What do site visits, paperwork, and meetings have in common? They all prevent franchisors from seeing the day-to-day pains and successes that their franchisees experience. Throw in dozens of locations to manage, and visibility becomes foggy.
That's why many franchisors rely on a franchise advisory council (FAC). These groups provide actionable insights and recommendations from those who spend their days in the thick of it.
What is the purpose of a Franchise Advisory Council?
A franchise advisory council (also called a franchisee advisory board) is a select group of franchisees who provide recommendations and ideas to their franchisor.
Franchisees (representing the storefronts) and franchisors (representing corporate) benefit from sharing thoughts in a way that balances both parties' needs. Corporate needs to ensure their brand and messaging trickle down as intended to each store, while store operators have to feel good about those messages and how they are lived. Otherwise, disconnect grows and harms the franchisor-franchisee relationship.
A franchise advisory council meets a few times a year to discuss ways to improve this relationship and add to everyone's bottom line. In a franchise advisory council, it is the franchisees who are advising the franchisor on what to improve upon. When they meet, they discuss where corporate support lacks and changes to make. These subjects might include feedback on new multi-unit restaurant technology, menu and marketing initiatives, as well as assistance navigating supply chain, economic, or hiring difficulties.
In turn, franchisors can take these action items to corporate to advocate for change or assistance. The result could be new programs, technology, or resources that directly reflect the needs and attitudes of franchisees, their staff, and their customers.
While not every recommendation must be followed to the letter, making a real effort to apply suggestions can make franchisees feel like their presence on the council is more than just for show. FACs are also a great way for franchisees to meet and learn from the best operators in their cohort.
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What is the Difference Between a Franchise Advisory Council and a Franchisee Association?
A franchise advisory council is a group of operators selected by their shared franchisor formed in the interest of open communication and shared business growth.
On the other hand, a franchisee association is an independent organization that usually has no direct connection to the restaurant or the franchisor. These associations are kind of like clubs, as they consist of franchisees from multiple different businesses (and even business types).
While FACs have common goals and understanding due to all members' shared business, franchisee associations provide general best practices for franchisees to succeed in their business, whatever it may be. Here's a list of some well-known franchisee associations.
Finally, franchise advisory councils tend to include the best of the best, while franchisee associations often consist of those who are trying to improve and expand their franchise business. FACs are made up of those who have proven best practices to share with their franchisor and peers. Franchisee associations tend to consist of those who want to get to the level of success where they could be considered for a spot in an FAC.
How Do You Form a Franchisee Advisory Board?
Forming a franchisee advisory board can be accomplished in just a few simple steps.
1. Set a Threshold for Establishment
FACs offer the most benefit to franchisors who are pressed for time and have dozens of operators to work with. The value of an FAC starts to kick in after a minimum of operators or units are under one franchisor. If working with just a few operators, meetings among all franchisees can be collaborative and ad hoc, and an FAC may not be necessary.
Franchisee advisory boards become useful when getting all operators in the same room or on the same Zoom call isn't feasible (or exactly helpful). With that said, set a threshold for how many units or franchisees should be under the franchisor before it can be formed. If you're unsure how large the group should be, it's common for franchises with 10+ operators to start considering an FAC.
2. Develop Membership Criteria
An FAC shouldn't be composed of every operator under a franchisor — it's a privilege that should be reserved for the most successful franchisees. This is because these operators have proven their ability to run a thriving restaurant in the parameters of corporate's brand, and it's their input and recommendations that can help underperforming units — as well as corporate — improve.
Before extending any invites, come up with an idea of what the group of advisors will look like, such as:
- How many franchisees will be part of the board.
- Sales, employee retention, or year-over-year growth minimums for membership.
- How long franchisees will have a seat on the board.
“Franchisors should establish a system for selecting franchisee representatives from a broad range of geographic regions, to obtain a wide range of representation. Franchisors should give the franchisee members the ability to caucus amongst themselves and to elect their own officers or board members, to enhance the feeling among franchisees that the council provides a fair forum for franchisees to provide their input,“ says David T. Azrin, a partner at Gallet, Dreyer & Berkey.
3. Communicate Expectations or an Agenda
Instead of putting operators in a room and seeing what happens, council meetings should have a clear purpose, meeting cadence, and agenda, in addition to the overarching goal of improving the success of a franchisor's group.
Before each meeting, franchisees should be briefed as to what's on the agenda. Sessions should provide clear expectations for what will be discussed and what the goal is. For example, one half-day meeting of an FAC may look like this:
- 9:00 am: Meet, network, and breakfast
- 9:30 am: Navigating the brand's upcoming marketing campaign
- 10:30 am: Improving recruitment and retention
- 11:30 am: Debrief and present findings
- 12:00 pm: Lunch and open discussion
- 1:00 pm: Dismissal
This agenda gives attendees ample time to prepare what to say about strategy, marketing plans, and anything they want for the open discussion forum. Plus, during this time, they'll have the opportunity to meet and learn from other successful operators to get first-hand ideas for improvement.
4. Come Up With A Follow-Up Plan
Franchisees want to know that their time and insights are valued by seeing their recommendations put into action. While not every suggestion will (or should) be shared far-and-wide, making an effort to roll out the best ideas helps keep the council going strong rather than have it appear as a formality.
After meetings, the franchisor should boil the group's suggestions and findings into a relevant action plan to share with corporate and the rest of their operators. This ensures council members' voices are heard and their wisdom shared with the right people.
Recommended Reading: The Value of Restaurant Business Intelligence for Multi-Unit Operators
Who Should be on the FAC?
Remember, a franchise advisory council is not an open invitation to everyone who operates under the same franchisor. These discussions should produce proven best practices from the best of the bunch.
That said, franchise advisory councils don't just need to be composed of active franchisees.
Let's look at what makes an ideal FAC member.
The Ideal Franchisee on the FAC
Each FAC will have different needs based on the restaurant's concept, the level of corporate control, and the needs of the franchisor. What benefits one franchisor may not be the same for another. Some criteria to base the selection of which franchisees earn a seat on the council include:
- Years of experience with the franchise. These individuals have likely weathered varying economic struggles, established a healthy relationship with corporate, and have proven they can keep their business open despite hardships.
- Years of hospitality experience. These people didn't simply buy their way into the restaurant world. They've worked as operators, chefs, or restaurant professionals for years and know what it takes to run a restaurant.
- Sales records. These franchisees earn money for their units like it's their job.
- Growth numbers. Each year, these franchisees look back at what they grossed and say “I can do better than that!”
- Employee retention. In an era of ongoing restaurant turnover, these operators know how to keep staff around and keep the cost of churn low.
- Number of locations. One isn't enough for these franchisees. They love the brand and the business so much that they decided to expand their franchise business into multiple locations.
It's up to the franchisor to assign weight to any and all of the above criteria that make the most sense for the goals of their franchisee boards.
While the above criteria outline what it takes to be a permanent member of the FAC (or to serve a “full term”), the FAC might also accept rotating members based on the topic(s) on the agenda or the needs of the business. Some ideas for rotating members or guests might include:
- Restaurant consultants, who can speak to the state of the industry and best practices for restaurant success.
- Representatives from corporate — specifically for marketing and technology — who can provide a direct line from operators to the head honchos.
- Other franchisees, who may be granted a one-time admission to a meeting to see if they're a good fit for a seat on the board.
- Restaurant employees, who can give a voice to the back- and front-of-house workers at certain locations.
These rotating members are guests and should never overshadow or supersede the word of key members. However, they can often provide focus, a different perspective, and even more opportunities for insights.
Factors for Delivering Success with a Franchise Advisory Council
The biggest success factor for FACs is communication. Council meetings are an open forum for communication among franchisees, and their thoughts should then be communicated to franchisors (and ultimately corporate). The clearer the process and guidelines are for communication, the more successful an FAC can expect to be.
Other success metrics for FACs might include member satisfaction and attendance, percentage of ideas acknowledged by corporate, and profit/revenue change following FAC meetings.
Adding Value to Franchisees
Franchisors are the middleman between franchisees and corporate, and FACs provide a clear line of communication to the people in charge.
Banding together and supported by their franchisor, franchisees can surface feedback on menu changes, marketing campaigns, technology needs, and even corporate branding to the right people. Ideally, these comments will cause a trickle-down effect that reflects their needs and opinions. Ultimately, these changes can help franchisees express more agency and feel more ownership over their location(s).
“...Franchise advisory councils give franchisees a voice in the decision-making process, and that voice can be used to help steer the franchisor in a direction that treats franchisees fairly and helps put those franchisees in the best position for success at the unit level...,” says Azrin.
Getting Value as a Franchisor
Value of franchise advisory councils to franchisors is two-fold.
First, it provides a forum for successful operators to share their knowledge — validating their expertise, giving advice to franchisors to better the business, and boosting their morale.
Second, it helps to surface the most relevant comments, concerns, and trends from these franchisees to corporate. Again, this helps corporate develop campaigns and initiatives in the future that could fare better, which also improves profitability for individual locations.
“...A franchise advisory council is one of the best tools for getting the key information needed to help a franchisor stay on a path to success and harmony with its franchisees...,” says Ryan Whitfill, partner at Culhane Meadows.
Recommended Reading: The 7 Most Common Franchise Problems (And How to Solve Them)
Get Your FAC Started
Franchise advisory councils turn the foot soldiers of a franchise into a united front for change, feedback, and direction. With hundreds (if not thousands) of locations, corporate might be blind to the needs of a specific region, a crisis of staffing, misalignment on marketing, or a slew of other issues that could simply be resolved with better communication.
FACs provide an organized way for operators to share their thoughts, be acknowledged for their successes, and form a stronger bond with their franchisor and other franchisees. These groups can help corporate, franchisors, and franchisees find both immediate and long-term success and run a more profitable endeavor.
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