PART 1 - THE DNA OF SUCCESSFUL FRANCHISE SYSTEMS
Transcript:
“Today we kick off a series on the DNA of successful franchise systems. I’ve broken down the strands into key sections, partially to avoid boring you, mostly to help you capitalize on my experience. I’ve served in nearly every function for multiple brands and various industries as a franchisor as well as a franchisee.
So if you’re serious about exploring franchise ownership, here’s what this series will do for you. One, will provide practical insight you can apply immediately as you investigate potential franchises. Secondly, it prepares you and puts you in the right mindset to evaluate, analyze, and make informed go-no-go decisions.
The series is grouped into a number of sections, ranging from people, unit economics, operational ethics, Excellent sales, marketing, and advertising to technology and supplied products as well as something I like to call grounded in reality. Okay, before we get started, let’s set the stage. The strength and long term viability of any franchise system is highly dependent upon the fit and the quality of the relationship between a franchisor and its franchisees.
So let’s talk for a moment about what each party, a franchisee and a franchisor, brings to the relationship. Ideally, franchisees need to be self-starters and problem solvers, know the importance of teamwork, and value human relationships, such as with customers, staff, professionals, suppliers, the franchisor themselves, mentors, and mentors.
Tours and so on. The most successful franchisees are self aware, coachable. They recognize the value of a brand, are committed to continuous learning, and make decisions based upon data, as well as knowing how and when to use their own intuition. Franchisors, well they bring the specials, the special sauce.
That’s what enables franchisees to build profitable business. Franchisors should be constantly examining their proven business model, pressure testing every element. Systems, tools, training, resources, and so on. Best in class franchisors are accessible at all levels, highly responsive, seek franchisee feedback periodically, are committed to continuous improvement, and carefully select like minded, quality franchisees to join.
Okay, now the stage is set. Let’s get into the substance. I hope you find this series helpful at any point. If you have any questions, reach out, happy to address them. And if you’d like to discuss how we can help you to maximize your prospects for success as a franchise owner, let’s set up some time. Be well”
PART 2 - THE DNA OF SUCCESSFUL FRANCHISE SYSTEMS
Transcript:
“Today, in our second installment of the series on the DNA of successful franchise systems, we’ll address two mission-critical areas: people and unit economics. Culture, in my opinion, is the single most important factor in the long-term success of any business. Quality, people, or talent are drawn to and stay with companies that have great culture because it inspires, attracts, strengthens ties to customers and suppliers and potential new employees.
Before you sign on with any franchise system, carefully examine and assess whether you align with their culture. Core values, clearly defined, evident to you in every interaction, consistently demonstrated in person, on the phone, online, and when speaking with other franchisees with whom you should be validating all of this.
Leadership. Franchisors have leaders and team members. Make sure that you respect them. Style differences aside. Make sure that the actions and words that they speak align. Each senior leader should inspire confidence that they are genuinely committed to your success. Quality franchisees. Franchisee selection should be appropriately rigorous.
You’ll be experiencing this firsthand. If it’s as simple as sign here, well then run for the hills. Speak with a cross section of franchisees. Both those suggested by the franchisor, as well as your own selection, perhaps from another list they may supply. Ideally, you’ll find franchisees to be successful, authentically living the core values, and willing to share ways that they hope to both improve themselves, as well as see the franchise system improve.
Remember, none of us are perfect, and everyone has room for improvement, including the franchise system. Okay, unit economics. Realistic ROI. The unit economics should be strong. They should be proven to be sustainable. Performance needs to be validated when interacting with other franchisees. There’s no other way about it.
The franchise or will share the data and information that they’re legally able to do so through their F. D. D. And then it’s on you to have validating conversations with franchisees to understand that the R. Y. That may be. For trade is in fact achievable performance metrics. Well defined KPIs are imperative.
So whether that’s financial or operational or marketing or customer satisfaction, understand what those are, understand how they’re made available to you, how they may be reported and validate that those things are used by and for and with the franchise or when coaching franchisees. Make sure that franchisees, in fact, are able to cite what they are and how they’re used.
And all of this is being said to say that unit economics, of course, financial bottom line is vitally important. But once again, unit economics and the validation of that is a very important step in your process. Do not discount, though, the importance of people, because it is at the end of the day, both the franchisor and other franchisees from whom you’re going to learn, They’re going to be your support network, and they are ultimately going to be a fabric of your success.
I sincerely hope you find this series, both helpful and, and valuable. At any point, you’re welcome to pose questions. And of course, feel free to reach out if you think that we can help improve your prospects for success as a franchise owner – and be well.”
PART 3 - THE DNA OF SUCCESSFUL FRANCHISE SYSTEMS
Transcript:
“Today in our third installment of the DNA of successful franchise systems, we’ll address the vital area of operational excellence. First, brand consistency. They should have a robust QA program, quality assurance, and that’s imperative because they need to police the product and you need help understanding what consistency means.
The franchisor must be clear about what that means and how, and if at all, you can localize What the product is in your business training, franchisor needs to offer not just initial training, but also ongoing training. So post opening needs to be on relevant topics. And you need to inquire with existing franchisees to validate the value and the effectiveness of that training standards.
Standards need to ensure that they are thorough, that they are clearly written. And you need to ask how frequently they’re updated. You need to understand how compliance to those standards is assessed. And if you can access them online, or how they’re provided to you alternatively. Look for absolute definition.
Versus recommendations and ask questions. If you’re unclear onboarding and training in general. So you want to know that they have a well defined curriculum, a logical and easy to understand schedule. Ideally that they have a hybrid delivery method. So classroom, online, some practical, perhaps on the job, or at centers of excellence in regions.
The effectiveness of the onboarding process and training, as well as all pre opening activity, is a substantial deciding factor in the growth trajectory your business will accomplish. Look for documented processes, timing, key milestones, and a dedicated pre opening resource set. Validate the effectiveness of this onboarding program and all of the resources I’ve just mentioned by speaking to franchisees, particularly newer franchisees.
Ongoing support. Once you’re open for business, the support provided by the franchise system will change, understandably. So, seek to understand what that means and assess those resources. What will be available to you? How will you be coached? And on what basis and frequency inquire about those expert resources to understand.
Is it on site? Is it online? Is it by phone? And on what frequency you can expect that support to take place? I sincerely hope that this series is helpful. At any point, you’re welcome to pose questions, and of course, if you feel like we can assist you in helping you to maximize your prospects for success as a potential franchise owner, reach out and schedule time with us.
Thank you, and be well.”
PART 4 - THE DNA OF SUCCESSFUL FRANCHISE SYSTEMS
Transcript:
“Today, in our fourth installment of the DNAs of successful franchise systems, we’ll address the critical areas of sales, marketing, and advertising. Marketing effectiveness is an area that you really need to dig deep into. You need to understand what the franchise system’s calendar is for local marketing and advertising.
You need to understand what those expenditures are, review them carefully, and understand what’s required versus what’s optional. For optional programs, try to understand what the system wide participation rates are and why they are optional. For required programs, try to understand the performance and effectiveness of those programs in driving new business.
Carefully examine the franchise system’s lead generation. generation program, if they have one, and ask what training is provided to help franchisees convert leads to customers. As the franchisors, the steward of the brand, be sure to inquire as to what advertising is taking place on a brand level and what they suggest you ought to do or require you to do from a direct advertising standpoint locally.
PR is also something you should. Be looking at to understand not only what’s going to be done around opening, but also how and what you should be doing to utilize PR to raise awareness of your location in your particular market, validate the effectiveness of these programs, overall marketing sales and advertising and and do so by speaking with owners in two parts.
One, those who’ve been open less than a year to understand the pre opening and initial opening phase, and then those who’ve been open perhaps more than two years, so that you can understand how the ongoing advertising, marketing, and sales functions and processes work. Okay. Customer experience. That is a primary driver of every business’s performance, and it will definitely be the outcome of every customer interaction that.
It defines the future success of any business because in any business, it is a referral relationship that ultimately arises where, whether it’s a consumer or a business to business relationship, they will refer or speak of you to others. Franchisors should have. Define standards, resources, and methods for addressing customer complaints.
Best in class franchisors may actively engage in gathering and sharing customer feedback, perhaps monitoring complaint resolution, and may in fact provide data on actual customer experience using tools like NPS or similar. Look, no one is perfect, so franchisors should be providing coaching, sharing best practices to the You understand how to improve customer experience over time.
Be sure to inquire how franchisors integrate customer experience into their overall assessment of a franchisee’s performance. Reputation. Any system you consider joining should have a strong and positive reputation. Doesn’t mean that it’s perfect. It should be evident online and through social media.
www.microsoft.com how strong the reputation of the brand and its franchisees are because problems are inevitable. The franchise or should also have a crisis management plan, and they should be sharing those elements and explaining what those resources are not because we count on them occurring. But because we want to know that we’re prepared.
I sincerely hope you find this series to be helpful and if at any point you’ve got questions, reach out and if you’d If you’d like to discuss how we can help maximize your prospects for success as a franchise business owner, feel free to schedule time with us. Thank you, and be well.”
PART 5 - THE DNA OF SUCCESSFUL FRANCHISE SYSTEMS
Transcript:
“Today in our fifth installment of the DNA of Successful Franchise Systems, we’ll discuss technology and supplied products. Technology is often specified and quite frequently mandated. All technology should be focused on simplifying or streamlining the administrative requirements of operating the business.
Ideally, the technology will represent a clear competitive advantage, if not directly in the eyes of customers, then by enabling you to spend more time with customers versus doing paperwork. Seek to understand and validate the benefits, reliability, cost effectiveness, and use of all of those required systems.
The best insights will be gained by inquiring with existing franchisees. Keep in mind that technology changes. So inquire with the franchisors as to any major upgrade initiatives and their potential impact on franchisees. Suppliers. Invariably, suppliers are specified and in fact prescribed by the franchisor.
And they will generally make no exceptions. Generic components perhaps might be available via approved suppliers, multiples or local. And you should be given very detailed specs. If you’re a consumer facing retail business, or that’s what you’re considering, please understand that consumers crave consistency.
They want the same product and service at every location. So for this reason, you should not expect the franchisor to be flexible regarding core products or anything carrying their logo. In speaking with franchisees, seek validation that the suppliers that are specified are responsive, that their products are effective, that they are quality products with competitive pricing.
For franchise systems that are highly dependent upon the supply chain, For example, a food outlet. Be sure to inquire what the contingencies are should that particular specified supplier be unable to perform for any reason. I sincerely hope you find this series helpful. And if at any point you have any questions, please don’t hesitate to reach out.
And if you’d like to learn how we can help you to maximize your prospects for success as a potential franchise owner, schedule time with us. Be well. Thank you.”
PART 6 - THE DNA OF SUCCESSFUL FRANCHISE SYSTEMS
Transcript:
“Today, in our sixth and final installment of the DNA of successful franchise systems, we’ll address how franchisors keep themselves grounded in reality. Some franchisors have skin in the game, and that’s where they actually operate one or more actual locations or units. When they do so, it gives them a chance to be perhaps more well grounded and in touch with the reality.
Of the operation. It also provides them with a test bed. It gives them the ability to assess the impact of changes on all facets of the business staff, customers, owners, uh, and so on. Another way to stay grounded in reality is to have a franchise advisory council. And many franchise systems do the membership in that franchise advisory council should be diverse.
Meaning those who are. Do openings in relative terms, perhaps in their first 18 months, as well as veterans, those who may have been around for several years, as well, those who have a single unit and those who have multiple and in varying types of markets. All of them should be committed to serving in that capacity, and they should represent themselves accordingly.
If you have the opportunity to speak with an FAC member, try to understand what are the important. Issues that the FIC has been dealing with. We’ve covered a lot of ground in this series and in a relatively short period of time. Congratulations both for reaching this point and for tolerating my voice droning on for this lengthy period of time.
This series was created to help those who are seriously interested in exploring franchise ownership and to do so in a thorough, thoughtful, and professional manner. So in completing this series, you’ve You’ve gained practical insight that can help you and be applied immediately in your investigation of potential franchises, and you’ve gained a set of investigative criteria as well as a mindset that you can use and apply when evaluating, analyzing, and ultimately making informed go, no go decisions.
Once again, I hope you found this series helpful. Feel free to reach out with any questions you might have. And if you’d like. If you’d like to learn how working together might improve your prospects for success as a potential franchise owner, schedule time with us. Thank you and be well.”
