Corven responds to PwC's 2011 Franchise Sector Indicator

We were grateful to recently receive PwC’s 2011 Franchise Sector Indicator Report in the mail... Thanks guys!

It’s another positive story, from both a qualitative and quantitative perspective, on growth and change within the Australian franchise sector. To celebrate, we have cherry picked a couple of insightful comments and findings to continue the discussion sparked by the Report.

We applaud another voice raising issues over the breadth and depth of training that franchisees receive, as ‘little training in the way of business management and leadership training currently occurs’ [page 7] and franchisors need to ‘...train and develop franchisees beyond the operational level’ [page 26]. Our own research points to a few reasons behind this current state of play:

• The pressure to have the new franchisee up-and-running operationally compromises the length and breadth of what is addressed during an induction program.
• Franchisors do not have the human resources to facilitate higher order competency skills, such as financial analysis and leadership.
• Franchisors determine the learning content of induction programs which inadvertently dumb down the experience by reducing it to core operations.  

PwC’s findings support our claim that franchisors need to shift their mindset from training, as the silver bullet, towards learning.

Training is a proven vehicle for developing core competencies – providing instruction, practice and feedback on knowledge and skill development for key standards and procedures. But it is only one piece of the learning puzzle.

Learning, on the other hand, is like a mini bar – there are many interesting and differing ways to create a cocktail of learning experiences, like formal vocational and tertiary qualifications; non-accredited training courses; formal and speed-dial mentoring; success circles; master classes; self-directed and experiential learning experiences. 

We were intrigued with ‘franchisors have indicated that they would like to see increased government support in ... funding for franchisee training’ [page 41] yet developing accredited educational qualifications as an initiative to attract prospective franchisees fell two points in 2011 to 6% [page 25]. Know this, the government isn’t going to hand over money for non-accredited qualifications, yet the Report tells us that franchisors want funds for training qualifications they are not really interested in.

Throwing free money at training in the hope it’s going to produce amazing franchisees is a reflection of the sector’s naivety on the role of training, learning and how the whole vocational education and training system operates.

Firstly, it is impossible for a training program to deliver all that a franchisee needs. Great franchisors bridge the gap by investing in robust induction programs and ongoing learning experiences that address business management, leadership and operational competencies as well as investing in experienced trainers to deliver it. Some franchise systems supplement franchisee learning with the support of external providers.

The Franchise Council of Australia was cited as one of the hundreds ‘training gap providers’. But how is the franchise sector engaging with these providers? Educational offerings need to be a thing of value. They need to deliver a return on investment as well as a return on expectation – that participants are somehow blown away by the learning experience with tangible, measurable action items for immediate implementation. Educational offerings need to challenge and stretch participants, drive best practice and continually aim to raise the bar of individual and organisational performance. As a result, certain programs and facilitators attract a ‘must attend!’ [or a ‘don’t bother!’] reputation in the sector.

Secondly, we have a complex and exhausting dual State and Federal system dedicated to vocational education and training funding, so it’s no wonder franchisors are asking for a simple cash handout. But what is not often understood is that the well of government funding for training drying up ... and fast. Funding is allocated to high-need vocations and individuals that policy makers want to re-engage back into the workforce. Funding was only ever allocated for employees and traineeship programs and is best suited to driving skill performance at a franchisee team level.

So, there is much work that needs to continue on educating franchisors and the sector on the role and importance of vocational education and training. Corven’s efforts will continue to escalate over the coming months with a focus on challenging franchisor’s on their mindset towards learning and guiding them on their educational policies, priorities and practices.

And finally,‘Franchising would be greatly benefited by shifting the sometimes pervasive conversation about risk, power and control to highlighting the success and growth of the sector as a significant contributor to the economy’ [page 16].

We agree, however franchise systems are inherently power-knowledge organisations – a Foucauldian concept where power is spread throughout the organisation, not residing in one individual or team where knowledge is embedded in the practices of the franchise. Franchise systems are power-knowledge organisations, where franchisees willingly submit themselves to the rules, procedures, audits and reviews of the system and franchisors submit themselves to conditions of the Franchising Code of Conduct and surveillance by the ACCC, the Australian franchise sector and broader community. Franchisees get miffed when the rules don’t work or no longer serve them. Same goes for when franchisors get cranky when they are judged by the terms and conditions of being a ‘good franchisor’.

We can’t escape risk, power and control in franchising, but we agree with PwC ... let’s start having the positive conversation about how it works and the national impact it has.

Raising awareness of the relevance, reputation and revenue-impact of franchising is a joint effort required by all sector stakeholders. We heed your call PwC and join the cause. We have the ability to do it. The question becomes, do we have the willingness to do it collectively or are we standing in our own way?