Bookmark and Share

How to build a franchisee advisory board

An indispensable tool for a growing chain

Bottom line: If you’ve got a growing franchisor as a client, they need to know the benefits of a franchisee advisory board and how to put one together. It can help them grow smarter and faster, while increasing communication and giving more ownership in the brand to franchisees.

If a franchisor wants to streamline operations, grow business or simply improve communication with the operators in its system, then the restaurant should consider building a franchisee advisory board. Boards should include four to six franchisees and typically meet at least quarterly to provide a sounding board for the franchisor. If you think a franchisee advisory board could help your client’s concept, pass along following pointers:

Wait until the concept is ready
Establishing an advisory board means the franchisor is going to hear lots of suggestions about potential changes large and small. If the operator has limited capacity for meetings—let alone instituting any improvements that come out of them—it may not be the right time to start a franchisee advisory board. “Don’t rush to establish a board until you are ready to use the members’ talent and listen to their input,” says Michael Seid, a West Hartford, Connecticut-based franchise consultant.

Seek diversity
When selecting board members, franchisors should look for a range of experience. For example, recruit owners of single-restaurant franchises and those with multiple restaurants. Consider geographic diversity as well as both large and small markets. The operator may want to include one or two relatively new franchisees, but to get the most from a board, most members should be relatively experienced.

Prepare for tough questions
As the head honcho, the franchisee may be surrounded by people who agree with his every move. Don’t expect that attitude from franchisees, who typically relish the opportunity to second-guess franchisor decisions. “Owners fall into the trap of honestly believing that they understand everything about unit economics or how a location works with consumers. Working with a good advisory board changes that paradigm,” says Seid.

Respect the fact that board members have skin in the game
Whether your operator is introducing a new design or revamping the menu, expect franchisees to spot unexpected consequences and costs in a heartbeat. “Franchisees tend to be far more skeptical than corporate staff when it comes to ideas that put their money at risk for uncertain gains,” says Jeff Elgin, CEO of FranChoice, which helps match potential buyers with franchise opportunities. “This is one of the best reasons to have an advisory board.”

Keep it in perspective
Any advice gleaned from a franchise advisory board is just that: advice. It’s not a vote or a command. “The reason I like advisory boards is that, at the end of the day, you don’t have to listen to them,” says Tim Bryant, a Maine-based attorney who specializes in franchising.