Industry support ratio is inadequate By Adrian Caruso GUEST COMMENT | TRAVEL WEEKLY 7 March 2008

As a regular visitor to non-travel related fanchiser conferences, I hear a lot about their best practices on helping their franchisees become more profitable. One practice that is prominent at these conferences is the level of support they provide their franchisees and the number of franchisee business development executives (BDEs) or franchisee support staff each franchisor provides. On average each company provides one BDE for every 15 to 20 of their stores. A senior manager of one large franchise chain says the ratio is industry best practice.

Having worked with several major tarvel agency franchise chains here in Autralia and overseas, when chains have adopted this ratio of one BDE per 15 to 20 franchises, they have reported a dramatic increase in profits for both franchisors and franchisee.  

Yet look at the travel industry. Acording to the trade website franchisebusiness.com.au, on average the Jetset Travelworld Group provides one BDE for every 27 shops, Harvey World Travel provides one BDE for every 20 shops.

It is little wonder a recent survey we undertook with travel acency franchises revealed that many were not happy with the level of support they received from head office. Most were unsatisfied with the level of support, with some saying they saw their BDE once a year or that they provided no real business development skills to help them grow thier business. One said the frachisor's representative was only employed to ensure compliance witht branding standards, while another said that the state manager was there primarily just to give head office a presence.

The most common complaint was that the BDE knew little about the travel business. Many BDEs have never worked in a travel agency, or even a small business and most had never had business management training.     

There is no doubt in my mind that with many of the country's travel franchisors making multi-million dollar profits, they need to provide many more BDEs for their franchise network. Each franchisee with more support from their BDE will make more sales and profits. In return the franchisor will earn more from the royalites paid to them and offset the cost of the additional BDEs they provide their network.

With many travel agency owners changing camps in the last 12 months due to the lack of support, there is a belief that franchise chains or buying groups are heading in a different direction to franchisees' business. With new agency groups being established (including home-based models), the support they provide franchise owners and member agents will be a key to retaining exisitng shops and attracting new ones. One important factor to consider is how many shops will each BDE from that chain look after.

Don't get me wrong, many of the country's franchisors and their teams of BDEs are doing a fantastic job in providing their franchisees and members with support and business development strategies to further grow their franchises. But their members are crying out for more support and need it more than ever due tot eh constantly changing landscape of the industry and the increase in competition.    

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