The recent passing of HRM Queen Elizabeth II and Operation London Bridge exhibited perhaps the greatest example of a well planned and executed franchise succession plan ever. But of course, no individual franchisee or franchise system will have similar resources, nor perhaps the time to dedicate to succession planning. However, every franchise business owner from the day they open their business needs to consider what will happen and plan towards the day they need to pass their crown and business on.
Every plan starts with a list. There are a number of points that need to be covered on both the “To Do” and “Not to Do” checklist for a Franchisee Succession Plan. These apply equally as to whether the succession plan is one of internal succession from a business owner to the next generation or an internal heir, or via the sale of the business.
The To Do list
Stick to the model and system – The more the individual business reflects the brand under which they are operating, the easier it will be for both an incoming management team and individual to operate. Additionally, the higher the quasi-value for the business will be as a “good example” of the brand.
Keep good records – It goes without saying that if the succession plan is to sell the franchise, it will need good accounting and financial records. Good record keeping: data management, extends into all areas of the business including internal processes, customer records, training … the list is long. In all areas it will add value to the business and or ensure it continues to operate smoothly.
Develop your team – Few franchise businesses are built around a single individual. Good business owners develop their team and ultimately work towards displacing themselves from the business.
Keep the franchise up to date – Which can range from ensuring marketing is current to, for bricks and mortar businesses, being up to date with maintenance and refurbishment requirements. It can also extend into product ranging and associated stock management, processes, and software platforms; The less work that needs to be done by a successor or new owner to bring the business up to currency, the better.
The Not To Do list
There are two key areas for franchisees that will really disrupt or derail a smooth transition or succession planning.
Diverting from the system – The further a franchise business moves from being an ideal example of the brand they carry, the greater the work involved to bring it back, and the greater the questions around value.
Expiry – In my view perhaps the greatest failure for succession is allowing agreements or contracts to lapse, whether it be leases, supply contracts or the franchise agreement itself. There is inherent value in these key components of the franchise business which are critical for business continuity.
Don’t leave it too late
Operation London Bridge was 60 years in the planning and refinement, started when HRM Queen Elizabeth II was barely 40 years of age. It does demonstrate that it’s never too early to start to plan.
And most importantly, don’t fail to plan for succession and miss the opportunity to take advantage of the benefits of developing and growing your own business.
Related: Resigned to working… for now
