FRANCHISE SYSTEM & LEVERAGING UNLOCKING THE DNA …...Google AdWords Pay-Per-Click Trade shows. ......
Transcript of FRANCHISE SYSTEM & LEVERAGING UNLOCKING THE DNA …...Google AdWords Pay-Per-Click Trade shows. ......
UNLOCKING THE DNA OF A SUCCESSFUL FRANCHISE
WITH CHARLES N. INTERNICOLA, ESQ. AND ANGELA COTÉ
BUILDING A SUCCESSFUL FRANCHISE SYSTEM & LEVERAGING
FRANCHISEE RELATIONSHIPS
THE INTERNICOLA LAW FIRM, PC FRANCHISELAWSOLUTIONS.COM
800.976.4904
Angela helped grow her family's franchise, iconic Canadian brand M&M Food Market, to almost 500 locations.
She has been on both franchisor, franchisee side and out in the field supporting franchisees. She helps
emerging franchisors figure out where to spend their time, energy and money
to move the needle towards their growth goals with less effort. She also
works with established brands' franchisees to help improve their
engagement and profitability.
ANGELA COTÉFRANCHISE GROWTH
CATALYST CULTIVATE ADVISORS
Franchise Factories
Franchising is not straightforward and simple.
People think that if they have a successful independent business, that to grow it they just need to find franchisees
who are equally passionate about their product or service, but it is not that simple.
EARLY LEGAL DOCUMENTATION
WEBSITE
OPERATIONS MANUALS
FRANCHISE FACTORIES
NOT FRANCHISABLE CONCEPT
NOT READYRUN OUT OF
CAPITAL
SCRAMBLING FOR FRANCHISEES TO
OBTAIN FEES
BAD FRANCHISEES
BRAND DAMAGE
For emerging franchisors, what do they need to know about building a successful franchise?
Franchising a business is a long game.
When I have the opportunity to work with someone who is exploring using the franchise model to grow, I actually try to talk them OUT of franchising, and I make sure they realize that royalty self-sufficiency, which means when they will finally start to see the profit drop to the bottom line, usually only happens at the earliest at 50 units.
They should only use the franchise model if they have a big vision and the time, money and energy to make it a reality.
Factors for a Successful Franchise
UNIT ECONOMICSUnderstand your unit
economics including giving up a % of royalties, ad fund and a
decent salary a franchisee could take
BE UNIQUEYour brand/concept has to be wildly unique or have a very
strong differentiator
BE “SYSTEMIZABLE”Your offering has to be
profitable without your direct TLC (i.e., if employees need a
very specialized and rare certification)
SELF AWARENESSTake a hard look at your DNA to ensure being a franchisor is the
right fit for you
BE IN IT FOR THE LONG HAUL (CAPITAL!)
Understand that you have to be in this for the long game
What does the DNA of a successful franchisor look like?
The DNA of a Successful Franchisor
GROWTH MINDSET
SYSTEMS VS. ENTREPRENEURIALISM RELATIONSHIP
BUSINESS
LEADER
TRANSPARENCY
COMPASSION
ADVOCATE
INNOVATE
Where do you see startup and emerging franchisors wasting money?
FRANCHISORS ARE WASTING MONEY ON
Portals Google AdWords
Pay-Per-Click
Trade shows
MARKETING TO ATTRACT FRANCHISE LEADS
It’s like the “vultures” are making these early franchisors throw spaghetti at the walls to see what sticks.
NOT CLEAR ON THE FRANCHISEE PROFILE THEY ARE TRYING TO ATTRACT
DNA of a franchisee What traits a franchisee of their unique brand
should have
FRANCHISORS ARE WASTING MONEY ON
NOT HAVING A CLEAR BRAND FOUNDATION
No mission or purpose
Core values are weak or non-existent
(not accurate, not thought out, not lived and breathed, and not put out to the world)
No clear, strong differentiator and/or not
clear on how to communicate what sets
them apart
FRANCHISORS ARE WASTING MONEY ON
OUTSOURCING FRANCHISE DEVELOPMENT TOO EARLY
The franchisor should be handling the franchise recruitment process
for the first few franchisees so they really get a sense of what they are looking for and really understand
the process.
Franchisors should get expertise help to help them
create a customized franchise recruitment
process that clearly defines what happens from the lead coming in to the signing of the franchise agreement
continued...
FRANCHISORS ARE WASTING MONEY ON
OUTSOURCING FRANCHISE DEVELOPMENT TOO EARLY
Brokers and outsourced development people can be a
great strategy.
But, can be costly and some brokers give the role a bad name
because they don’t understand the brand or just look at it as a sale and not a partnership that truly needs
to be a match.
The broker and outsourced franchise development
person isn’t the one who will have to deal with the
frustrations a year or two after the franchisee signs on
when it turns out the franchisee wasn’t a good fit.
FRANCHISORS ARE WASTING MONEY ON
What factors lead to a successful franchise?
Franchisor Success Factors
Simplified actionable steps for all franchisees
to follow
Sufficient capital
Soft skills and natural leadership style needed to create and nurture the
franchisee/franchisor relationship
Structured support
Clearly defined community marketing
strategies that franchisees can
implement to grow their business
Technology that optimizes efficiencies and data
sharing so that franchisees are clear on their metrics and can focus on growing
the business
Collaborative opportunities
Transparency about decisions being
made, metrics, and where ad fund is
being spent
Ongoing training and professional
development opportunities for
franchisees
Where do you see the franchisor/franchisee relationship break down?
Franchisors forget to slow down
Lack of soft skills in general
They have the technical side figured out but they forget or
overlook the fact that franchisees need a little TLC
Take the time to create buy-in
(i.e., deciding to change software or a policy or the product line but don’t
get franchisee input or don’t help the franchisee understand the why
behind the decision)
What advice can you give emerging brands to really energize their franchise relationships to drive unit profitability?
Invest Time & Energy
Work with the franchisee to decide which community initiatives are a fit for them and create a plan and accountability to the plan
(i.e., If they hate networking and you are telling them to network, they will probably not do it - maybe brainstorm an alternate strategy with them or maybe they actually
just need some coaching on how to network
Create Buy-In
Know the franchisees’ long term goals
You can connect the accountability expectations to the long term goals
Be transparent about decision making
continued...
Create Collaborative Opportunities
Leverage the fact that there are other biz owners in the franchise running the exact
same business
Set up mentoring groups
All team brainstorming session
FAC
KPIs & Structured Support
Look at lead indicators, KPIs and expenses with franchisees on a
regular basis
Provide structured support (recurring weekly calls with a
predictable, standardized agenda)
Train, train, and retrain
How do you roadmap what franchise success looks like?
Franchise Success Roadmap Starts here
Start with roadmapping session:
Lift the hood on what you’re focusing on; 30,000 ft. view on what’s going on to really move the needle for them to hit their goals.
Discuss infrastructure required to scale the business; how and when to implement
Avoid franchise vultures - it’s easy to get distracted and not know where to focus and where to put your energy and resources
OPEN Q&A
UNLOCKING THE DNA OF A SUCCESSFUL FRANCHISE
WITH CHARLES N. INTERNICOLA, ESQ. AND ANGELA COTÉ
BUILDING A SUCCESSFUL FRANCHISE SYSTEM & LEVERAGING
FRANCHISEE RELATIONSHIPS
THE INTERNICOLA LAW FIRM, PC FRANCHISELAWSOLUTIONS.COM
800.976.4904