Why Multi-brand Franchise Organizations Can’t Move Forward Until They Step Back

Jun 17, 2022

Chris Heile
LinkedIn

How to leverage brand to unify & build value in multi-franchise organizationsMost every industry goes through a renaissance at some point. A moment when markets align, lucrative business models come to life, investors flood in and sustained growth becomes possible.

The franchise industry is seeing this renaissance right now, as many emerging companies are creating new opportunities for franchisees in new consumer and B2B categories. These companies are making franchise ownership more accessible with less investment and providing more opportunities for people to turn interests and skills into successful businesses.

This new crop of multi-brand franchise organizations is aggressively building broad portfolios of brands across new categories like home maintenance, health and wellness, education, automotive and more. And they are proving the kind of value that can be achieved when multiple brands are united to build a more powerful and reliable stream of revenue.

But the transition is far from complete, because these new models are still in the process of maturing, bullet-proofing their market strategies and ultimately defining their long-term position in the market. This is a common pattern we see as industries evolve and mature: organizations build a solid and repeatable business model, show near-term market opportunity but often struggle to build the processes, systems and training programs required to scale multiple brands simultaneously.

One reason is because these models represent highly complex, multi-level organizations with multiple audiences and many critical stakeholders. They essentially operate as two very different businesses: one business focused on selling franchises to franchisees, and the other focused on developing franchise brands and selling services to end consumers.

But to make this challenge even more daunting, these organizations must consistently attract new franchise brands to acquire, and woo investors willing to fund the rapid growth opportunities that are clearly present.

So how does leadership simultaneously manage two very different businesses with so many different masters? How do they scale multiple brands and create greater quality and predictability of earnings? And, how do they do all this while continuing to aggressively acquire new franchise businesses?
While there is no easy answer, achieving the greatest possible success across all of these demands and audiences stems first and foremost from the ability to unify key aspects of the portfolio. Every brand, every stakeholder, every market, every leader, every business process, decision and action must come from a core set of common and unified beliefs that bring all the pieces together.

To help clarify this, I’ve broken the biggest challenges and opportunities down into the two distinct businesses these organizations are running.

Business Number 1: building a house of brands


If you hit 10 keys on a piano, you’re not making music. Similarly, every element of a business needs to be carefully molded and shaped to fit together in a specific and intentional way. But how do you know what that “shape” should be?

The acquisition process within most organizations prioritizes and codifies processes for finding companies that fit a certain mold, but in reality, that happens far less than anyone will admit. Opportunities, deals and being in the right place at the right time often ends up taking precedence over perfect fit. The fact is, the employees at many of these acquired brands have very different views of why they are part of this bigger organization, and there are wide disparities in how much they’re willing to participate and toe the line.

So what singular vision can motivate, inspire and bring all the disparate businesses in a portfolio together in a way that represents the interests and contribution of a range of brands, services, systems, skills, abilities, people, culture and business acumen? That is the role of a master brand. And by master brand, I don’t mean a high profile name and logo, but the glue that holds all the disparate elements of your business, audiences and markets together.

The “glue” is built around commonalities


The important thing to keep in mind is that if you dig deep enough into all the businesses in your portfolio, their people, culture, ethic, biases and beliefs, you will always - and in every case - find commonalities.

And with a deep understanding of these commonalities, strong leadership with clear vision can begin to mold their franchises into a common approach to business.

Finding these commonalities starts by digging deep to understand both the tangible and intangible elements of each franchise brand, from the top of the organization all the way down to the front lines. This is not a business or leadership assessment, but something much deeper. You must understand the components that hold these companies together: their ethic and motivations, how they work and why they work the way they do, their dedication to their team and their customers, their points of pride and level of commitment.

This work requires honest conversations and the ability to listen intently. Your goal has to be to find the most compelling and motivating commonalities across every aspect of the company and their people. Yes, that feels like a lot of effort, but it pays massive dividends when you work to bring everyone together under a common umbrella. People contribute instead of complain, they see opportunities instead of frustrations, they begin to connect the dots in how their role, contribution and value have purpose and meaning for themselves, their team and the collective organization.

Bring the right pieces together in the right way


Once you define all the common elements, it’s time to build models. Model building is not just about getting the pieces to fit together, it’s taking the time to explore every possible combination of elements to find the best possible fit.

The models represent all the ways the commonalities you discover can be pieced together, sometimes elegantly and sometimes inelegantly. But this exhaustive process shows how prioritizing certain traits can add to or detract from the whole. You want to prioritize models that leverage not only the largest number of strengths, but the strengths that are most inspiring, differentiating and empowering for your company, its people and its business prospects. These models can become the foundation for the culture of your organizations, your vision of HOW you want to work, the impact you want to make on the market, the impact you want to have on your people and the customers you serve. These models will help define your common beliefs as well as your shared vision, values and the core ethic of your company. Push yourself to be honest about what you want for your business, but be certain it matches everything your portfolio of brands and your people are capable of.

Make a statement that defines your business and your culture


Identifying the ideal model and the common threads that connect all of your people and processes establishes a foundation. But you need to distill it down into a single, inspiring message and story that instantly connects people and brands, motivates action and participation and builds a common bond across franchises, people, culture and approach to work.

This becomes a rallying cry internally, but also establishes clear expectations for what your name represents in the marketplace, and what collectively all of the franchise brands in your portfolio represents for every customer in every market and in ever interaction. This message and vision of your master brand will attract stronger franchise prospects, investors and customers for your franchisees (more on that next).


Business number 2: building franchisee success


This is where the challenges of growing a multi-franchise organization while simultaneously growing individual franchise brands becomes evident. At best, it’s three-dimensional chess. At worst, it can become a perpetual road block to generating long-term value in your organization.

The solution is not a substantial investment in top-down marketing for each brand, which is not financially viable and rarely translates into success for franchisees. Instead, success comes from a bottom-up approach, franchisee by franchisee, market by market. The people on the ground have to be the driving force for your success. But to align them, they need to feel supported and have to embrace equally a set of proven tools, processes and practices.

To make this happen, the leadership of each brand – as well as the franchisees in the field – have to see real value in working together in a system that is often very different from what they are used to, or doesn’t naturally match the way they work. When leaders try to demand adoption, they end up creating animosity and more roadblocks.

Alignment comes from involvement


A far more successful approach is to bring together teams from across the portfolio to help develop the systems and processes. And this doesn’t just mean conducting town halls, it means listening and building on the ideas and requirements that are brought up. Adoption comes from a culture of belief and engagement, where everyone feels their opinion is heard. Leaders and employees are far more willing to collaborate, compromise and adopt when important aspects of what they need are addressed in some way in the solutions that are built.

You may notice this sounds very similar to the processes outlined in the first business of the multi-brand franchise organization. Listening to and inspiring the leaders of these brands to follow and build upon the vision of the company can only happen if you build alignment.

Provide the right tools


Another important factor in building franchisee success comes from supporting franchisees with the right tools. This includes communication and sales tools to empower each franchisee to be more successful in building their customer base. These tools have the added responsibility of ensuring consistency of messaging for each brand, and also consistency of messaging across all brands in your organization. This type of communication management requires centralized components that can easily be customized to fit the needs of each market. Effective Marketing Resource Management tools help control the narrative, but also empower franchisees to customize communication as needed for each market.

How do the two sides of the business come together?


This is where the real magic happens. When built properly, the two sides of your business work in sync to leverage the franchise brands to elevate the master brand, and the master brand works to elevate every one of the franchise brands.

What we’ve outlined here is how you build a powerful brand, an inclusive culture and a fertile ecosystem. Brand is not just a nice-to-have, it’s a critical business asset that inspires the people within your organization, grows your outside presence and builds your reputation and long-term value. Every investment in brand is cumulative, it builds upon itself. And when managed with discipline and intent, it will become your greatest competitive advantage.

The right time is right now


At some point, investing in a unifying brand will absolutely become a priority for your business. But in judging how important it is to start now, let me leave you with this: every day you wait to define your brand and build the culture of your organization, your leaders and employees become less certain, and the vision more nebulous and harder to define.

The time is now. Because your business is about more than the rapid growth you’re experiencing now, you have the ability to truly lead the industry, to build a meaningful culture and prove the long-term value that can be created when people, culture, systems and processes are tightly unified under an inspiring brand.

Chris Heile, a noted branding expert, is the Chief Strategy Officer at Intrinzic and has worked with Vya on several projects. Learn more about Intrinzic and their branding services.



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