How to Ensure Franchise Compliance

How to Ensure Franchise Compliance

A franchised brand stands or falls by how completely a franchisee preserves its identity and standards. Ken Phipps of Gold’s Gym explains what must be done to ensure satisfactory compliance


The beginning of every franchise story starts with one common factor: an original vision according to which all future franchise development must abide. As franchisors, we have a responsibility to our customers and to ourselves to deliver a consistent brand experience, which is why franchise compliance is so important.

When you take a brand from its domestic roots and place it on an international stage, compliance becomes a bit more complex. Globally, different approaches to promote the brand should be taken that embrace local cultures and community.

However, the brand still must be protected. Franchise brands that have earned worldwide recognition do not achieve those reputations by foregoing their original brand standards. The brand can recognize when compliance matters should be looked at on a case-by-case basis.

How can you safeguard and support consistency with multiple locations around the world representing the same brand on a daily basis? Here are four tips for franchisors when it comes to franchise compliance.

Tip 1: Clearly Identify Your Guidelines

From the minute a franchise operation opens, compliance should take a high priority. Verbal communication of expectations is never enough. If you want something done a certain way, put those expectations in writing.

The system for compliance should clearly outline what is expected of a franchisee. Brand guidelines should be addressed not just as suggestions but as mandatory standards. Think of compliance as a mutually agreed upon contract, not a guidebook.

This is helpful not just for a franchisor, but for the franchisee who is working to maintain a solid reputation and their role in a grander network of like-minded businesses.

More often than not, if a compliance-sensitive issue comes along for a franchisee, a review of the written compliance guidelines should easily be able to provide the right solution.

If not, and/or if reoccurring cases arise with one particular area of compliance, it is time to update those standards in writing to continue down a common path for all involved.

Tip 2: Have a Team Dedicated to Compliance 

The best way to keep everyone accountable is to have someone (or a whole team, depending on the size of your organization) to handle compliance-related issues. From franchise system managers to social media monitoring and everything in between, franchisors must employ dedicated individuals and empower them to be the eyes and ears of the organization.

From field visits to grassroots locations to online, real-time monitoring of social media posts and brands on the internet, it is a responsible franchisor’s duty to “check in” on your franchise network and make sure franchisees are following brand standards and not trying to reinvent them instead.

But do not think of this as an adversarial relationship.

People who work in compliance are equally focused on supporting franchisees as well as monitoring them to ensure and protect the very brand they all champion. When staffed correctly, these members of the team will actually become a welcome asset to your franchise network, and franchisees will proactively reach out with questions on how best to address something in their business.

Tip 3: Respect the Operator

When it comes to the various aspects of branding, there are certain matters that cannot be compromised, such as the logo of a franchise or the colors used in all brand standards. But there can and should be room for discretion where a franchisee can expand in the right direction on the concept itself. That could involve the interior décor of your franchise locations where it makes sense for a higher investment.

If your franchisee wants to upgrade an operation with a build-out that makes sense for certain real estate, it is an option worth considering within adherence to major compliance rules. In countries where master developers and their franchisees are the “experts” in those markets, let them recommend ways to incorporate unique approaches to the original branding model as they see fit. Then, working with the franchisee and the brand’s compliance team together, work to ensure that it still fits the overall brand image in its execution.

Tip 4: Reward Compliance

Franchisees do not need a trophy just for doing the job they signed up to do.

However, when things are going well for a specific franchise location, let them be the shining example of compliance to the brand at-large. A wonderful reward for operational excellence is to recognize that success in full view of their peers.

Franchise awards (rookie of the year, franchisee of the year, sales leader of the year – you name it) are a rock-solid practice to encourage similar best practices across the board.

Highlighting an outstanding franchisee promotes the kind of admiration that turns envy into action. And seeing best practices from the field rather than the home office is the ultimate motivation for fellow franchisees, using your compliance stars as their mentors!

If you can stick to these useful practices that combine a value for brand consistency with an appreciation for franchisee innovation, then you will have a solid framework for how to ensure franchise compliance moving forward. 

ABOUT THE AUTHOR
Ken Phipps is Director of Global Franchise Development for Gold’s Gym Franchising LLC. He can be reached at ken.phipps@goldsgym.com or 214-296-5026

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