What a Franchisor's FDD tells you about Its Company Culture

A company’s culture is a differentiator because it is something unique to the organization. When researching a brand to invest in, it is important to delve into the culture as it will give you an idea of what your relationship with the organization might look like.

The shared set of values and norms characterize a company’s culture. And this culture develops no matter what, be it positive or negative. Ensuring it is a positive and growth-oriented culture requires organizational intent and planning.

How a company can intentionally develop culture is by purposefully defining its mission and values. This sets expectations for everyone involved with the organization and provides a foundation for the brand. Companies with strong, positive cultures that are unified in a shared vision tend to achieve superior results.

One of the reasons Sport Clips Haircuts has been so successful is because it has intentionally built the company culture, beginning with the clear and concise mission statement of creating a “championship haircut experience for men and boys in an exciting sports environment.”

This values system is based on three simple principles, which were inspired by the same values Coach Lou Holtz used during his football coaching tenure. Defined as the Heart of a Champion, the values are simple: do what’s right, do your best, and treat others the way they want to be treated. These principles guide everyone at Sport Clips, from the team members at the support center to franchisees to stylists in the stores.

While mission statements and values will tell you the standard to which a franchisor will hold themselves and their franchisees, the Franchise Disclosure Document (FDD) holds some clues as to how the culture manifests itself. Item 20 in the FDD can give you a good picture of the brand “personality” and relationship with franchisees. You should look for consistent and positive growth for franchised outlets year over year.

It is also important to consider other points in Item 20. Take note of the number of franchise terminations. What is the growth strategy and how is it executed? What happens when a store opening is behind schedule? How is real estate selected? From there you can ask more informed questions about what to expect from the franchisor and vice versa.

A brand’s culture should be carefully examined when making the decision of buying a franchise. As you enter into a relationship with the franchisor, it is important to determine what can be expected of the relationship. Do the mission and values align with your goals? Do you see respect and mutual trust embodied in the values and actions? Above all, you should see transparency and a culture that fits with your personal mission and values system.

For more information on Sport Clips offering, click here.

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