Roles: The addition of key personnel allows for greater specialisation, improving efficiency and support quality.
  • Enhanced Training Facilities: Moving training sessions away from operational areas to dedicated premises can enhance the effectiveness of the training.
Staffing Needs:
  • Field Support Person: Provides ongoing support and troubleshooting for franchisees, ensuring consistent quality and adherence to franchise standards.
  • Additional Support Staff: As the network grows, additional roles in marketing, operations, and administration will be required to support the expanding franchise network.

Phase 3: Established Franchisor

In this phase, the FSO evolves into a full-fledged organisation with specialised departments and roles, making it possible for the Franchise Director to withdraw from day-to-day operations and focus on strategy instead. The rate of development experienced by franchise networks varies widely and is affected by such divergent factors as industry sector, the franchisor’s ability to make the necessary investment into the franchisee support infrastructure and level of tolerance for the absorption of initial losses. Generally speaking, rapid expansion tends to cause higher initial losses but this should be offset by the fact that breakeven will be reached sooner, followed by rapidly increasing profit performance from then onwards.

Key Considerations:
  • Strategic Focus: With all key positions staffed by specialists, the Franchise Director can shift focus to strategic planning and growth.
  • Advanced Infrastructure: The FSO should have advanced systems and processes in place to support a large network of franchisees efficiently.
Staffing Needs:
  • Specialists in Key Areas: Roles in finance, marketing, systems, operations, product/service development, training be filled by professionals with expertise in their respective fields.
  • Trainer: A full-time role focused on delivering comprehensive training to new franchisees.
  • Dedicated Support Teams: Separate teams for franchisee support, compliance, and quality assurance are crucial to maintaining high standards and addressing franchisee concerns promptly.
  • Expansion and Innovation Teams: As the network stabilises, focus on innovation and exploring new markets becomes essential for sustained growth.

Conclusion

The structure of your Franchise Support Office must evolve as your network grows, transitioning from a lean start-up team to a specialised and professional organisation. Balancing the need for cost efficiency with the necessity to project professionalism is crucial. By planning ahead and scaling your support infrastructure in line with your franchise network’s growth, you can ensure a smooth and successful expansion journey.

Franchising Plus