A client recently asked me about communicating price recommendations to franchisees. It seems like a simple question, but the answer may seem more complicated than you’d expect. Here’s my advice: Don’t just hand out a list of price recommendations. Add a clear and concise explanation about how the recommendations were developed so that they will have maximum effect. Your franchisees or managers will appreciate the extra information and the prices will be more credible.

What Are You Communicating?

It’s more than just a price list, so consider what additional information can be incorporated:

• Do you use multiple price structures? You may want to share all structures with the group and explain why some tiers are higher or lower than others. You don’t have to share this, but recipients may take this liberty. So being proactive may help.

• What’s behind the numbers? Explain the process your team used to develop recommended prices so you aren’t handing down mystical information. Share the supporting data used and highlight the analysis performed to convey the due diligence behind the prices. If there are any critical pieces of information about competitive or consumer behavior, explain what’s important to keep in mind as your franchisees or managers use the information.

• Are there any implementation tips to discuss? Is it clear when prices should become effective, who franchisees can contact with questions and where to obtain further information?

How Are You Communicating Prices?

How should you distribute information? Is a simple handout adequate? Can you post the information on an intranet or in another digital format? Does your audience have the software needed to open documents?

When Are You Communicating Prices?

Price recommendations are most often announced at franchisee meetings to an audience so intent on this information that they can tune out all other stimuli once the all-important list is handed out. To avoid this, here are some suggestions:

• Provide explanation in advance of providing a list—all facts, figures and background should be given before handing out a price list.

• Don’t make pricing discussions infrequent, mysterious events that create the feeling of secrecy. If pricing is an ongoing discussion, the impact of price recommendations will be less of a surprise and more of an everyday topic.

Can You Add Value to Price Communications? 

If you think beyond just the price list, there may be information you can add to the suggested retail price list that will help your team, such as how to communicate to customers, how to prepare crew members for customer feedback, or coaching for store managers to understand what’s important about new prices.

Recommendations vs. Decisions

Keep in mind that a franchised system operates differently than a company-owned system. Be sure you communicate to any franchisees that pricing decisions are theirs to make, and that franchisor recommendations are based on the best thinking and analysis available to assist in their decisions.