It is common for new business owners to face some fears because establishing an enterprise is challenging and risk-laden. What if the business fails? What if they donÕt have the experience needed to be profitable? What if the staff arenÕt up to scratch? What if they have bitten off more than they can chew?

The difference between starting a business on your own and becoming part of a franchise system is that the latter often has a well established support system in place to help you overcome these fears. Depending on the size of the franchise, this support system can comprise any number of head office roles, all trained in specific areas and all working towards a common goal.

Greg Nathan, managing director of the Franchise Relationships Institute, says having a well structured business with clearly defined roles for each staff member is essential for the franchise to grow.

“Whether you’ve got four franchises or 40, you still need to be clear on your branding. You need to have disciplines of operational procedures and policies so you need these people in head office to develop these systems and that then gives you the ability to grow,” he says.

Key roles

According to Nathan, the first role that the companyÕs founders look to fill is usually that of the operations manager. This person will be visiting and supporting franchisees and may also provide franchisee training. Next might be the finance manager who would be responsible for budgeting, collecting royalties, ensuring that the company is viable and that there is enough money to cover overheads and pay bills.

“Franchisee selection is another key role,” he says. “Now, the CEO normally does that him or herself initially because theyÕre bringing people into their family if you like, and they want to meet the people and get on with them, but later on they might bring in a franchise sales manager, or they can sometimes outsource that, and then they would probably bring in a marketing person.”

While the franchisee gets to enjoy the expertise and knowledge within this head office structure, they have their own role to fulfil. “The franchiseeÕs role is to create happy customers,” Nathan explains. “So the franchisee is serving the customers, looking after the customers, selling to customers and thatÕs got to be their focus. Whereas the head office people are giving the franchisee the tools on how to create the happy customers, and the franchisee is using them. The franchisee is the tradesman whoÕs laying the bricks and building the walls and the franchisor is making the bricks and the mortar and giving it to the franchisee.”

The more a franchise grows, the more structure it needs. While many franchisors would prefer to keep all the separate roles including PR, marketing and IT in-house, often the best option is to outsource to an external company.

“I think in an ideal world the franchisor would certainly like to have all those different departments in-house but the reality is youÕve got to get a certain amount of franchisees in the system before you can start adding to the toolbox that you have with internal. So I guess itÕs a progression,” comments Andrew Kelly, general manager of PR services at Franchise Careers.

The benefit of keeping as many roles in-house as possible is that the franchisor can be confident that each staff member understands the franchising system, the brand and what it represents and can be more closely monitored than an external company.

The flip-side to this however, is that it can be more expensive. “You can use a consultant on a need-be basis and you donÕt have the additional fees like superannuation and holiday leave and those sorts of things, paying tax on their wages, investing in their development. ItÕs a hell of a lot cheaper and probably more cost effective in the initial stages to have an external provider providing that service,” Kelly says.

He agrees that the most important role for a franchisor to fill when looking to grow the business is that of the operations manager. By looking after the field support, training and merchandising, the operations manager is providing the franchisee with the tools they need to run a successful business.

In his eyes, next in line for the franchisor is the product development team and then marketing. “ItÕs all about brand management. What is the brand? What does it stand for? How does it want to be positioned in the market? And once youÕve got a clear understanding for that and youÕve got your advertising sorted out, then you worry about PR and communications.”

Kelly says the number of roles that make up a franchiseÕs head office is directly related to how large the franchise is. ItÕs common for head office members to be responsible for a number of different areas of business at once, but this only works when their workload is manageable.

“It might be effective for one person to wear three hats in a small organisation. When they can’t do all three of those roles effectively then itÕs wasted and the tools that theyÕve said are available to franchisees canÕt be utilised because they donÕt have the time.”

ThatÕs a case of cutting off their nose to spite their face, he believes.

“A lot of people in small franchise organisations can get away with wearing two or three hats because they donÕt have the budget to have individuals in individual roles; it works very effectively, because they donÕt have the critical mass. But if youÕve got 20 franchisees and youÕre wearing three hats and then in the next 12 months that doubles to 40 franchisees, my estimate would be that you wonÕt be wearing those three hats for too much longer.”

While the franchisor needs to work out the cost versus efficiency equation as the business develops, potential franchisees can consider if the support offered matches the investment and ongoing fees. Franchisee support is a fundamental element of franchising and the level of back-up provided is a key consideration when researching a franchise purchase.