The business of learning: franchisor education

Few readers of this column will remember the 1991 report of the Franchising Task Force. It led to the introduction of the voluntary self-regulatory Franchising Code of Practice which two decades ago was seen as the most appropriate mechanism for regulating the franchising sector.

(Things of course did not work out as planned. The Franchising Code of Practice experiment was not successful. It was introduced in 1993 but lasted only until 1996 and was replaced by the current mandatory Franchising Code of Conduct in 1998).

More pertinent to this column which, at the editor's request, addresses franchisor education, is that the 1991 Task Force concluded that "some franchisors have entered franchising without an appropriate understanding of the basic elements and have failed to appreciate the level of commitment and responsibility to be provided to franchisees".

The Task Force noted that a recurring theme in the submissions made to it was the "significant weakness in the level of education and training of potential franchisors, franchisees, advisers and service providers".

What progress has been made over the last two decades? Substantial progress in my opinion.

The Franchising Code of Conduct is of course entitled to some of the credit as is the much greater awareness of franchising among all stakeholders, as franchising has developed into a significant economic sector which attracts sustained media interest. But franchise sector education has had a very significant role in raising standards. And that is a beautiful thing.

The Franchising Code of Conduct requires the franchisor's Disclosure Document to advise prospective franchisees to "consider educational courses". No regulatory document requires or advises prospective franchisors to consider or attend educational courses but there is today a wide if not universal recognition among franchisors that education is an essential element of best practice.

Franchisors and prospective franchisors, and their management teams, generally appreciate that responsible and successful franchising in a competitive and challenging market demands a suite of expertise and that education in all aspects of franchised business operation - managerial, financial, regulatory, operational - is necessary.

Educational resources

The Australian franchising sector is well served in the education space. Sector education is a priority of the FCA and its Franchise Academy is currently developing a new Accredited Franchise Executive program to supplement its Certificate and Diploma courses.

The sector's regulatory body, the ACCC, is active in sector education and franchising subjects are now taught in some, albeit regrettably few, universities. There is a growing library of franchising material and publications and a number of private providers of franchising related education.

Franchise systems are active in developing and rolling out their own educational initiatives for their staff and their franchisees.

As the reader, you may have noticed that your columnist, while proselytising the importance of franchisor education, has not ventured an opinion as to its meaning and purpose. Given that he is not only a career academic dedicated to educating university business students but the Governor of the FCA's Franchise Academy with the responsibility for developing franchise sector education initiatives, this may be regarded as a strange omission.

It's actually a very difficult and very interesting question on which there is a diversity of opinion.

How do we learn?

Over a century ago Bishop Creighton suggested that "The one real object of education is to leave a man in the condition of continually asking questions". The more recent comment of Ayn Rand may nevertheless be more realistic as a strategy for franchisor education in which there are fundamental principles which must be understood: the student must be "taught the essentials of the knowledge discovered in the past - and be equipped to acquire further knowledge by his own effort".

If we can develop franchisor education programs which provide franchisor personnel with the required knowledge to franchise effectively and responsibly while equipping them with the capacity, and the passion, for continuing inquiry and improvement we will have succeeded.

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