Question

Case Study:

A franchisor in the hair cutting industry wanted to improve the selection process of prospective franchisees, area directors and store managers. They wanted to discern sooner in the interview process which applicants were ideal for their prospective positions. Franchisees were suffering an average annual employee turnover of approximately 200%. Many existing franchisees did not have the right personality for their positions.

They first benchmarked the behavioral requirements of three positions: area director, franchisee and store manager. As a part of this process they also surveyed the personalities of all of their existing area directors and franchisees. The points were used as part of the benchmarking process and were later utilized for the purposes of training and leadership development. These franchisees were trained using the Accord 5 Tier Performance Pyramid and its cognitive approach. Through this approach, their “B players” were able to become “A players,” their “C players” became “B players” and many of their “D players” were able to develop greater levels of success as well. They are now in the process of utilizing similar technologies to select stylists.

They found that area directors with the right personality were able to perform at higher levels and grow their territories at a faster pace. The right area director was able to effectively manage a larger organization, have a greater impact on their franchisees and generated greater revenues because of the impact they displayed. 

They found that franchisees with the right personality are able to reach profitability 33% quicker than those without the right personality. They were also able to grow and maintain their operations. They had significantly lower employee turnover, were more proactive and in general were lower maintenance franchisees. 

They found that by “Getting the People Side of their Business Right” they were able to meet their tactical short term goals while maintaining their strategic vision.

Cost of two-year implementation was approximately $45,000. The franchisor was able to add seven area directors, grow their organization from 350 to 500 locations and set the stage for more profitable growth.

Questions              

                                                                     

Help hair salon make a decision by outlining the Five (5) advantages and Five (5) disadvantages of a staff positioning.   

Assuming that hair salon has adequate capital, would you recommend that he invest in the franchise or open his own shop and why?          

Entrepreneurial research hair salon needed to find out his training and leadership development? Explain Five (5) market research steps.

Answer 1

The advantages are:
1) Better control over the organization as they grow in size
2) More organized and functionally focused leadership since one leader doesn't have to be present everywhere
3) Better check on the quality of service since there are multiple levels of scrutiny possible
4) Smaller teams under one leader helps improve teamwork and reduce distance between employees and reporting manager
5) Easier to find out problems in a specific function and take steps more specific to the problem

The disadvantages are:
1) The flexibility of the system is reduced and it becomes difficult to change the process to suit the immediate requirement
2) The time taken to implement anything new is more since it requires multilevel permissions
3) Communication of problem is slow and often misinterpreted by the time the leaders at the top gets to know them
4) Training cost increases since variety of training programs are required for staffs at different positions
5) A hierarchical system increases competition within functions which can be detrimental

The hair saloon shouldn't open his own shop right away because the shop being a part of the franchise has set a certain level of expertise with the customers and if they are not able to retain the employees who have recently been trained it might dilute the quality of the service.
The strategy to open his own shop will be to first retain the employees and make the customers trust him and not the brand he is associated with.

The 5 market survey steps are:
1) Defining the objective of the survey, developing the hypothesis the shop wants to test.
2) Choosing a test segment and devising the survey plan
3) Conduct the survey and collect the required data
4) Analyse the data and find the results
5) Take appropriate action to solve the problem as identified from the analysis