Franchisors and suppliers share their personal experience and best practices for franchise founders
It’s a unique position to create a brand from scratch, but to then decide to franchise… well now you’re responsible for running TWO businesses. It made me think what a unique position franchise founders find themselves in. I came across this piece, “103 Bits of Advice I Wish I Had Known“, and it made me think of the many conversations and educational sessions I’ve been a part of over the last 17 years in franchising. Then I thought about all the best practices that get shared between franchisors and suppliers and asked my network to share their advice for franchise founders. These are the top themes and advice that stood out:
Build strong foundations from the start.
First, it’s important to make sure the model works in multiple markets; that there is a proven economic model for you to bring others in and the financials make sense for both the franchisee and the franchisor.
Understand that your core responsibilities have changed. No longer are you running a restaurant (or whatever). Your primary responsibility is to make your franchisee community successful, whatever that takes. Do it right and everyone prospers.
– Bruce Holzman, Bruce Wayne Enterprises
Ensure you have a solid business model with good ROI before even considering franchising. 2-3 corporate stores in a variety of markets. Focus on culture and relationships from the jump. It’s what got us started and kept us going in the early years before there was money for a team. Be humble. Put personal needs aside and focus on meeting the needs of the brand.
– Jackie Bondanza, Hounds Town USA
Don’t wait to start a brand fund/ad fund/marketing fund. Set that expectation up front and also how it will be managed/that it’s not dollar in, dollar out, etc…
– Ashley Mitchell, Streamline Brands
Don’t rush to franchise. Make sure you have several successful units that are operated well. Be extremely selective in awarding franchises. Do not chase large development commitments. Do not sell master franchise rights. Do make sure you have your trademarks and IP protected.
– Jeremy Liebman, Krispy Kreme
Make sure the foundation of your brand is set. From purpose, to position, tone and voice. Get that set first, so you can go to market with a consistent message and voice from day one.
– Brooke Janousek, Fractional CMO
Be buttoned up on all potential legal issues and whoever is selling your brand is being rigorous around following all the specific rules around claims and disclosures
– Lauren Raouf, Metric Collective
Building a strong plan for the brand starts with the FDD and Operations Manuals. It’s an expensive process, so work with professionals to make sure it’s done right.
Choose the RIGHT people.
We can’t be great at everything, and most people don’t enjoy all aspects of running and growing our businesses. Finding people that can help you be better or faster at reaching your goals. Investing in talent is crucial.
When you DO hire someone because you value their experience in franchising, don’t ignore their advice! Too often I hear from people who have been brought in to new brands for their experience and insight, but then get resistance to every idea and change they propose.
I have also heard from multiple founders that they’ve gone down the path with the wrong supplier partners, resulting in wasted time and money. Vet ALL partners you’re considering working with. Are they members of the International Franchise Association (which shows their commitment to the franchise sector as well as education and networking)? Have you talked to other franchises they have worked with and heard great things? Do you have other vendor partners you work with that you can ask for recommendations or opinions before you signing on?
Never be the “smartest person in the room” founder. Bring in fractional experts or industry leaders that challenge you to see past your own business so you can grow.
– Megan Allen, FranPromise
Find someone that has franchise experience. Managing franchise relations can be complex. You want to design the model with the end in mind. Co-prosperity is the key to franchising success.
– Dorian Cunion, Your Path Consulting & Coaching
When using outside Franchise Consultants, make sure you find people that align with your process and culture to bring you the right matches.
– Nancy Friedman, Telephone Doctor
It’s all about the TEAM you build around you. Share the mission and vision you established but don’t hire a bunch of yes folks. Be prepared to let go (probably the hardest step). Trust those you put in place to help you lead. If you can’t, keep looking. Don’t settle and don’t chase the Unicorns.
– David Ohl, ACE Handyman Services
Find a network of peers.
Connect with founders that are further along in their franchise journey to hear best practices, and more importantly, learn from their mistakes.
Seek counsel from other founders who are further along in their journey. Ask them what they wish they knew, what they wish they had done, what advice they are happy they listened to, and what advice they are glad they ignored.
– Brooke Janousek, Fractional CMO
I always recommend new franchisors pick up Shelly Sun’s Grow Smart, Risk Less where she shares her journey, mistakes, and how she scaled her team to support a growing brand. Find a mentor who was a founder or came from a micro-emerging concept and is focused on helping micro-emerging concepts.
– Chris Raimo, Happy Cat Hotel
Attend franchise events like Springboard and the annual IFA Convention and make connections you can continue to call or meet with all year long.
Franchising is ALL about relationships.
One of the most important relationships to understand is between the franchisor and the franchisees. Unlike employees, who you can direct to do something or request they make changes—and they do it because you told them to—franchisees need more than just a directive. So be picky who you bring into the brand, ESPECIALLY in the beginning. Every panel at every franchising conference has someone talking about time spent fighting franchisees that aren’t aligned, or trying to get them out of the system. Having the wrong people isn’t worth the shiny franchise fee that seems more important in those early days.
Don’t award franchises just because they have a pulse! Be thoughtful and award wisely from the get-go. It’s YOUR brand!
– Colleen Upham, ohDEER!
Your franchisees must like and trust you to influence change and encourage accountability. Most important from the start is identifying those relationships you should have to begin with by awarding franchises versus selling them.
– Tami Burdick, TB Business Consulting & Training
The focus has to be on people. Both the corporate folks, and the franchisees. Talent is what makes the business model thrive or not. Avoid the initial temptation to quickly grow that blinds many newer franchises. Identify the specific skills necessary to thrive in your business, and do not sell franchises to anyone that doesn’t have them. It sounds simple, but many new franchisors end up needing franchise fees to stay alive in their early growth cycle. This makes them overlook potential shortcomings in candidates, because they just want to close a deal. This can cause unnecessary turnover, and taint the brand’s local image which, along with unrealized market potential, will slow growth prospects for the broader organization. The most successful franchise organizations have a laser focus on attracting key talent and developing available markets, but they do so very judiciously. Don’t compromise on talent, and be very honest with yourself about your assessment of a candidate’s skill sets.
– Dan Brunell, Spherion
Get continuous feedback.
Remember to get feedback from your team and franchisees along the journey. Franchise Business Review can help collect franchisee and employee feedback and give you context around how you compare to the industry benchmarks. As a founder, you may not be ready. If you’re not big enough to work with FBR (10+ franchisees open and operating or 10+ employees on staff), start asking the questions internally or informally. It can be nerve-wracking for founders to have a third party ask questions about satisfaction with training, support, leadership, communication, etc. It’s your brand, of course it’s personal. But it’s the right thing to do to make sure everyone is aligned to grow a successful system where everyone prospers. So if you’re not ready for a third party, we’re happy to share our standard questions with you if you reach out.
One of our favorite people in franchising, Madeleine Park of Netsertive (also a franchisee), summed it up perfectly, “Culture is important from the start. Bring on the right people, believe in your mission, listen and most importantly, have fun!”
Hopefully this advice will get you started on the right path. If you make sure your model works for both the franchisor and franchisee by creating strong relationships and unit economics, you will be well on your way. The most remarkable part of being in franchising is that everyone is cheering you on. We are all committed to raising awareness of how franchising can be a great opportunity for success.
Want more now? Check out our CEO’s Guide to Creating & Maintaining a Positive Culture. And make sure to let us know if you have other advice for franchise founders!
The CEO’s Guide to Creating and Maintaining a Positive Culture in Franchising
Despite its critical importance, culture is frequently overlooked by leadership. This eBook provides practical advice for franchise leadership teams for creating and maintaining a culture that leads to greater productivity and profitability.