Everyone Knows Someone

Everyone knows someone…

…who has a franchise that’s not quite working.

It struck me the other day as a truism that should really be explored – like five degrees of separation!

I got a call from a marketing guy. He was very good and actually asked me some questions before trying to sell me a solution. (Rather than: here’s my solution, now, what’s your problem?)

I told him I worked as a franchise consultant and trainer and immediately struck gold.

The marketing guy mentioned he had a client who had a good business and decided to franchise it a year or so ago. He quickly recruited four franchisees and has been living a nightmare ever since.

You see, he tried to do it on the cheap. He thought it was enough that his business was doing well and that franchising success would follow on easily.

As a result he recruited four franchisees without proper systems and processes in place for marketing and sales, product training, managing and running a business, a proper support function and a hundred other things.

As a (further) result the four franchisees haven’t been as successful as they thought they were going to be, they are working harder than they thought and are thoroughly frustrated. This makes them militant, difficult to manage, demanding and so on.

In turn a lot of management time is spent with the franchisees meaning the pilot operation is now suffering from reduced turnover and lower profits.

An all round horrible position for everyone involved.

And it’s all because the franchisor thought that franchising was an easy way to expand the business.

As I’ve said before in these blogs… it ain’t!

The first thing anyone considering franchising as a route to expand their business must do is make a mental leap… you no longer run whatever business it was you were in. You are now in the business of franchising – profit comes from franchise operations.

This first step is vital because it changes your decision making processes because it forces you to do things like:

Log processes
Carefully consider implementing new products
Think about the support a franchisee needs
Recognise that profit now stems from franchisees not your own efforts
You ring fence your pilot to keep it safe
Etc.

I’m pleased to say that the franchise I’ve talked about here is entirely fixable, but it’s been a far more painful process than it needed to be.