Creating and Maintaining Culture in a Fast-Growing Franchise System

“Culture” is that ineffable quality in any organization that gives it a self-identity. It tells managers and employees who they are as a group, and provides a touchstone for guidance when dealing with one another and with various people outside the organization.

Growing franchise systems face a particularly difficult challenge when it comes to instilling cultural principles: new franchisees are coming into the system constantly, the organization is not vertically integrated, the system is made up of individual owners (who bring their own “culture” to the business), and franchise networks tend to be spread over large distances both domestically and globally.

The best franchise companies use all of the cultural teaching tools at their disposal, and they are relentless at spreading and reinforcing the message of their organization’s culture through the following methods.

How to create culture in a franchise system

1. Training

Effective franchise training conveys more than the dry facts about business operations. It imparts durable stories and unforgettable legends about the organization, its beginnings, its leaders, and their philosophy of business. Initial training is the first opportunity to convey a strong message about company culture, and it continues with subsequent meetings and follow-up training.

To be truly effective, franchisees must become trainers of their own staff, and pass along the key portions of the organization’s culture.

2. Charismatic leadership

The largest franchise organizations in the world started with the efforts of a charismatic leader, as a franchisor executive once told me, “who could charm the birds out of the trees.” Their names are now legend in the franchising community: Ray Croc (McDonald's), Bill Rosenberg (Dunkin' Donuts), Bonnie Levine (Postal Instant Press), Fred DeLuca, (Subway).

Franchise leaders set the tone, articulate the philosophy, instill confidence in their franchisees and employees, and above all, convey the culture of their organizations with every visit, every letter, every franchisee encounter, every article, and every speech.

3. The mission statement

My all-time favorite franchise organization mission statement was developed by the Montana-based franchisor Great Harvest Bread Company:

Be Loose and Have Fun.

Bake Phenomenal Bread.

Run Fast to Help Customers.

Create Strong & Exciting Bakeries.

And Give Generously to Others.

This mission statement exactly captures the unusually strong and distinctive culture of the Great Harvest organization, and it is continually and consistently discussed, displayed in all stores, reproduced in the company’s internal and external documents, and promoted in training. It became the succinct statement used to convey the Great Harvest culture to its new members, owners, and store employees.

One of the best books on my shelves about building a franchise culture was written about Great Harvest: Bread and Butter: What a Bunch of Bakers Taught Me About Business and Happiness, by Tom McMakin (St. Martin Press, 2001). This should be required reading for new franchisors.

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4. Franchisee meetings and conferences

I have often observed that there is “a little Mary Kay” at a good franchise conference. That is to say, there is a high level of excitement and involvement, of self-regard and self-celebration. Featured speakers, management speeches, entertainment, and vendor presentations all speak volumes about the culture of the organization.

The annual conference can be a highest expression of a franchise system’s culture, singling out and rewarding franchisees as strong examples of cultural success. At Great Harvest, for instance, the company gives five franchisee-recognition awards—one award for each of the five lines of the mission statement—to the franchisee who achieved something extraordinary in that portion of the mission.

5. Communications tools

The twenty-first century has made us all communications experts, I suppose, but franchise systems have a compelling need to communicate clearly with their franchisee networks. If franchisors must always be prepared to answer the franchisee question: “What have you done for me lately to earn your royalty?” communication of continuing attention, caring, and support is an important part of the answer.

Electronic newsletters, email blasts, notices, operational tips, announcements, and the like all offer a chance to convey the organization’s culture and philosophy, and should never be overlooked as a prime tool of spreading the culture of the franchise system.

“We want our franchisees to know that we are all on the same team, and one of the steps we have traditionally taken is to communicate regularly through our intranet system.” says Jim Bugg, Jr., president of Interiors by Decorating Den, a national franchisor of mobile interior decorating businesses, “Recently we began a biweekly, all-franchisee telephone conference call where we offer a system-wide update and highlight the accomplishments of particular franchisees who have been succeeding in this recession. It’s been very well received.”

Culture unifies a franchise network

Every organizational culture is unique; no two are the same. In the franchising world, culture actually creates the connecting bands of the organization, making the franchise network something more than a bunch of people using a common brand.

Building and maintaining the cultural fabric of a franchised network takes the care and attention of the franchisor’s leaders, who are well advised to use every tool available to them in the effort.

RELATED: Important Factors to Consider Before Franchising Your Business

About the Author:

Andrew Caffey is one of the nation’s leading franchise legal specialists and he represents franchisors across the United States. Caffey served as General Counsel of the International Franchise Association, a member of the Governing Committee of the ABA Forum on Franchising, and Chair of the ABA Forum on Franchising. He also is a member of the bar in Maryland and the District of Columbia, and a member of the Panel of Neutrals of the American Arbitration Association. Caffey has appeared on numerous franchise programs and is a frequent speaker and author on subjects of franchise and business opportunity regulation.