Ask Franchisees, “Would you do it all over again?”

Validation and multi-unit ownership are strong indicators that positively memorable experiences exist within your franchise system. Another way to confirm the existence of these experiences is simply to ask your franchisees: would you do it all over again? However, as a franchisor you must first earn the right to even be taken seriously if you ask this question.

As you head down the path of creating positively memorable experiences with each and every franchisee, be sure to consider ALL touch points – even those beyond the obvious mediums of in-person, by phone and via email. Think digitally!

How do you interact with franchisees on Facebook? How do you come across to your franchisees in LinkedIn discussion groups? Is there common courtesy? Are you proud of each other’s actions within these platforms?

Many will refer to all of this as being great in theory, and not really practical. But just think what could happen if every touch point were seen as another opportunity to create or enhance positively memorable experiences. How would that change the culture of your system? How would that lend towards growing your brand? Think of the ripple effect.

Here are six key points to creating positively memorable experiences in a franchise organization:

  1. Understanding the true meaning AND spirit of interdependent franchise relationships. This must be shared and exemplified at every point of contact with franchisees.
  2. Developing the right culture at all levels. Be careful- culture is also defined as bacteria! This takes time and commitment, and is a reflection of how people, whether franchisees, employees, suppliers or others, are treated at all times.
  3. Creating an environment of truth, trust and transparency based upon open, two-way communications – the cornerstone of creating the right culture. Think of a three-legged stool that could hold a great deal of weight when fully intact yet would immediately fall under its own weight if one leg was compromised.
  4. Establishing your franchise system as family. Treat them as such but understand that this is not the typical type of family of yesteryear with subservience to the head of the household. Mutual respect is paramount!
  5. Building an environment of bottom-up profitability and growth with ALL parties to the franchise agreement and other related agreements focused on mutual goals and objectives. All must sing out of the same hymnal, and not just for dress rehearsal – so be sure to give them the hymn book.
  6. Positively Memorable Experiences – Live it and breathe it every day for optimum results!

As National Small Business Week comes to an end, I’d like to give a shout out to small business owners – entrepreneurs, moms & pops, franchisees, sole proprietors – for paving the way for future generations by keeping the American Dream alive. It’s through your hard work, persistence, dedication and commitment that you continue to improve business at the local level.

With your own money and time, you’re actually field-testing new ways of doing business – marketing, technology and other – continuing to innovate and explore across many industry segments.

Taking risks, you continue to invest in growing areas while also helping to revitalize once great areas. And, whether you know it or not because you’re often in the shadow of big business and Corporate America, you are the backbone of this great nation.

You, all of you, each of you are the spirit of Entrepreneurship and free enterprise that has made this country great and will continue to keep it great for decades to come. For all of that, and for all that you do, I thank you!

And as Mental Health Awareness Month continues, I’ll leave you this week with the following:

“Don’t be too hard on yourself. There are plenty of people willing to do that for you. Do your best and surrender the rest. Tell yourself, “I am doing the best I can with what I have in this moment. That is all I can ever expect of anyone, including me.” Love yourself and be proud of everything you do, even your mistakes, because your mistakes mean you’re trying.

If you feel like others are not treating you with love and respect, check your price tag. Perhaps you subconsciously marked yourself down. Because it’s YOU who tells others what you’re worth by showing them what you are willing to accept for your time and attention. So, get off the clearance rack. If you don’t value and respect yourself, wholeheartedly, no one else will either.”

– Unknown

Exploring a Franchise Opportunity: Do your due diligence… and then some!

Potential franchise buyers know before making a final decision, they need to obtain information from other franchisees and also, their possible franchisors. But what information do they need to get?

Generally, I recommend using the Franchise Disclosure Document (FDD) as a guide. Read through it and ask a potential franchisor very specific questions about each item listed. It’s a can’t miss road map. Here’s a start.

What is the history of the franchise concept?

What is the founder’s vision? Who is on the executive and support teams? What experience do they bring to the table? If members of the franchisor team haven’t worked at a location, how have they learned about daily operations? Have any of them owned a business before? It’s important to understand how these individuals relate to franchisees.

How high could expenses go?

All expenses should be clearly defined. It’s imperative to gain a complete understanding of the range of expenses – and why they are what they are. Inquire about assistance for everything from advertising to site selection to your grand opening.

Know what’s going on at the front line.

What is the temperament of the franchise group nationally and within your market or region? Of course, I highly recommend speaking with franchisees, too. Make sure to ask them about costs, problems, profits, and trends. Discuss competition with both the franchisor and franchisees.

Ask about exit strategies.

At some point, you may want to exit the system, or you may have to exit. If you have to exit, is there support if you’re in trouble? Ask about transfer fees and the process of selling your business. Understand the franchisor’s approval process. What happened to each franchisee listed under terminated or closed franchisees on the FDD? What happened to their locations? Have they continued operation under a new franchisee or corporate? Is the location still available? Ask yourself if you would consider a long-term relationship with this brand and its leadership.

Before making your final decision.

After this process is complete and you’ve reviewed your notes, trust your gut instinct! Take your time and think things through until you’re 100% sure of your decision. Make sure you have all your support mechanisms in place, including friends and family. Do not kid yourself. Do not lie to yourself. And do not justify any negatives. Being honest with yourself will help you make the right decision.

Get your financial house in order.

Lenders (and franchisors) have certain minimum criteria when it comes to approving franchisee candidates. Some may require a minimum net worth and a certain amount in liquid assets. It would benefit you to set yourself up financially – for example: find out your credit score, calculate your debt-to-income ratio, and even update your resume.

Get pre-qualified.

You do this with a home, why not a business? By getting pre-qualified through a funding provider, you can better identify what you can afford.

Don’t underestimate how much funding you will need.

One of the leading causes of small business failure is undercapitalization or insufficient funding. Make sure you have enough of a buffer to help with any unexpected operating costs.

Are you ready to own a business?

Talk to a franchise funding professional.

Securing funding can be challenging but is one of the most important steps in starting a business. Knowing your options and ensuring you have a solid funding plan in place is often the key to long-term success and profitability.

Benetrends Financial has been funding America’s most popular brands for over 35 years. Their innovative, fast and economical suite of funding solutions is designed to help franchisees secure the capital needed to successfully launch their dreams. Contact them for a complimentary funding consultation or find out your fundability with their free pre-qualification funding calculator.

A quote from Ray Kroc.

There are many quotes from arguably the most successful fast-food retailer, Ray Kroc that reveal what he was thinking and learning about the business as he was building the McDonald’s chain in the U.S. and ultimately around the world. I believe I like this one best:

“It requires a certain kind of mind to see beauty in a hamburger bun. Yet is it any more unusual to find grace in the texture and softly curved silhouette of a bun than to reflect lovingly on the hackles of a favorite fishing fly? Or the arrangement of textures and colors in a butterfly’s wing? Not if you’re a McDonald’s man. Not if you view the bun as an essential material in the art of serving a great many meals fast.”

Domino Effect of a Customer Experience

Here’s a story that was shared with me during our last recession. I recently thought about how such an experience can ultimately affect a franchise brand (or any brand, business or organization) today. So, franchisors, and anyone else that may want to chime in, please keep the following questions in mind:

  • How would you handle this situation if you became aware of it through a customer complaint?
  • If asked by a franchisee about what to do in a situation like this or how to avoid it completely, how would you respond?
  • Are scenarios like this covered in initial and ongoing franchisee training?
  • Ultimately, if similar situations are repeated, how could it affect the franchisee’s bottom line and how could it affect the franchisors’ bottom line?
  • How should a franchise organization go the extra mile in working and communicating with its franchisees about customers, ultimately, the brand’s customers?

When the story was shared with me, I immediately thought about a question that had been posted on a discussion board about what companies were prepared to do in order to retain customers during a recession or time of economic uncertainty.

Domino Effect

Late one morning, a client of mine was told by his boss to purchase gift cards to be given as prizes for that afternoon’s golf tournament. The company had decided to increase the number of prizes as the response to participate by local businesses was overwhelming. The tournament was to start at 12:30PM and my client was playing in the event and also had several of his clients playing with him. Therefore, it was imperative he make it to the golf course by noon at the very latest.

At 10:35AM he went to a national chain restaurant location and found it closed but saw a lot of activity inside by the front desk. He knocked on the door and explained his need to purchase $1000 in gift cards. He was rudely told the restaurant didn’t open until 11:00AM. My client explained his circumstances and the need to get across town to the golf course and not having to wait 25 minutes would really help him. He asked to speak with a manager. He was told the manager was not available and emphatically told once again, we don’t open until 11:00AM. The door was abruptly slammed shut before he could utter another word.

Instead of waiting, my client went across the street to another national restaurant chain location and found it also didn’t open until 11AM. However, as he was looking in, a cook noticed him from the back, hurriedly walked up front and opened the door. Upon listening to my client’s request, the cook cleaned his hands and with the help of two other staff members in the restaurant, they were able to put together enough gift cards to make up the desired amount and complete the transaction. All within a matter of minutes!

Here are a few thoughts to consider:

My client frequently takes clients out for lunch. Do you think he’ll frequent the first restaurant in the future? Do you believe he would go out of his way to dine at the second location?

The gift cards were given to ten participants at the golf tournament. Do you think they may spend above the gift card denomination when they redeem the cards? And is there a possibility their experience at the restaurant may be their first to the restaurant and if they enjoy the experience, they may visit in the future?

How many people will my client inform about his bad experience at the first restaurant and with how many people will he share his great experience?

The list of questions could easily go on with respect to my client’s boss, others in their organization, participants at the tournament, etc.

Yes, there’s a domino effect with a bad customer experience. However, the same is true with a great customer experience. Maybe even more so when the experience is positively memorable.

But the most important questions to ponder are, how much does a negative domino effect hurt a business or brand during a recession or time of economic uncertainty and conversely, how much does a business or brand benefit from a positive domino effect during that same period of economic challenges. And especially in an era of review sites, social media and influencers?

Franchise Candidates: An Evolving Mindset

This article was originally published in 2009, as Franchise Candidates: A Changing Mindset and then revised in 2014 as, Franchise Candidates: A Changed Mindset.

Now, revised today under its current title, the article may be more relevant as franchising continues to evolve AND rebound from the pandemic and its unprecedented challenges. Compounding these challenges include the necessity of developing and implementing plans to address the looming recession and how the same could potentially hinder recovery plans and squash growth initiatives.

Franchise brands will continue to explore and invest in more viable, effective lead generation strategies in order to stand out in an increase in industrywide efforts to attract franchise candidates. Think of the increasing number of franchise expos & shows and franchise broker (consultant, coach) networks as cases in point along with the proliferation of new franchise portals and lead generation companies. And let’s not forget the influx of ways to distribute content including podcasts, video, blogs and now, the metaverse!

Further, franchise brands are continuing with their commitment to social media and digital marketing having [finally] realized their positions as integral and effective components of these strategies. Sadly, but not surprisingly, a significant number of brands still have not realized the potential of doing so according to an evolving integrated plan thinking these marketing efforts are solely line-item costs as opposed to an investment/expense hybrid.

Today’s Candidates

A look at today’s franchise candidates will reveal they are more sophisticated, better educated (academically & professionally, as well as self-educated), and more technologically advanced than ever before. Demographically as well with more females and minorities (including a growing number of immigrants and refugees) seeking business ownership as a way toward self-independence. Multi-generational partnerships are adding to the mix.

In addition, and possibly even more so due to current economic uncertainty and challenges, including world events, the mindset of today’s candidates, regardless of background tends to be somewhat unsettled or uncertain in thought. Ultimately, this creates a sense of uncertainty and hesitancy in moving forward. Caution is a common thought expressed by today’s candidates.

To that end, today’s candidates are spending more time researching options and opportunities and doing so at a much slower, deliberate pace. In order to be diligent in the process, more time is being spent online reviewing page after page of information, constantly bookmarking, and moving back and forth from new information to saved information. They’re comparing notes for consistency across one platform to another as well as with other franchise candidates on social networking sites. As well, they’re gaining invaluable insight monitoring online discussion groups and forums.

Ultimately, today’s franchise candidates desire and need to be certain the franchise opportunity is as close to perfect for his or her (or their) situation, and as humanly and practically possible.

Especially after previous recessions, franchise candidates have used their capital gains to invest in franchise opportunities, often being able to leave their principal investment untouched. There was a sense of throwing caution to the wind because they were investing profits, often considered as found money from ungodly profits, at least by today’s standards. Does anyone remember when money markets kicked out 17% returns?

Unfortunately for the typical franchise brand but possibly and rightly so for the future of franchising, a multitude of individuals looking at franchise opportunities today are looking at things differently. They have to. They must.

Many are transitioning corporate executives and mid-level managers staring at the back end of what were previously described as great career paths, now trying to squeak out just five or ten more years before they actually retire, or when they could afford to retire. Facing the challenge of younger talent, new technology, a rapidly changing business environment, along with living longer lives many opt to “buy” another job and explore franchising and small business ownership.

What has Changed?

Here’s the difference between today’s recession, and of those in the past. As huge fortunes have been lost, and large gains have not been realized in current financial markets, today’s candidates are forced to invest all or part of their remaining nest eggs in order to enter the world of business ownership. Of course, most everyone knows and somewhat understands the risks (or that there is risk) involved in owning a business. But in yesterday’s business environment, many franchisees and business owners were “gambling” with profits.

Certainly, no one wanted to lose money in a business venture. But many had fallback positions with funds still in retirement accounts and if they had to, continued employment including second and third jobs.

For many of today’s candidates, failure is not an option because fallback opportunities are fast becoming more challenging. Maybe even more so due to recent views and actions against side-gigs & freelancing and monitoring of Venmo & Pay Pal transactions. Actually, I believe many of today’s candidates might not have even considered franchise or small business ownership in the past. For tomorrow’s candidates that may be even more the case.

So, as many individuals explore their options, they will focus more and more of their efforts online. Franchisors must embrace this fact and continue to dedicate more resources to the internet and expand their efforts within social media to complement and enhance their traditional franchise marketing strategies. They must focus more and more on bringing their messages directly to their audience as opposed to just relying on attracting them, and in an interactive way. By doing so, they’ll realize multiple benefits for their entire system including:

– Developing and strengthening brand awareness with franchise candidates and consumers alike – including those who may not know much, or anything about franchising, or quite frankly about the brand itself.

– Generating franchise leads that are genuinely interested in exploring entrepreneurship and to that end what franchising and small business ownership have to offer.

– Introducing particularly new industry segments that may include opportunities that could be the right fit for candidates to achieve their goals and objectives.

– Establishing an interactive environment of information sharing, communications and education that will become the backbone of future franchise relationships throughout emerging and legacy franchise systems alike.

– Creating positively memorable experiences and the right culture for franchisees (as well as for all brand stakeholders) the foundation for future growth fostered by excellent validation and multi-unit development.

Last, many franchise candidates previously viewed franchising and small business ownership as a way of achieving their wishes, hopes and dreams, regardless of what those may have been. Today, it’s more about goals and objectives, AND necessities. All within franchising must fully realize this and understand the evolving mindset of today’s franchise candidates in order to survive and grow today, and tomorrow.

8 Key Focus Areas of Successful Franchise Leadership

From professional athletes to high-tech programmers, every career requires different talents. However, what makes a career as a leader of a franchise system different are skills that do not have to be acquired through rigorous training or years of schooling.

Instead, success in franchise leadership can come to anyone who is determined, dedicated and willing to invest in their personal development—and will pay off tremendously by developing a network of franchisees who respect your leadership traits. Below are key focus areas for individuals to become successful brand executives and great well-respected leaders:

  1. Consistency: As the franchisor, your franchisees will be looking up to you. Being consistent and following through on your word will let them know that they have a leader they can count on.
  2. Planning: Your franchisees are invested in the business, so it’s natural that they will want to know where it is headed and the steps necessary to get there.
  3. Communications: Make certain to share your vision with franchisees as well as with your team in an open, transparent manner to ensure confidence at all levels.
  4. Support: As a franchisor, everyone in the organization is your team member—meaning you have a vital role as a pillar of support and encouragement.
  5. Positivity: Focus on creating a positive space for your franchisees. This will help strengthen your bond and let them know you have their back.
  6. Respect: Every franchisee makes mistakes—it’s just a part of the business. Making sure your franchisees know you still respect them even when they slip up will go a long way. The same will be true for franchisor mistakes, but only if earned through mutual respect.
  7. Face Time: You can’t be expected to visit every franchise location every day. However, the occasional impromptu visit will help you learn more about the day-to-day operations and struggles of each individual location—and let them know you’re invested in solving their problems.
  8. Passion: Franchising means getting to work with talented, passionate colleagues who love what they do. Believe in the brand and believe in your franchisees—your passion will shine through and inspire them, as well.

Fear And Consequences of Failure: A True Story Retold Once Again

I’ve been asked time and again to post the following article that I’ve written about in 2011 regarding my own personal experience as a multi-unit franchisee where I succeeded at first, only to crash and burn later on. Over the years, this article has been posted on several of my blogs, picked up by numerous other blogs & online publications, and discussed on various podcasts. I have received numerous comments and inquiries about the article and my experience as well as individuals sharing their own personal experiences and requests for assistance. Although I cringe at the thought of any business failing, I admire and respect the fact that franchisees and franchisors alike (small business owners and individuals & teams running larger organizations as well) know when to put their pride aside and ask for assistance, and I always look forward to providing my experience and expertise to help determine a practical resolve to their problems. 

I’m proud to say this article has been instrumental in helping a number of businesses keep their doors open and work towards recovery. On the other hand, I’m also sad to say several businesses were not as fortunate, but at least the owners were able to exit with dignity and in few cases, with less liability than they previously thought possible. And, in one case, the business owner actually exited in the black when we were able to facilitate the sale of her business when she previously thought about just walking away. Considering the difficulties many small business owners, restaurant operators, franchisees, entrepreneurs and organizations have experienced over the past two years and with challenges continuing, I’m sharing this article once again.

Fear and Consequences of Failure (unedited from 2011)

I can personally relate to the trials and tribulations of owning franchise businesses as I have “been there and done that” and have experiences on both ends of the spectrum from achieving overwhelming success to dealing with bitter failure. I have definitely come to understand the fine line between success and failure in trying to nail down the American Dream.

I know it is sometimes counterproductive to even mention failure which is why the subject is always avoided and never discussed. Yet, it’s out there and it’s real. Once franchisees face the possibility of failure and its very real consequences, they can be motivated to understand that failure is not an option and commit 100% to a plan that addresses immediate problems and provides solutions accordingly. Even if it’s necessary for the plan to be quite drastic or aggressive due to prevailing circumstances, franchisees that unequivocally realize that failure is not an option are prepared for immediate action.

Let me emphasize one point. Franchisees should not view poor sales and disappointing profits as either potential or immediate failure and stick their heads in the sand. I made that mistake in the past and suffered the consequences. Instead, franchisees should build upon the courage it took to become a franchise business owner and recommit to success as they did when they first took the entrepreneurial plunge.

They need to remember their wishes, hopes and dreams that prompted the decision to own their own business. They need to remember the admiration of family and friends when they heard about the new venture. They need to remember the excitement when they actually signed the franchise agreement.

Unfortunately, there’s a very distinct possibility the root of the problem is embedded in the franchisee’s actions, non-conformity to the franchise system and unwillingness to face reality. However, as there was some shining light evident during the franchise award process, it may not be a totally lost cause if the franchisee is made to completely understand the implications and consequences of failure.

As franchisors are faced with the potential of closed units [during this recession] that may be the result of things out of their control, it’s imperative they don’t lose even a single unit just because a franchisee just flat out needs a snap back to reality. It’s worth the effort.

Let me clarify something. I failed as a franchisee. Not because of anything the franchisor did or didn’t do but because I put and kept my head in the sand and did not face reality. I could go on and make excuses about things that happened around me but at the end of the day I could have turned things around if I got my own head out of the sand, made some difficult decisions and took full, immediate responsibility.

Unfortunately, I was scared of failing. I was afraid of what people would think. I was ashamed at what other franchisees, ones I put in business, would think of me. I couldn’t even think of facing my family. All lame excuses for not taking responsibility. Maybe a hard swift kick you-know-where would have helped.

Did I mention that I previously ran the franchise company where I failed as a franchisee? Did I mention I was elected by fellow franchisees, President of the National Advisory Council? Did I mention that I owned and operated five franchise units?

If I had clearly understood the implications and consequences that were looming on the horizon and if I was able to get my big ego out of the way and address things head on, maybe I could have survived. Maybe I could have at least implemented an exit strategy that would have, in some small way, paid back the loyalty and support of my employees, family and friends.

In the end, I may not have survived because it may very well have been too late when and if I finally took action and responsibility. But maybe I could have at least exited with some dignity. Also, I could have saved many innocent people a great deal of hardship, embarrassment, wasted effort and ill-spent resources if I did face reality. This includes my family, my employees and yes, my franchisor; all who believed in me.

Yes, it was a tremendous learning experience but not one I would bestow or wish on anyone. Now, all I can do is to offer my experience to anyone in the franchise industry that needs assistance. As we [prepare to enter 2012] in the realms of economic uncertainty, I’m certain already difficult situations have been compounded but I’m confident a snap back to reality could only help. If just one franchise business is saved from the consequences of failure, then we’ve made progress. Progress we’ll continue to build upon.

Strengthen Franchise Relationships by Saying “Thank You”​

To celebrate Franchisees, I cite the lyrics to the Alabama hit song, “Forty Hour Week”. It’s my way of expressing gratitude for the many, many franchisees and their employees that do their parts every day to make, not only their franchise brands run each and every day, but also our great country. We often take so much for granted when things run smoothly, almost seamlessly. Of course, during COVID there were challenges, but many franchisees did what they had to do, and persevered.

And then, it hit me as I reread the last verse of the song…

There are people in this country who work hard every day. Not for fame or fortune do they strive. But the fruits of their labor are worth more than their pay. And it’s time a few of them were recognized.

Wow, how could I miss something that should be standing out front and center? Is it obvious? Do you see it yet?

Okay, let me make it easier to spot. In the verse above, change “people” to “franchisees” – Ah, there it is! There are franchisees in this country…

At times, there is some discourse (maybe more than we’ll admit) today around the franchise relationship and it really doesn’t need to be the case if the focus is clearly on relationship basics, and that starts with appreciation. Remember, many franchise organizations refer to their system as a family. Isn’t being family enough to expect appreciation?

Think about when a franchisee signs their franchise agreement and remits the franchise fee – they’re quickly told, “thank you” and they’re even recognized in the brand’s newsletter and also in press releases announcing them as a new franchisee. Yes, that’s awesome.

Now, ask yourself, is that the last time franchisees are actually thanked or recognized? Most likely that is often the case. But I’m not just referring to systemwide accolades. I’m talking about someone from the brand’s leadership team picking up the phone for a quick call or planning to visit when in the franchisee’s area. Or at the very least sending a hand-written note just to say, “thank you” and that they’re appreciated for their investment in the brand, for how they represent the brand, and for how they’re committed to protecting the brand.

So, why not jumpstart an improvement in your franchise brand’s culture by starting with “thank you” as the norm, rather than as the exception?

There are franchisees in this country who work hard every day. Not for fame or fortune do they strive. But the fruits of their labor are worth more than their pay. And it’s time a few of them were recognized.

Developing and Cultivating the Right Culture

Recently, in a discussion about organizational culture, the exchange was quite robust and included the following statement from a CEO participant who stated, “The challenge becomes determining where and when things might be out of alignment. So, developing the methodology about how to realign must be developed and committed to early on.”

To the CEO’s point, the development and management of organizational culture is much like that of developing and cultivating a brand…

It must be planned.

It must be nurtured.

It must be allowed to grow.

It must be invested in.

It must be protected.

It must be promoted.

It must be cherished.

It must be the center of the universe.

I believe it’s relatively easy to determine when and where things are out of alignment in a franchise organization – disgruntled franchisees, refusal of franchisees to develop additional locations and instead are investing in other brands, frequent franchisor employee turnover… just to name a few that would be very apparent. Obviously, these are the results of, but not the root of the problem that may have caused things to move out of alignment. Mostly the problems occur (and fester) due to poor communications and lack of transparency between franchisor and franchisees. Inconsistent messaging adds fuel to the fire. Basically, similar problems to a marriage or other types of relationships that fail.

As for methodology to realign, that takes full commitment and focus from all parties to the relationship. However, in a franchise relationship it takes the franchisor to take the bull by the horns and lead the charge. The franchisor must spearhead the initiative to create open, honest, transparent communications, and especially through difficult scenarios. Franchisees have made a significant investment in the brand, and they must be kept aware of the good, bad AND ugly. Two precarious points include: How much is too much? Do franchisees need to know everything? Getting back to square one, a benchmark of sorts is critical as emotions running high will dictate more rather than less. Actions must speak louder than words!

At workshops and seminars, as well as within coaching and consulting projects, I talk a great deal about creating and delivering positively memorable experiences at all times. I believe it applies to the franchise relationship as much as it applies to customers & clients. I won’t get too deep here as this past week I shared my thoughts on the topic in this newsletter and in the past in the IFA’s Franchising World magazine. Instead, I will share my thoughts on a guideline that will help monitor the experience factor in any transaction or relationship. This guideline is what I refer to as, “The Emotion Circle”.

The Emotion Circle

There are seven key steps within the circle. Think in terms of a clock with the top being the starting point. This is where the relationship begins. Once something occurs that doesn’t meet expectations the first reaction is surprise. From there, emotions may escalate to the next steps of disappointment and doubt. Or it may not escalate but another “incident” will definitely move the needle along. Sometimes, even an unaddressed issue will move it.

Of course, it is inevitable things happen, and expectations aren’t met or even understood. This is why proactive, open, transparent communications are paramount. If the issues are discussed openly and frankly in a respectful way, the needle can be moved back to the 12 o’clock position with minimal or no chance of fueling a fire. We must keep the emotions within the blue section of the circle. This is key!

However, if issues are not addressed in a timely and respectful manner the fire burns rapidly and on occasion to the point where it flares up and / or quickly burns out of control. And, just like wildfires in the forest, these fires can and will jump across roads from house to house and community to community with devastating results.

If not brought under control in a swift manner, the next emotions are often expressed in rapid order through the pink sections and into the red circle. These include frustration, anger, hostility and yes, remorse (think “buyer’s remorse). Ultimately, the end result is broken trust and as we know, trust is the backbone of ANY relationship. Moving back from the pink section is extremely difficult, but not impossible. However, once emotions escalate into the red section, the possibility of salvaging the relationship is almost impossible. Trust will need to be earned back without any assumption on the part of the offending party that it will.

In order for realignment to occur throughout the emotion circle, issues must be addressed expeditiously. It’s paramount that trust be rebuilt before further escalation of emotions. It’s certainly not easy – but it can and must be done. However, it does take huge, ongoing commitment to be established, to remain in place, and to be built upon.

An important question to ask yourself or of an organization’s leadership – Are we truly committed to our relationships? If the answer is not a resounding yes, rest assured trouble is on the horizon. As such, it’s essential to find out the reason(s) and immediately take action to correct. The foundation of developing and curating the right culture depends on it.

Franchising: Yesterday, Today & Tomorrow

As I often do on the weekends, I was searching through my personal library seeking out a book or two that might provide me some inspiration for an article or report, and this particular weekend, I came across a business book that was published back in 1979. The book, “Free Yourself in a Business of Your Own” by Byron Lane, caught my eye for reasons I cannot really explain. Obviously, I’ve had it in my possession for many years, yet, never opened it again since I purchased it for $1.29 at Target. It must have been a clearance book as the cover price was $5.95. Anyway, I can’t even recall seeing it when I routinely search through my library. It’s like it suddenly jumped out front and center and said, “Hey, look here!”

Well, I decided to look through the book because the back cover stated, “This book is about freedom. Freedom from an 8 to 5 regimen. Freedom from dehumanizing democracies. Freedom from job boredom. Freedom from the lock-step culture. Freedom to do your work your way.” Hmmm… not much seems to have changed although lock-step culture is not something I’ve heard of before. Lock-step, yes. But not, lock-step culture.

Right away, my thoughts turned to franchising and I began to think about what franchising was like back in 1979. Fortunately, I didn’t have to think very hard, as to my surprise, was a chapter on franchising! It’s placement was to present franchising strictly as an alternative to other forms of business ownership, and in a book with 174 pages, the franchising chapter comprised all of 3 pages. Yes, 3 pages!

Within these pages were a series of bullet points that I found very interesting and it made me wonder how much franchising had actually changed since 1979, and if the changes have improved franchising today. Read the bullet points below and you be the judge.

– While there are no federal laws governing franchising, most states have franchise laws. Get a copy of the law in your state and read it for degree of stringency and coverage. If it is a tough law and a franchising company qualifies to do business in your state, you have one measure of security.

– Don’t believe that acceptance of you by a franchiser means they have evaluated your ability to get the job done. Some franchisers would select a corpse if rigor mortis had not set in and if it clutched in its hand a certified check for the amount of the franchise fee. Do your own introspection and decide if you can handle the franchise.

– Do not deal with profit projections or average profits. Insist on actual financial statements from a cross-section of franchisees. Then, evaluate your expected return on investment.

– Get the financial statement of the parent company and evaluate its ability to provide the services it promises.

– Read the franchise contract. It should be simple, frank, and fair, with complete disclosure, not an instrument of repression. After you think it through with your head, listen to your gut and determine if the contract fits you

– Finally, and perhaps most important of all, is evaluation of the franchiser’s management team. You should do this from two aspects – their management ability and their humanness. If the management does not measure up to good corporate standards, you will not get the profits you seek. You may turn out okay, but they can bring you down.

Here we are 43 years later and as I’m in the midst of wrapping up a few last FDDs to be just in time for annual renewals, I find myself asking the question over and over in mind… How much has franchising changed since 1979, and have the changes been for the better? Ironically, I just saw another article about BurgerIM and thought, maybe we need more changes, or are more changes only necessary because of the few who refused to play by the rules?

5 Tips for Finding the Perfect Franchise

With the Great Resignation still in full swing, a lot of people are choosing to take control of their personal and professional future by exploring entrepreneurship. 

Of those who realize their entrepreneurial potential many choose owning a franchise as the vehicle to take them from employment to entrepreneurship due to the already proven business model and built-in, ongoing support system, among other benefits.

If becoming a franchisee seems like the right path for you, follow the tips below to find the perfect opportunity.

1. Keep an open mind, then focus. No one wakes up and says, “I want to be in the septic tank industry,” but I know someone making a lot of money and meeting his lifestyle goals doing just that. The bottom line is: Don’t rule out a business without learning or seeing what the day-to-day will look like.

It’s important to find a franchise that allows you to reach your desired income, lifestyle, wealth and equity goals. For instance, think about a mom returning to the work force who knows she wants to interact with children on a daily basis. There are hundreds of options that allow her to do just that. Now, she needs to decide if she would like to be hands on as a teacher or if she would rather manage a facility that tutors children in math. Deciding between the two is easy if she considers which day-to-day position she would prefer and how that will impact her other goals.

2. Be proactive with your research. After you’ve determined what role you want in a franchise, it’s important to start scouting different options. Physically visit many different franchise locations to see if there is a void in the marketplace and start thinking strategically about how you could fill it.

Next, browse the web to see what is available in other areas and determine whether or not it will be a fit in your community. For example, if your neighborhood has many well-run restaurants but none dedicated to ethnic food, it may be time to look for Mexican franchise restaurants within your budget. 

3. Make sure the franchisor has experience. Before signing on to a franchise, it is essential to ask the franchisor about the executive team and its past industry experience. A potential franchisee should look for a company that has a corporate store — or better yet several — that have seen success that can be replicated. If this isn’t the case, find out if the company leaders have had significant experience at another franchise and are now applying that knowledge to this concept. 

4. Reach out to other franchisees. When asking other franchisees about their experience, it’s important to take the good with the bad and to examine a large sample size before making a statement about the franchise in general. I call this the “dilution factor.” If one franchisee says they can’t turn a profit at their store, make sure it isn’t because they refuse to clean the bathrooms and their customer service is lacking. By talking to a wide array of people you can get the best feel for the franchise as a whole.

5. Read the franchise disclosure document carefully. The first thing to look at is how much a franchise would cost to purchase. If the money is there, then check out “item 19,” which lays out the financial performance representation. Make sure you have a financial advisor who can look at that item with you and see the type of profit a franchisee can make on average.

Finally, take a look at the post-termination clause in the agreement. I am a big believer in exit strategies, because sometimes you may later find a franchise is not the right fit and sometimes things just happen. In any case, it’s important to protect yourself should there be a situation where you want to disembark from the franchise. 

Author’s Note: If you’ve been thinking about exploring business ownership and live in and around the Orlando area, then you will not want to miss The Great American Franchise Expo March 26-27 at the Orange County Convention Center and April 9-10 in Miami at Miami Airport Convention Center. Learn about future dates at FranExpoUSA.com.