25 - How to sell to franchised systems

Question 1

What is the primary function of most franchised systems?

Answer 1

To distribute their core offering, such as fast food, tools, groceries, printing, or financial services.

Question 2

What is an example of a brand that has successfully expanded through franchised systems?

Answer 2

Seattle’s Best Coffee, which is now available in over 100,000 outlets.

Question 3

What roles do franchisors and franchisees play in a franchise system?

Answer 3

Franchisors are specifiers, while franchisees are the actual customers.

Question 4

What is a purchasing cooperative in a franchise system?

Answer 4

An entity that acts on behalf of franchisees to negotiate terms and conditions.

Question 5

What is a key advantage of engaging with a franchisor?

Answer 5

Immediate engagement with decision makers.

Question 6

What is a disadvantage of engaging with a franchisor?

Answer 6

Difficult to differentiate from other aspirant suppliers.

Question 7

Fill in the blank: The three players in a franchise system are the franchisor, ________, and purchasing cooperative.

Answer 7

franchisee

Question 8

What are the four business drivers to focus on when engaging with a franchise system?

Answer 8

• Increase sales
• Reduce costs
• Increase productivity
• Enhance the brand

Question 9

True or False: Franchisees are always focused on what’s best for the entire franchise system.

Answer 9

False

Question 10

What must a supplier demonstrate to succeed in a franchise system?

Answer 10

That their products and services meet specifications and standards.

Question 11

What is one way a supplier can help increase sales for a franchise system?

Answer 11

By helping to grow sales at normally quiet times or increasing the average cheque.

Question 12

What is essential for a supplier when introducing a new product to a franchise system?

Answer 12

Support across multiple functions of the franchise system.

Question 13

What is the impact of franchisee resistance on new product introductions?

Answer 13

Higher resistance increases the risk of not delivering expected benefits.

Question 14

What is a crucial aspect of managing franchise system relationships at a strategic level?

Answer 14

Maintaining good working relationships with all system players.

Question 15

What is the long-term benefit of achieving strategic vendor status with a franchise system?

Answer 15

It can lead to long-term relationships and significant business growth.

Question 16

What is one of the strategic focuses of franchisors?

Answer 16

Brand recognition, awareness, and preference.

Question 17

What is a core concern of franchisees?

Answer 17

Franchisee sales growth and profitability.

Question 18

What is a key concern for purchasing cooperatives?

Answer 18

Minimizing operational costs to franchisees.

Question 19

Fill in the blank: Managing tactical relationships with franchise systems involves minimizing costs while dealing with hundreds or ________ of individual outlets.

Answer 19

thousands

Question 20

What challenges do suppliers face when dealing with individual franchisees?

Answer 20

Quality, supply, equipment performance, and running costs.

Question 21

What must suppliers do to resolve issues for individual franchisees?

Answer 21

Provide a clear point of contact and resolution process.

Question 22

What are individual businesses within a franchise system referred to as?

Answer 22

Franchisees

Question 23

What issues can affect individual franchisees regardless of the overall system performance?

Answer 23

Quality, supply, equipment performance, running costs, replacement parts

Question 24

How can a franchisee escalate a concern?

Answer 24

Through its purchasing cooperative or the franchisor

Question 25

What role does a purchasing cooperative play in a franchise system?

Answer 25

Champions the cause of its individual members

Question 26

True or False: A franchisee is part of a management structure that can direct it to accept group solutions.

Answer 26

False

Question 27

What can unresolved issues with a supplier lead to?

Answer 27

A test of supplier performance and responsiveness

Question 28

What is a challenge for large suppliers in servicing franchisees?

Answer 28

Establishing a network of national and regional contacts

Question 29

Fill in the blank: Smaller suppliers may need to ________ to provide the level of responsiveness expected by franchisees.

Answer 29

Outsource this role or use technology

Question 30

What is important for maintaining consistency in issue resolution across a franchise system?

Answer 30

Ensuring that responses are consistent across regions

Question 31

What can happen if a local representative does not adhere to franchise system rules?

Answer 31

Serious consequences for the account relationship

Question 32

How should challenges from franchisees be addressed?

Answer 32

Channel them into proactive recommendations for official trials

Question 33

What is a benefit of maintaining good relationships with franchisees?

Answer 33

Opportunities for feedback and competitive intelligence

Question 34

What should suppliers demonstrate when issues are raised at a regional or national level?

Answer 34

Knowledge of the issue, its impact, and rectification steps

Question 35

What type of intelligence can alert representatives identify?

Answer 35

Pricing issues, positioning issues, compliance abuses

Question 36

What are examples of creative solutions identified by alert reps?

Answer 36

* Reusable basket for serving meals * Delivery packaging as shelf displays * Temperature sensitive tell-tale flags * Display units leveraging dead space

Question 37

True or False: Franchisees have complete freedom in choosing their pricing without any agreements.

Answer 37

False

Question 38

What are key challenges in managing a relationship with a franchise system?

Answer 38

* Understanding system rules * Providing responsive infrastructure * Moving knowledge to account managers * Monitoring performance and compliance * Spotting opportunities or threats * Identifying key opinion leaders * Maintaining continuity in account teams

Question 39

What is a special feature of franchise systems regarding franchisee turnover?

Answer 39

Relatively low turnover allows for long-term relationships

Question 40

What advantage do suppliers gain by investing in relationships with franchisees?

Answer 40

Good relationships with key opinion leaders over time

Question 41

What is a potential return on investment from tactical management of a franchise system account?

Answer 41

Multi-year returns that are hard to match on typical retail accounts

Question 42

What recent interest did Tesco express regarding franchise systems?

Answer 42

Market expansion in South Korea and other territories

Question 43

What advantage do suppliers have who develop competence in working with franchise systems?

Answer 43

Distinct competitive advantage in the market