Training Equals Franchise Success

Trainers nationwide just got a new, albeit unlikely, hero. It's Steve Michael, a professor of business administration at the University of Illinois, Urbana-Champaign. In the process of pulling together data for an academic study into the causes of failure in franchised businesses, Michael cracked a particularly stubborn nut for the training community. He proved, in achingly dry academic detail, training's bottom-line worth.

His study, with the upbeat title, "Entrepreneurial Failure: The Case of Franchisees," concludes that training—not marketing, not sales, not operations—but training contributes more than any other factor to a franchisee's chances of success. Finally, we have hard data, real numbers crunched in academia, to illustrate how crucial training is to a company's bottom line.

Trainers have struggled with this issue for decades. Everybody knows it's vital to train employees, but until this study, it wasn't easy to prove just how vital. Training long has been seen as a feel-good profession dealing with warm and fuzzy intangibles such as learning and knowledge. But sales, marketing, operations—those types of bottom-line-oriented departments buoy the company up in the rough seas of competition and economic hard times. At least, that's been the general opinion out there—if not clearly stated, then implied.

Training departments have had to fight for their place in the corporate boardroom and budget. Even in economic booms, it has been difficult for trainers to squeeze enough blood from the corporate stone to implement the latest and greatest training technology, continuing education programs, or any other training initiative you could name. That's because there has been little solid data to prove the return on investment (ROI) for those initiatives. Corporate higher-ups want to see hard numbers that outline any expense's ROI, and it's difficult to quantify the value of learning and knowledge. Training, it seemed, didn't speak the language of the corporate boardroom.

Until now. You can't get much more solid than an academic study done by a professor at a large university.

It Started With Franchisees

Professor Michael, who admittedly doesn't know much about the training community, began the study last year. His focus was not on training but on the failure of businesses, particularly franchised restaurants—McDonald's, Applebee's, and Burger King, et al.

A quick word of explanation about the franchising world. It has two parts: the franchisor, which is the corporate office that governs the brand, and the franchisee, the person who buys the individual McDonald's restaurant on the corner and runs it. Michael focused on franchisees. Specifically, why they failed.

The restaurant business is notorious for its high failure rate, but not if that restaurant is a franchise. As a rule, franchises don't often fail. It has to do with consumer brand recognition, support from the franchisor, muscle in buying power when one is part of a large group of franchisees, national advertising that benefits local stores, and a host of other factors. Franchisors want their franchisees to succeed, so they work hard to make sure that happens. After all, when's the last time you saw a McDonald's close up shop?

But even with all of that franchisor muscle and power behind them, some franchisees do fail. "It happens," Michael says, "and I wanted to find out why."

So Michael and colleague James Combs from Florida State University started wading through the public records of some 90 franchises. "I began to see that the length of the franchisee's training program—what the individual goes through after purchasing a franchise—was tied directly to the success or failure of that franchise," he says. "It was a big surprise to me."

Michael found that the more robust and lengthy the training program for the franchisee, the more likely that franchisee was to succeed. On the other side of that same coin, he found that the franchises with the shortest franchisee training programs were the ones that typically failed.

Of the 90 franchises he researched, Michael cites two with the best training programs out there—McDonald's, a company that long has been at the forefront of excellence in training, and Dunkin' Donuts. Frank Servidio, director of field training for Dunkin' Donuts, says he wasn't aware of Michael's study as it sat in the halls of academia proclaiming his program one of the two best in the country, but he'll take the accolades just the same. "Dunkin' Donuts has always been committed to designing, delivering, and monitoring training programs that ultimately make a difference to each guest, our franchisees, their employees, and the brand as a whole," he says.

The Training Itself: Donut University

Servidio explains that Dunkin' Donuts' training blends online, classroom, and on-site work with follow-up, reinforcement, and franchisor support. It's extensive and multi-layered. First, franchisees attend an introductory course, which focuses on the business aspects of the brand, as well as the roles and responsibilities of both the franchisee and franchisor. This gives the franchisee the lay of the land, so to speak, and introduces him or her to key players at corporate. "This has proven to be a valuable opportunity for franchisees to learn from and build relationships with key individuals and teams," he says.

Franchisees then must complete 60 hours of online training in things such as basic product assembly, equipment maintenance, food safety, and shift management—courses franchisees can take on their own time. The online training is interspersed with a five-and-a-half-week instructor-led course and certification program. "Regardless of the medium, these courses are all designed to simulate restaurant experiences with a goal to jump start their on-the-job practice, which is done in-restaurant," Servidio explains. By the time the franchisees actually get into making donuts, they can hit the ground running. "Practice sessions are supported with skill checklists to monitor progress and review materials to refresh and recalibrate learning," he notes.

Prior to opening the restaurant, franchisees conduct training with their new staffs, supported by the regional market trainer or operations manager from Dunkin' corporate. The goal is to have everyone on the same page the moment those doors open.

After opening, the follow-up is extensive. Market and network trainers continue to deliver ongoing training, coaching, and support to the stores. Operations managers visit the sites often to evaluate how the restaurants are doing in terms of executing the brand standard. Based on those evaluations, market trainers design new training programs to address problem areas. And so it goes. The training never ends.

Aside from being cited in this study, Dunkin' measures the success of its training programs in various ways. Each of the training programs measures learning through performance, in other words, the franchisee's ability to perform the skill in the context of the restaurant operations.

"We also constantly seek feedback from our franchisees on our training programs and leverage their insight to continuously improve cost-effectiveness, time efficiency, and most of all, learning value," Servidio notes.

Why does Dunkin' Donuts focus so heavily on training? Servidio explains it's all about making the franchisee successful. "Training is the investment made on both the franchisor and franchisee side to support the brand," he says. "Our training program is deeply rooted in helping franchisees to be successful and profitable."

It's working, as proven by Michael's study. Train, and you will succeed.