Does using a franchise jeopardise quality in property management?

You might be justified in asking whether running a business as a franchise results in less than equal levels of service as if the same business were not a franchise.

The quality of short letting management has a direct impact on guest ratings, reviews, occupancy rates and revenue generated/profitability. A single incident of poor service has the potential to impact long-term performance and revenue. That is why this question deserves a frank and honest answer.

Here is the truth: whether or not an operation is run as a franchise does not impact the level of service provided by the operation but instead the governance structure using a franchise system does.

A difference in service can exist when a business is being operated by a franchisee if the franchise does not have a defined standard of service. That is true for any property management company, franchise or not.

Property management relies on:

• Professional cleaning
• Timely communications with guest
• Fast problem resolution
• Accurate and transparent pricing
• Continuous performance monitoring

Without a detailed governance structure in place with well-defined processes, it is easy for standards to slip, whether a business is one-man operated, corporate or franchised.

The question, therefore, is not “are they a franchise?” but rather “what methods are used to protect the quality of service being provided?”

Great standards are built on three foundations:

1. Defined procedures for all operational systems.
2. Defined metrics to measure operational performance.
3. Accountability to those defined procedures and metrics.

Once these are in place, consistency will result. Consistency is not guaranteed without these three components. When they aren’t in place, quality can suffer in any business model.

Each Pass the Keys location is owned and managed by a local business owner. That ensures the property will be managed by someone local and accountable, rather than a rotating employee or a remote call centre. Because it is managed by someone whose name and reputation are attached to the business.

Local ownership creates an immediate level of accountability.

However, accountability alone does not provide the needed level of assurance for the Pass the Keys network of partners.

Every Pass the Keys partner operates under the following:

• National standards
• Standard operating procedures
• Approved supplier frameworks
• Centralised technology
• Defined service-level benchmarks
• Ongoing quality monitoring
  

To ensure the network-wide consistency, established through local ownership and national oversight, the following are measured regularly for all locations:

• Guest satisfaction scores
• Review feedback
• Response times
• Cleaning performance
• Operational KPIs
  

The combination of local ownership and national oversight provides consistency across the entire Pass the Keys network.

Properties in the majority of large corporate players are typically managed by employees. In contrast to that, properties in Pass the Keys locations are managed by local partners who have extensive proven business experience and success in the local community. They are supported by centralised governance: systems and processes, technology, reporting and performance measures.

This organisation structure creates:

• Personal commitment to each and every property
• Consistent quality assurance process
• Excellent review scores
• Clear accountability for meeting or exceeding standards
• A long-term commitment to continually improve the overall quality of our properties and raising the bar for standards
  

Pass the Keys does not just manage properties, rather, we accept accountability for our properties, their performance and their standards.

For a franchise business model to be successful there must be:

• Clear standardised expectations.
• Recognition and accountability in performance and operations.
• A central governing body that holds everyone accountable.
• Data collected in cooperation with review of franchise performance.

These all relate to issues with governing as opposed to structuring of the franchise system.

A well structured franchise organisation with strong processes will give you the best chance of providing a consistent service while still providing a level of individual service.

Does using a franchise jeopardise quality?

So to sum it up, if you utilise a franchise system that has strong governance, utilise professional systems and measures to monitor performance you will not sacrifice quality.

At Pass the Keys, our philosophy is:

Higher quality = higher value (through positive customer feedback)

Higher value = more bookings

More bookings = higher income (for the host) over time

This is the key to what we do.

If you’d like to learn more about how we can help ensure quality across our entire network of franchisees, then check out our service standards or talk with your local Pass the Keys partner for bespoke advice.