Small Biz Franchise Blog » Franchisee Success

Franchisee Success – Could it be all in the numbers?

Lizette Pirtle — Mon, 25 Oct 2010 11:43:25 +0000

During my first experience working in a franchising company I heard the voiced and common belief that franchisees are happy as long as they are making money. Now, after over 20 years of working in the franchise field, I know that the truth in this statement is not absolute. Although I also have learned first hand that it always helps when franchisees are financially successful, but for most franchisees there is more to it than just ‘making money’.

I have found that franchisee success has to do a lot with the numbers, yet we must dig deeper. Non financial goals and objectives play an important role, although for some people more than for others. However, there is no question that the numbers are critical and how franchisors deal with them or ignore them can determine the success or failure of their franchisees.

Kate Groom is a franchise expert residing in Australia and her focus is franchisee financial performance. Kate assists franchisors have the much needed conversations around profit, performance, and results. I call these the ‘tough conversations’ because they involve topics outside of the comfort zone of franchisors and the franchisees.

“Most franchisors don’t have a financial background, and lack the experience talking about and managing this subject,” Kate said to me in a recent conversation. “The result of this lack of experience is that many franchisees don’t know where they are going nor do they know how to, or even when, they get there.”

I definitely agree with Kate. Franchisees need clear objectives and a way to measure their results. Kate mentioned: “These days technology has provided franchisors with a multitude of ways to gather, benchmark and report financial and operational information. Sadly, however, lots of people get caught up in the process of creating process; and, we make things complicated just because we can.” Kate continued; “It doesn’t have to be difficult.”

Franchisors like to tell their franchisees that they need to get back to basics. It seems to me that franchisors need to heed their own advice. As Kate says: “It’s easy to get caught up in the ‘wretched hows’ and forget that we can make a difference one conversation at a time, one franchisee at a time. Sometimes a good place to start is with what’s simple and easy to do with what’s available.”

Kate has lots of great information in her blog; make sure to visit it at http://www.starfishconsulting.com.au/

What’s the Makeup of a Franchisee?

Lizette Pirtle — Fri, 09 Jul 2010 21:16:04 +0000

Understanding the makeup of a franchisee is critical to your success as a franchisor. The first most important thing you must know about franchisees is that they are not like you; they are usually not true entrepreneurs. In fact, in general, true entrepreneurs do not make good franchisees because entrepreneurs are pathfinders and not good followers. Individuals chose to become franchisees to:

Reduce risk by investing in tested processes and models.
Have a clear path of action and direction provided to them.
Belong to an organization.
Be in business for themselves but not by themselves.

So what’s in their make up? Franchisees are people who:

Are normally risk averse,
Need and want direction,
Desire to belong to a team,
Wish to own a proven business, and
Seek to have more control over their destinies.

Does this sound like you? If you are a franchisor, probably not (except for the last point).

People who are considering franchising are searching for an organization to which they can belong; an organization that matches their own value system and that has an opportunity that matches their objectives. Although manifested and expressed differently, their needs normally fall in three categories: need for recognition, need for belonging to a family or team, and need for control of their work environment and decisions about their lives and businesses.

Individuals seeking to become franchisees are generally former middle or senior level employees used to a structured work environment, interpersonal interactions and recognition for their efforts. They are people in transition and as such they are subject to great internal upheaval. In many cases they are the middle-aged people who have been laid off, retrenched or down sized and their egos have been bruised. Fear of failure is a strong emotion in new franchisees.

People who choose franchising are looking for a lifestyle change. Lifestyle quality is measured in terms of: income and what it can buy, control and flexibility over one’s own time and the activities devoted to personal versus business as well as the sense of being your own boss. Franchise companies can foster a greater lifestyle quality by:

Setting structures that allow franchisees to clearly define and achieve their personal goals without impeding the reach of company goals.
Matching personal goals with territory size.
Providing guidelines, direction and leadership within an environment of trust, support and flexibility.

Understanding the makeup of a franchisee is crucial to your success as a franchisor. Don’t make the mistake that many make seeking people like them. Franchisees should never be like you, the franchisor; to be successful franchisees they must be different.

Are Your Franchisees More Interested In Being Right Than In Being Successful?

Lizette Pirtle — Mon, 19 Apr 2010 19:57:02 +0000

Why not both: successful and right? I don’t subscribe to “either/or” any longer; I now embrace the beauty of the AND which allows for possibilities to come into my life. However, when it comes to success and being right there is clearly an either/or. That is, being successful and being right do not mix, in the sense that those who seek to be right truly desire someone else to be wrong; and, in this scenario, there is no room for success. The need to be right becomes more powerful and it blinds us to possibilities, new perspectives and answers.

In my experience, many franchisees, especially at the beginning of their careers, are simply more interested on being right. They are not ready to accept that they may not know something or that which they are resisting is what may make the difference in their business. They also may feel so insecure in their new role that being right becomes more important.

Success is not about right or wrong. Success is about achieving what we desire and doing whatever it takes to get there. In most cases our success in new ventures calls for our transformation so we can achieve something different. Most successful people we admire had to undergo hardships before tasting success, and most of this adversity came from fighting their own personal dragons. This is always the same regardless of who you are. What’s different is how we react to the challenge.

When a franchisee is trying to prove that a portion of the franchise system or a procedure does not work, they are seeking to be right. The premise they use is not how a procedure or methodology can work, but why it does not work. At that point franchisees are more interested in being right than successful. The question is a challenging one and you will create unease when you ask it, but it is an important question: Do you want to be successful or do you want to be right?

The moment a franchisee realizes that they were seeking to be right, an opening is created. Even when they decide that at that moment they still just want to be right, the awareness created starts the process by which they shift towards success, personal growth and learning.

But the question is not just for your franchisees. Ask yourself the same question. Are you perhaps more interested in being right and don’t know it? If something is not working, what can you do to change it? Are you pointing the finger at your franchisees, the economy, or your franchise sales people? The question is as valid for you as it is for your franchisees. Success is all that really matters. Being right is irrelevant when you achieve success.

Do You Know Who Is Your Ideal Franchisee?

Lizette Pirtle — Sat, 10 Apr 2010 12:32:43 +0000

Most franchisors, if not all, have an idea of who they want to bring into their systems, what we call The Ideal Franchisee Profile. Many of them have written documents detailing the characteristics of this ideal individual. However, too many other franchisors don’t have enough clarity around this issue as to attract and accept the most suitable candidates for their opportunity. Bringing the wrong individual into the franchise system can be very costly for both the franchisee and the franchisor.

Creating the Ideal Franchisee Profile requires the franchisor to reflect about the company values, the beliefs it holds, its culture, and the traits and skills required of franchisees for the success of the business. It also calls for franchisors to be flexible and recognize that the profile will most likely need fine-tuning and modifications as the franchise organization changes and grows.

For example, new franchisors that don’t have an established and recognizable brand need and tend to attract more risk-taking franchise candidates when they first start to franchise. As the franchise system grows with increasing numbers of franchisees, the risk tends to decrease as the brand becomes stronger and the franchisor hopefully gets more financially stable.

An increasing number of franchisees usually leads to a higher name recognition making it easier for franchisees to market their business and get customers. Further, as the franchise company grows it will most likely develop stronger support systems that can result in higher success levels for some franchisees. Both of these factors lead to lowering the risk associated with the franchise opportunity. Therefore, it is appropriate to think that most franchisors will need to modify their Ideal Franchisee Profile at the point when these factors are achieved. Risk tolerant candidates will probably not make the most suitable franchisees under the new conditions and individuals with different characteristics may become better franchisee candidates.

15 Questions to contemplate and answer to create the Ideal Franchisee Profile include:

What is the company’s mission and how must it align with ideal franchisees?
What are the values ideal franchisees should have?
What kind of prior experience should they have?
What kind and level of education should they have?
Where do they want to open their franchises?
What reasons should they have to invest in the franchise? And, what reasons would make them undesirable candidates?
Would they want to be owner operators or investors who want to operate the franchise with an appointed manager?
Would they want to own one location, multiple locations, or either?
What type of management style should they have?
What is their ideal communication style?
What is their preferred work environment?
How resilient should they be?
What should be their preferred tasks?
What should be their abilities and skills?
What are the economic resources that they must have: net worth, liquid assets, and total investment parameters?

Make sure to write down your answers to these questions and use this criteria in evaluating each franchise candidate.

Franchisees: Are Your Fears Sabotaging Your Dreams?

Lizette Pirtle — Thu, 08 Apr 2010 21:33:13 +0000

Fear is an emotion fueled by our beliefs. Our fears incarcerate us and paralyze us. We are aware of some of our fears, but unfortunately too many others remain hidden in our unconscious often misguiding our lives in the direction opposite to our dreams. Our fears create traps along our path towards our dreams.

Trap #1 – If we don’t know where we are going, NO road will take us there.

If franchisees don’t know what they want their businesses to help them create, they will never be able to know whether or not they have achieved it. I have seen many franchisees who have truly arrived, yet are disappointed. They focus on the wrong results disregarding the ones that really matter to them. They may fret that they have not achieved the same level of income that they had before while forgetting the lifestyle they have achieved which was perhaps their number one objective. Clarifying our dreams and keeping engaged in them assures that the road of franchising will make them come true. Paradoxically, the fear of not getting what we want often prevents us from taking the time to clarify what it is we desire.

Trap #2 – What we think we want is not always what we really want.

Sometimes franchisees, like the rest of us, confuse what they think they want with what they really want. If we don’t take the time to connect with our real feelings we will tend to be influenced by what others think. Our well intentioned family, friends, colleagues and franchisor will share their perspective and biases; it is up to us to know what we really want so that our efforts won’t take us in a different direction. The fear of not being accepted is most commonly what leads us to this trap.

Trap #3 – Lack of clarity leads to hasty decisions which in most cases lead to disappointment.

This trap is crucial to keep in mind especially for those people contemplating investing in a franchise. We must be absolutely clear of what we want, only then will we have the patience to learn all that we need to find out to make the decision that will support our dream. Sometimes we are afraid to know; we fall in love with an idea and lose perspective. It is this fear that encourages hasty decisions.

What other traps do you think your fears lead you to?

Do You Understand the Development Stages Your Franchisees Go Through?

Lizette Pirtle — Mon, 15 Mar 2010 20:43:56 +0000

Understanding the developmental stages of your franchisees is critical for building communications and support infrastructures capable of producing successful relationships. Many franchisors see only two stages: new and older franchisees. They miss out important distinctions failing to address the needs of franchisees at their different stages of growth.

Franchisees go through 4 distinct developmental phases: infancy, adolescence, adulthood, and seniority. When franchisees first join your system they are like infants requiring a lot of support and training. During this early stage, they need to learn the rules of the game; and in franchising, these boundaries are the franchisor policies and procedures. They also learn the consequences to their choices. For example, if they don’t follow the system, they most likely won’t get the financial rewards they seek from their businesses; they may not get the customers they need or may lose the ones they got.

This is a difficult stage for franchisees because they are totally out of their comfort zone. They not only require knowledge and information; they need franchisors to understand and address their emotional states of mind and how these interfere with their learning and ability to implement. One of the most important elements that forms during this stage is TRUST. During this stage franchisees need consistency of message, they have a hard time dealing with paradoxes and concepts must be broken down into small pieces. During the early days, franchisees are usually more open to learn and appear to be more grateful and appreciative of what the franchisor offers.

After the first year, and in some cases just a few months, franchisees enter the adolescence stage. They get some of the basics of the business down, and begin to believe they know better than the franchisor. They thus start challenging the system in a behavior similar to that of teenagers. In my opinion this is the most difficult and most critical stage franchisees have to go through. They have mastered some parts of the business and fool themselves into thinking they know it all; they cheat themselves from learning all the intricacies of the franchise methodology. This is dangerous because it is at this point when franchisees start deviating from the proven system of the franchisor; deviation that often results in failure. Many franchisors focus most of their training and support effort during the infancy stage relaxing their standards after a few months. However, I believe that it is at the adolescence stage when coaching and training need to intensify. Franchisees must be helped to see that they really do not know everything; but yet, they must also be recognized for what they have mastered. It is a tricky balance. Open and honest communications is the only way to continue to build trust.

As franchisees carry on learning the business after a couple of years they reach their adulthood stage. Now they know how to communicate with the franchisor and how to be part of the team. They also have learned the business basics and have comprehended all the layers of understanding needed for the business to produce results. They also know the value the franchisor contributes to their success. During this stage franchisees seek recognition and inclusion. Franchisors who don’t attend to these needs fail to engage these franchisees and miss out on the contributions they can make to the franchise system. Moreover, if these needs are not met, franchisees may start to disengage from the team.

As time goes on, franchisees become senior members of the team ready and willing to contribute at all times. During this phase franchisees are not only important “validators” of the franchise opportunity, they have valuable experience to offer to the team. Yet, franchisees only get to be contributing and engaged senior members when the franchisor has in place the right communication and support systems to address the needs of franchisees at each of their developmental stages.

The success of the franchise relation is not all about the business concept and the information transferred to the franchisee. Instead, it calls for understanding and addressing the needs of franchisees at each of the different developmental stages.

Don’t Be Fooled, Your Franchise Won’t Bring You Happiness

Lizette Pirtle — Sat, 13 Mar 2010 14:51:28 +0000

A franchise opportunity does not create happiness. It can contribute to it, but it is not the real cause of the happiness we may or may not feel. What a franchisor does or fails to do has no more impact on our happiness than what we allow it to have. In the same token, our jobs or our bosses are not the cause of our misery or our joy. Happiness and misery spring from the same source: Our Mental Attitudes.

Our states of mind and the beliefs we hold guide our interpretations of the facts, of what is happening to us, of what we observe. Talking with franchisees in 2009 I heard those who thought it was the best year they’ve ever had, while others shared exactly the opposite. How can that be? Same concepts, same training, and in some cases the same cities, yet diametrically opposed results.

Yes, people who invest in a franchise may go through personal transformations that result in feeling more in control of their lives and destinies. They may finally be doing something more in line with their strengths bringing them closer to their purpose. All of these circumstances can get us closer to the joy within us which is always available to us when we are in the right frame of mind and decide to connect with it.

However, investing in a franchise because it will make us happy is a delusion. People who take this position are transferring the power they bestowed to the job that made them miserable to the franchise which is now supposed to make them happy. As Sylvia Boorstein says in her book by the same title: Happiness Is an Inside Job. It can’t be found in a job or in a business; it is always inside us.

Are You Listening or Merely Hearing What Franchisees and Prospects Are Telling You?

Lizette Pirtle — Tue, 09 Mar 2010 19:40:06 +0000

I recently attended a function where I met several people who had recently invested in a franchise. Hearing them express their happiness with their decision made me question how well I had been listening to franchisees in the past. One person in particular caught my attention as he shared with the group how happy he is to be away from his previous job. He said: “I hated that job. It was a terrible situation. I love what I do now.” In the past such a statement would have been an opportunity for me to rejoice with the franchisee; if he was happy, I was happy. However, I now hear these statements in a different light. I am driven to know more. Five questions come to mind:

Does this franchisee think that the business will bring him happiness?
What are the conditions that made him so miserable in his previous job?
Can the same or similar circumstances manifest in this business? How?
What is he running away from?
What is he running towards?

I think we tend to be too quick to grasp on to the misery a prospect shares with us as the “pain” that will get us closer to the sale of a franchise. We miss the point that if we don’t really learn more about this “pain” instead of just using it, it can show up again once the prospect signs up; and this time it can lead him or her straight to failure. We also seem to fail to see that if we don’t address these issues, they may interfere with the selling process and appear in the form of the fear that prevents a person to move forward.

Franchise recruiters and others executives involved in the franchise sales process must learn to really listen and ask the critical, even if sometimes difficult, questions right from the beginning. These issues must be further investigated when the franchisee joins the system whether or not they were asked during the sales process.

Success can only be achieved in a state of mind conducive to it. Coaching candidates and franchisees to gain awareness of these states is a must if we want them to succeed.

Are Performance Tools Important for Franchisee Success?

Lizette Pirtle — Mon, 08 Mar 2010 14:26:10 +0000

There are many products available in the market that claim to aid the performance of franchisees. I am constantly on the lookout for tools that can make a difference for my clients and their franchisees; and, I am always amazed at what technology is able to accomplish. Last week I went through a demo of the Open Box web-based solution Franchise Success and was literally blown away by the simplicity yet significant potential efficiencies and efficacies this software brings at franchisees’ and franchisor’s level. Although product reviews are not my normal topic of discussion in this blog, I feel compelled to share what I learned.

Open Box’s Franchise Success is a web-based software that has three distinctive and stand alone modules: Operations Manual, Marketing and Branding, and Automatic Accountability. The Operations Manual Module was the one to catch my attention when I first heard about Open Box. The thought of a world where franchisees couldn’t complain about not being able to find information in the manual was just enticing enough for me to take the next step and contact Open Box. Yet, I was not prepared to find the many benefits the modules offer. The ability to search the document is a great feature but it is almost dwarfed by the many others this product offers. In this post, I focus on the Operations Manual Module . I will cover the other two modules in the near future.

What it does:

It’s quite a simple application. It basically reformats your Operation Manuals into a fully indexed digital version which in layman terms it means a secure online web-based document that is fully searchable.

Bells, Whistles and Benefits :

The web-based version allows franchisees to make comments and asks questions. It’s like a blog that permits comments. Your manual is divided into sections and subsection, so each subsection will be what Open Box terms “an article” allowing franchisees to comment and ask questions. As I went through the demo I thought of the most effective ways of formatting information and how this new format provides a great opportunity for breaking down concepts and even creating short quizzes to aid understanding and retention. My head was spinning.
As the franchisor, you can decide to share the franchisee’s comments with others in the system, moderate comments before they are shared, or simply decide whether or not modifications to the content are needed. You are also able to answer questions franchisees have in a prompt and efficient manner. These questions are now compiled in one place and can help you improve your training programs or offer additional sessions.
I don’t know about you, but regardless of the number of times I proofed my manuals there were always typos for a new franchisee to find during initial training. I was always thankful for their input, but many times the corrections did not get made because during class my attention was on training and not on editing the manuals. This tool allows you to engage franchisees in helping you improve your manuals and make the necessary corrections easily and quickly.
Have you ever been afraid that someone is going to copy your manual and give it your competitor? Having a web-based manual will drastically reduce this possibility. A person that has that intention will have to print each and every section which will take time and effort.
Do you need to get a policy change out to the field quickly? Today you are probably placing the changes in your Intranet library, if you have one; if not, you are probably emailing these changes or mailing them to your franchisees. This tool allows you to distribute the changes immediately to all your franchisees with the click of a button. It also advises them via email that a change is waiting for them to be read and it sends reminders when they have ignored the first message.
How many franchisees are reading your policy changes? How do you know? Well, most of us don’t know. As franchisors we hope franchisees are engaged in their businesses enough that they want to read the changes we make to our processes; unfortunately this is not always the case. Yes, franchisees are supposed to read these changes but the truth is that the majority don’t. Today we don’t have a way to track who is actually reading these updates and who isn’t. However, this module does the tracking for you and provides a report you can use proactively to approach franchisees who are not reading them.
Are your manuals out of date? I know this is a big problem of many franchisors who justify their lax behavior by saying that franchisees don’t read it, so what’s the use? Well, your Operations Manuals are extensions of your franchise agreements and it is your responsibility as a franchisor to keep them up to date. The beauty of this solution is that updates are easy to do and to distribute. There is no more room for excuses as you can track who is and who isn’t reading them; and take necessary action to engage the franchisees who aren’t. It is my belief that this product will effortlessly create the discipline required to maintain the OPS Manual as the living, breathing document it must be.
Do you have portions of the manual that you want employees of your franchisees to read? What about a location manager? Doing this is easy as this product enables you to assign users and restrict certain portions to the appropriate users.
Do you have pre-training or pre-opening manuals and want your new franchisee to be exposed only to certain information before they attend training? A challenge for me has always been what I need to include in these initial manuals and how much of that information I need to repeat in the OPS Manual. Open Box makes it easy with the user restrictions and permission levels which allow you to do this in a snap. Assign the user only the sections you want them to read prior to training.
Is your franchise concept complex? Do you have a lot of information to convey to new franchisees? Well, this tool allows you to share the information bit by bit through the user restrictions; and you can create a step-by-step control training environment so you won’t overwhelm your new franchisees.
Other obvious benefits are the saving in printing costs as well as the staff time to print and put the manuals together and in some cases, the mailing costs. I remember spending many long nights at the copying room with the 2 other staff members the weekend before training started.

Can I say more? Are performance tools important in franchising? I think so. If our Operations Manuals record our business system and processes then this is module is a critical tool for franchisee success. I am sure that if I worked with this product I could find many other benefits but for now, I think this is a no brainer. I will be recommending this product to my clients not only for all the benefits listed above, but I would love to see them start with the infrastructure of the future which will put them light years ahead of the competition.

Stay tuned for my review of the other two modules coming soon!

For more information contact:

Ambrose Merrell, Director of Business Development ambrose@openboxinc.com 604-708-0116

*Disclaimer: At this time Open Box is not a client of mine and I am not a of theirs. I have not been compensated for this review in any way.

Dreams vs. Fantasies – Do They Make A Difference in Franchising?

Lizette Pirtle — Thu, 25 Feb 2010 15:45:53 +0000

The word “dream” for some of us brings up ideas of wasting time, of losers, of people who never act, and who we critically put down by calling them “dreamers” and expecting they will achieve nothing. This is a misconception; dreams are not fantasies. While fantasies belong only to the imagination, dreams are doable and achievable. In franchising, dreams can help determine success or failure. Yes, they are that important.

Dreams are also unlike goals. When we dream, we focus on what it is that we want and don’t concern ourselves with how we are going to get there. Dreams engage our right brain more than our linear left side. They incite our emotions which fuel our dreams or nightmares into fruition. Dreams are the first step in achieving anything in life. They are composed of the thoughts of what we want and without these thoughts and the emotions they bring up, what we want would simply not come to being.

There are dreams that support us and dreams that work against us. Worry is a form of dreaming that does not support us. Worry is our nightmare; it is composed of the things we do NOT want. While we worry we are thinking about what can go wrong; and, unfortunately, we tend to do this over and over and over, thus empowering the nightmare with every thought and the emotions they bring and allowing what we don’t want to manifest in our lives.

Dreams allow us to know where we are going. Earl Nightingale once said: “All you have to do is know where you’re going. They answers will come to you of their own accord.” Dreaming allows us to develop the scene of where we we want to be and it takes us there. If we worry that we don’t have the answers or that something may go wrong, we interfere with our dream and take away its power to take us there.

All franchisees had and have dreams; unfortunately they also have nightmares. One of the main keys to franchise success is to keep the attention on the dreams and away from the nightmares. How do you do that? It is actually simple , although not easy.

Take time to clearly define your dreams. The more time you spend in this exercise the better. If possible write them down or draw a picture or a symbol that represents your dream.
When the nightmares come, just shift the focus to the dream. This is why having a symbol or picture is so useful as we can immediately look at it and change our thoughts
Acknowledge the worry and be honest about it. Are you at that place where you want and need to be worried? Do you prefer darkness and gloom at this moment? It’s OK, these sometimes are stages we go through; however, know that as long as you are tied to your nightmares you won’t be able to get close to your dreams.
Keep reminding yourself of your dream every day. Franchisees who lose touch with their dreams will become disgruntled. Yet, in most cases, it has nothing to do with what may be happing at the moment other than the fact they are no longer engaged with their dreams.

Dreams, whether supportive or not, are catalysts. They inspire and motivate us into action. Ask yourself daily: What’s motivating me today? Is it my dream or my nightmare? Make the choice that works for you. It is really all about the choice.