Softening Audits and Inspections, Relationships Drive Standards Compliance



Effective Field Visits: 6 Ways to Maximize Profitability

Several months ago I came across Greg Nathan’s blog on improving the effectiveness of franchise field visits. Right away I was interested by the simple fact that he did not refer to the visits as “site inspections” or “compliance inspections” or, worse yet, “site audits.”  Nathan gets the dynamic between franchisor and franchisee, and for that matter, any business relationship where compliance standards are critical and the most effective means by which you can ensure adherence is by building and maintaining a communicative, positive relationship between the reviewer and person being reviewed. In sales organizations, good operations standards lead to profitability. The best way to sell your standards is to show your owners and managers their stake in compliance. Therefore, field visits are about business consultation, not an IRS audit.

 Do Field Inspections and Compliance Audits Work?

I bemoan inspections and compliance audits because of the punitive connotation. You expect someone to come in and start grading you with a red pen. To an extent, this is a necessary function in many industries where lack of compliance can jeopardize someone’s physical or financial well-being. However, in the long run, if what you want to inspect is how well one of your managers or owners is towing the line on your brand standards, these visits are costly and you want to be able to identify where they are challenged to meet certain standards and how you can mentor and coach corrective action. Nathan sees these visits as profit-driven, Compliant managers are more likely to be profitable ones if you have a strong brand and well-written standards and codes. He also sees these visits as an opportunity to measure customer service. Without the service component, your model lacks long term viability. Being on-site and watching the business or department operate will tell you how well these standards are being met. Being on-site is the only way to accurately assess that.

Nathan also stresses the importance of learning the local landscape that owners are in from a competition standpoint. If all politics is local, it is much easier to sell a national sales model in your distinct markets if your field consultant knows his owners’ top local competitors. This speaks to Nathan’s 5th point in maximizing profitability; building franchisee commitment to your vision and brand values. If you want to drive compliance, you have to sell the why and you can’t truly understand whether or not your owners and managers are on board with that unless you’re interacting with them and seeing the model through their eyes.

 Compliance Inspections and Audits Don’t Go Well with Beer

 I have found that owners and managers respect and listen to you when you take the time to come to them. Many of our clients are weary of coming in as the “police” when checking for compliance to standards. I always made a point to have dinner or a happy hour with my franchise owners while I was in town. I was on their turf, on their time. I wanted to sit with them and step away from the daily tactics of franchising and listen to their story. Why did they get into this business? What was their background? Most of them are proud of some success that they have had in their past careers. To what extent is their family involved in the business. The stories tell you everything. I have yet to meet a new franchise owner whose number one goal was not financial independence. So I would sell the brand standards in terms of helping them achieve their financial goals. It is easier to get compliance when they owners feel like every day they are not following e recipe is a day they fall short of reaching their financial goals. The bottom line, and Nathan’s 6th point is that this is done on the foundation of a relationship, not a cold inspection.