Gratitude is a positive emotion and a way of looking at the world that engenders a sense of well being. Studies have suggested that grateful people are happier, less stressed, and more satisfied with their lives and relationships. They are able to cope with difficulties in a more positive way, hence experience a sense of more control over their lives. So, what does all of this have to do with franchising? A lot!

Gratitude is a choice. We either choose to complain about what we have or don’t have or choose to see the beauty in what we do have and the blessings that come when something is not be present in our lives. It is in that choice that we find the control over our environment. We all have heard the adage that says: “we may not be able to control our circumstances, but we can control how we feel about and react to them.” So, what does all of this have to do with franchising? A lot!

Gratitude is a habit that we create by repeating our choice for the positive frequently. The more often we make this choice, the more ingrained this habit will be. So, what does all of this have to do with franchising? A lot!

If you are a franchisor, you can’t change the way franchisees behave, but you can certainly choose how you will react. Similarly, franchisees have no control over their franchisors’ actions, but they surely can choose whether or not they affect them negatively. It is all about what we choose to see. When either party is upset at the other they have the choice to remain dwelling in the negatives which only creates more discord, or choose to be grateful for the positives such as:

If you are the franchisee:

• The franchisor started a business, took the risk, and created systems.
• The franchisor shares his or her experience with me so I don’t have to make the same mistakes.
• The franchisor is thinking of ways for me to improve my bottom line.
• The franchisor has trained me and continues to train me.
• The franchisor invests in staff to support me.
• The franchisor spends a lot of money in R & D to ensure that my business has a future.

If you are the franchisor:

• Franchisees believed in my concept and in me.
• Franchisees trusted me and invested their life savings in my business idea.
• Franchisees paid me and continue to pay me money.
• Franchisees represent me every single day in their communities.
• Franchisees have stepped out of their comfort zone to implement my system.
• Franchisees share their ideas with me and they also help each other.

Did you hear a ‘but’ as you read the statements above? If so, you need a little bit of work on being truly grateful. Gratitude is all about shifting our perspective. It is not about denying the negative; it is about focusing on the positive that is always there, regardless of the situation or person. So, what does all of this have to do with franchising?

• Grateful franchisees are happier, better performers and validators.
• Grateful franchisors create a productive company culture.
• Gratefulness engenders good franchise relations.
• Gratefulness is contagious.
• Gratefulness produces a positive environment that invites communication.

Gratitude is not just for those ‘tree hugging’ folks, as some may say.  It is for all smart franchisors and franchisees who want success.

So, when was the last time you said ‘thank you’ to your franchisees or to your franchisor?

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3. Franchisees, Franchisors: Do You Need a Surety Bond?

In more than one occasion I have been called a Franchisee Advocate; and although this may not have been said as a compliment, I have taken it as such. I fought for their rights and what I thought franchisors owed to them, and this got me in trouble more than once. Today my approach is much more balanced but my strong feelings for franchisees remain the same.

I was first exposed to franchisees in 1986 and since then I have trained and supported thousands of them. I have always dealt with franchisees who are owner-operators, running their own businesses. And, I have found these franchisees to be very special people, totally different from employees and from true entrepreneurs, or investors. Of course, franchisees are unique individuals but, in my experience, they share many characteristics with each other. I can’t say that all my interactions with them have been 100 percent pleasant, but from the very beginning I simply loved them and here is why:

• Franchisees are courageous. They leave the known for the promise of a better future, yet they do it with care and choose a less risky road.
• Franchisees have taught me much of what I know today about franchising, and a lot about life and human relations. My toughest interactions with franchisees always left me with more skills, more knowledge and more understanding.
• Franchisees are compassionate.  Franchisees have shown me unique compassion when I have needed it the most. I treasure those memories.
• Franchisees can connect in deep ways. Perhaps it is the fact that franchisees have to go through personal transformation which places them at an emotional state that gives them a unique ability for deep personal connections. Whatever the cause, franchisees can connect deeply with and care about their clients, their franchisor and other franchisees.
• Franchisees are humble enough to know they need help. This is not always the case nor does it sustain, but at least when they first join the franchise system they know they need to learn a new way. They are not always able to do it, but most of them try.

I guess most people are capable of showing the above characteristics but as a group, franchisees are uniquely strong in all them. So, from the very beginning, they made their way into my heart.

What do you love about franchisees?

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1. 3 Things Your Franchisees Expect From You
2. Franchising: a Love Affair by Lizette Pirtle
3. Are Your Franchisees More Interested In Being Right Than In Being Successful?

When people invest in a franchise their lives change drastically. They go through tremendous emotional upheaval which has a direct effect on their family. The family normally does not make the investment choice for the franchisee. They may be involved in the decision making process but the final decision is usually made by one or two people. Yet, the consequences of this decision are felt by all family members.

When the results are positive, everyone is happy but when challenges come up, everyone is affected as well. Families can and do help franchisees succeed, but they also can hinder their success. As a franchisor you may think the family of the franchisee is none of your business. I invite you to think again.

• Are all family members supportive?

If families are not supportive of the franchisees’ decision, they will make it hell for the franchisees when the business affects their lives negatively. Further, family members who were initially supportive of the decision may withdraw their support when their lives are affected. If the business does not provide the same level of income, free time, or status that the family previously enjoyed, franchisees will get an earful of complaints. In most cases, this lack of support and negative input makes it more difficult for franchisees to continue putting forth the effort the business requires.

• Are family relationships strained and filled with conflict?

Starting a business is difficult enough in the best of circumstances. However, when franchisees have to deal with conflicted relationships their attention and focus can’t be where is needed the most. Energy that should be going to the business gets diverted to handling the emotionally draining relationships leading to poor results in the business.

• Do family members feel abandoned?

Starting a business requires time; and, the stress created by the fear of failure can lead franchisees to spend more time and energy in the business than it’s actually required.  When the attention of franchisees is solely on the business, family members may feel abandoned and will resent the business.

• Are the changes the franchisee is going through too drastic for the family to accept?

A new business means a new life and with it come transformation. Franchisees must change and adapt to their new circumstances. Some of these changes may be too much for some family members. This non-acceptance of the “new” person results in conflict.

As a franchisor you need to help your franchisee identify and deal with these challenges. Encourage your franchisees to:

• Communicate with all family members often and deeply about the business and their feelings about what they are going through.
• Ask family members for their support, help and understanding.
• Don’t take the support of family members for granted. Be grateful!
• Share with family members; talk about the challenges and get them engaged; they may come up with good ideas.
• Manage their time and make sure there is always quality time for the family.

I know, this is easier said than done. But if your franchisees do not take care of their family’s emotional well-being they will not be able to take care of the business. You, as the franchisor, can and should also pay more attention to the family of your franchisees.

• During your annual conferences or meeting, plan activities for the spouses and for the kids.
• Choose kid friendly dates and family friendly locations for your meetings.
• Don’t charge a registration fee for kids and only charge a food fee for spouses attending meetings.
• Negotiate discounts with vendors to encourage family participation in meetings.
• Get to know your franchisees’ families. Make the time and effort to introduce yourself to them and get to know their names.
• Celebrate the family accomplishments: births, graduations, weddings, etc.

Supportive, loving families are behind every successful franchisee.  Franchisor can foster good family relations; all it takes is awareness of the issues and effort.

What do you think? Do you agree?

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“A university professor went to visit a famous Zen master. While the master quietly served tea, the professor talked about Zen. The master poured the visitor’s cup to the brim, and then kept pouring. The professor watched the overflowing cup until he could no longer restrain himself. “It’s overfull! No more will go in!” the professor blurted. “You are like this cup,” the master replied, “How can I show you Zen unless you first empty your cup?”

We are so eager to teach our franchisees all we believe they need to know to successfully run the franchise business that we rarely consider that their minds may be like the cup in the previous story: already filled. So, we keep pouring information into the franchisee’s mind not realizing that nothing we are sharing with them is going in.

It is critical we help franchisees adopt a Beginner’s Mind as they start their training on your franchise opportunity (to borrow another Zen concept). It’s only from this mental position that true learning can take place. A Beginner’s Mind is an empty mind, one that allows new concepts to come in.

For example, if we have never seen or heard about a bicycle and are being trained to ride one, our minds would be empty of pre-conceptions and we would be able to truly listen to any instructions given to us. Our minds would be teeming with questions and requests such as: “What is this? What do I do with it? How do I do it? Show me. Help me.” However, if we are familiar with the concept of bicycles, even if we haven’t ridden one in years, most likely we would attempt to get on the bike right away and try it on our own. The questions of the Beginner’s Mind would leave us replaced with statements such as: “I hope I don’t fall; this bike is not as good as the one I used to ride; and so on.” In other words, fear and judgment take the place of curiosity.

The facts are simple:

• We cannot learn anything if we think we already know it.
• Our preconceived ideas and judgments influence our understanding of the new, preventing us from true learning.
• If we are always thinking about how we can do it better, we can’t possibly learn the way it is being taught; which is the new way and could be much better.

Because new franchisees go through massive change when they first join a franchise system, they feel vulnerable and their tendency is to seek safety in what they already know. This natural response to the emotional upheaval they experience challenges true learning.

It’s important you help your franchisees deal with these emotional states; help them empty their cup before trying to pour in more information; help them embrace a Beginner’s Mind. Ask yourself: “Are my franchisees ready and able to absorb the information they need to learn?” and “How can I help them create the mindset that will allow learning to take place?”

If you want to learn more about what makes franchisees successful, keep reading this blog, you’ll be able to find similar posts under the Franchisees tab. Also, consider reading my book Franchise Succcess: The New Formula.

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However, their gifts don’t stop at just their decision to invest in the newly formed franchise; other significant contributions early adopters tend to make include:

• Providing you with tremendously valuable experience as you learn to be a franchisor and giving you the opportunity to refine your business.
• Having higher emotional commitment to the franchise concept.
• Exhibiting a stronger desire to contribute and to be involved in helping other franchisees be successful.
• Being the best spoke people for the organization.
• Showing a need for newer and better ways, demanding innovation and providing important feedback to you.

Early Adopters indeed have a lot to offer you and your company. However, they also get many unique benefits. These include:

• Paying less for the franchise since franchise fees tend to go up as the number of franchisees increases.
• Choice of territory, and sometimes even a larger territory than future franchisees.
• Complete individual support that can’t be provided as the system grows.
• Personal interaction with the founder and senior management that is unlikely to be available to the same extent to future franchisees.
• Recognition for their contributions and greater opportunities for involvement.

The benefits Early Adopters receive have to be commensurable with the gifts they provide you; otherwise the relationship will suffer.

Early Adopters usually have the following traits and characteristics in greater degree than future franchisees. They tend to:

• Be more entrepreneurial and visionary
• Take more risks
• Have stronger personality
• Be more assertive, independent and outspoken
• Seek higher levels recognition
• Demand innovation

Although these traits make Early Adopters great partners, they may become a real issue for you as your company grows unless you set some initial boundaries. Make sure you recognize the contributions of Early Adopters. Don’t take them for granted. This is true for all franchisees, of course, but critical for Early Adopters. Keep them as your advisors but set yourself as the leader otherwise you will not be able to manage the relationship.

As a senior manager of many franchise organizations I thoroughly enjoyed working with the Early Adopters. Their enthusiasm was contagious and their loyalty was unequal. These great attributes also made them powerful influences with the rest of the franchisees, so making sure they were content was a vital aspect of managing the relationship. Frequent communications were always a must.

What are your experiences with Early Adopters?

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3. Zors, Zees and other Franchising Lingo

Franchising isn’t an industry; it’s a community made up of many businesses in different industries choosing a common method of distribution for expansion.  As a community, franchising has its own terminology and thus new franchisees and franchisors have to learn the meaning of these terms in addition to the language of the particular industry of the business. Franchising vernacular can add to the confusion of those people considering joining the franchise community as franchisors, franchisees or even as suppliers.

To help newcomers I’ll share here the meaning of some of the most common terms and acronyms used in franchising. These are short definitions; later posts will take a few of these terms at a time and expand on them.

Zor(s) = Franchisor(s)

A Zor is the business that has chosen to expand via franchising; it means the franchisor; that is, the company that has created this unique opportunity. The word “franchisor” is sometimes spelled “franchiser” following the British spelling.

Zee(s) = Franchisee (s)

Zees are the people who choose to invest in a franchise to become business owners. They enter a business relationship with a franchising company that entitles them to use the intellectual property of the franchisor for the term of the agreement in exchange for their investment.

FDD

FDD is an acronym for Franchise Disclosure Document. It’s the legal document required by the FTC (Federal Trade Commission) of every franchise company. Its objective is to provide potential franchisees with sufficient data about the company and the opportunity to enable them to make an informed decision. Each portion of the FDD that speaks to a different aspect of the opportunity is called an Item.

Most commonly discussed items are:

Item 5 = Initial Franchise Fee

Item 7 = Initial Investment

Item 12 = Territory

Item 19 = Earnings claims

UFOC (Uniform Franchise Offering Circular)

UFOC is an acronym for Uniform Franchise Offering Circular. It is simply the predecessor of the FDD and is no longer in use.

Franchise Agreement

The franchise agreement is the foundation document of the franchise relationship. It’s legally binding on both parties, and it describes the rights and obligations of franchisor and of the franchisee.

Territory

Territory is the area which franchisors assign to franchisees and within which they grant the right to franchisees to operate and market the business. Territories can be exclusive and non-exclusive.

Intellectual Property

In franchising intellectual property refers to the trademarks, trade dress, copyright, know-how, trade secrets, business concept, processes and methodologies, as well as, if relevant, designs and patents that franchisors license to franchisees through the franchise agreement.

Regional Developer

Regional Developers are franchisees who make a larger investment giving them greater rights and responsibilities over a particular region. A region generally refers to a state or multiple states; some larger states like for example, California, may be divided into two or more regions. In exchange for the larger investment Regional Developers normally share a percentage of the initial franchise fee and royalties generated from franchisees in their region.

Area Developer

Area Developers are also franchisees with agreements similar to those of Regional Developers but with smaller territories and sometimes lesser responsibility. The territory of Area Developers is limited to an area such as a city or a county instead of a region which normally implies an entire or multiple states.

Multi-Units Franchisees

As the name implies, Multi-Units Franchisees are franchisees who invest in more than one location. They can acquire the additional locations either initially or over time.

Master Franchisees

Master Franchisees have been replaced by Regional Developers in the US. This type of franchise is nowadays used solely when a company wants to expand overseas. A Master Franchisee takes on all of the responsibilities of the original franchisor in the country for which the rights have been acquired.

Franchise Operations Manual

The Franchise Operations Manual is an extension of the franchise agreement. It includes all the information a franchisee needs to operate the business according to the franchisor’s system.

—->>> Have you encountered a term that you don’t know? Share it with us and we’ll add it to this list…

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• Communicate often:

In this world of electronic communication where emails prevail, grabbing the phone at least every 6 weeks for no other reason than to communicate with your franchisees can be very powerful. The bigger the organization, the harder this program is to implement, however making this “reaching out”  activity a priority will make a big difference in your relationship with your franchisees and your internal organization. Make sure everyone in your company is involved in this activity. No one is that busy that they can’t make one or two calls a day. The idea is to keep these calls light. For example: “Hi Joe, this is Mary Ann from the mail room. I just wanted to say hi. We met when you were here at training and that’s been a long time. How are you doing?” It’s that simple. Let them know you care!

• Remember your franchisees’ birthdays:

Remembering a person’s birthday is also a way of letting them know that you care about them and that they’re important to you. Today, with electronic calendar reminders, this is so simple that there’s no reason why it can’t be done. Additionally, there’re many electronic cards services available at very little cost making it even easier for us to make franchisees’ special days a bit brighter. It’s important that the cards come from a senior level manager, preferably the CEO. An assistant can email the cards on behalf of the manager, BUT he or she should take the time to read the list of cards that go out every day. This simple step will make your franchisees feel more like people to you and less like numbers; and over time, it will strengthen your relationship with them.

• Celebrate their life successes:

Most franchisors are very good at celebrating the performance achievements of franchisees. This is positive, but it’s even better when you celebrate other wins as well. Your franchisees are people with lives that are rich and full, so celebrate their entire lives not just a portion of them. Congratulate them for the birth of a child, the graduation of their children, a marathon in which they participated. Anything that contributes to your franchisees’ happiness is reason to celebrate and to share with others.  This outlook requires open and constant communication with your franchisees and also among your staff so that this type of news gets to the person in your organization responsible for formal communications to get included in your electronic newsletters and other more formal media to share with the entire network.

Your thoughts? Please share other simple ideas franchisors can implement to strengthen franchisee relations.

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Here are 5 traits that make veterans great franchisees:

1. They have discipline; and, you need discipline to succeed in any business venture.
2. They are used to following procedures; and, franchising is all about systems and procedures. Successful franchisees, in general, follow the franchisor’s recipe.
3. They are team oriented; and, a franchise organization is a team that thrives when all parties are good team players.
4. They are familiar with working in a regimented environment; and, franchising leaves very little room for flexibility in the way franchisees operates their businesses.
5. They are used to taking direction from others; and, the most successful franchisees are open to the guidance of the franchisor.

Here are some interesting statitics from the US Census Bureau News, 2007 release as reported in the premier issue of Operation Franchise, a new publication bringing information about franchise opportunities to military personnel. 

• Veterans are twice as likely to own their own business than non-veterans.
• Nearly 3 million of the estimated 20.5 million businesses are veteran owned.
• Approximately 7 percent of veteran business owners have service-related disabilities.

There is no wonder there are more than 350 franchise companies that participate in the International Franchise Association (IFA) VetFran Veterans Transition Franchise Initiative program. Veterans, indeed, make great franchisees. What do you think? What other traits make Veterans great franchisees?

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