What is the Corporate Culture of our Potential Franchise?

One of the most overlooked by critical evaluations a franchise candidate can do when evaluating a franchisor is to determine the franchisor’s corporate culture. The culture is dictated by how the CEO and leadership team both leads (or not) and relates to the franchisees. There are 5 distinct corporate cultures prevalent in franchising, each with predictable long term results. By identifying the culture now, you can know to expect in the future. The results and ultimate success of the franchise are directly proportionate to the style of leadership that is being employed.

Let’s examine the types of leader you may encounter:

•  Anarchy
•  Empowered Leadership
•  Management by Committee
•  Benevolent Dictator
•  Dictator without Benevolence

First we need to know the identifiers of each style. A sure sign of Anarchy will be chaos, and as a result in the future you can expect more chaos. The franchisor is Missing in action and therefore is not enforcing quality standards. Because the franchisor is doing very little to lead by example, the franchisee is left to create their own systems, processes, and quality control. Eventually the brand will be bastardized and destroyed.

Empowered Leadership has a completely different look and feel. Teamwork and community will lead to unity and continued growth. Empowered leaders will not make decisions based on ego and do not have the need to always be right. They understand their strengths and weaknesses and are willing to request help and support. Franchisees tend to view the franchisor as a partner rather than a boss or policeman. The franchisor relate to the franchisees as permanent stakeholders in the brand.

Management by Committee can be tricky to recognize at first. Often the leaders of this group appear to be empowered leaders on the surface, however if we look closer we will notice that they are in over their heads and are often more concerned about being appreciated and pleasing others than making the correct business decision. The franchisee or franchisor’s employee making the most noise at the moment is the one the leadership team responds to, and thus the latest squeakiest wheel is the true leader of the organization.

Charming, Charismatic, Authoritarian CEO’s often fall into the category of Benevolent Dictators. They are capable leaders with clear vision, great integrity and have the ability to kick start almost any venture. Benevolents have a downfall; they do not regularly surround themselves with other strong leaders because they do not like to be challenged. They prefer yes men that will aid them in getting their way. Therefore, the benevolent dictator usually has no workable succession plan. When the leader is incompacitated, the brand dies. No one person can replace the Benevolent Dictator. This style is very common in franchising.

Lastly, Dictators without the Benevolence are not hard to come by. These leaders lead with their ego and are afraid of losing control. They cause their team to perform by using scare tactics, intimidation and control. Employees are often robotic and live in fear of being fired. Franchisees are the enemy who must be controlled or destroyed.

All the cultures can respond to outside attacks by competition. Only the Empowered Leadership is positioned to survive an implode.

Once you determine the style of the franchise you can determine if it suits your personality and your goals or if a different culture would suit you better.