Keys to Success

Keys to Success

Being both an entrepreneurial business owner and interdependent with your franchisor

can lead to exceptional success for a franchisee.

By Ben Davis

When it comes to running a franchise, 95 percent of the factors of success are the same factors that any small business owner is thinking about: maintaining cash flow, finding new customers and retaining quality employees, to name a few. However, there is a small albeit paramount subset of issues unique to franchisees that revolves specifically around the franchisee/franchisor relationship and the co-marketing of a brand.

The majority of franchisees would agree that they started down the franchise path because they wanted to be a small business owner. At the same time, they didn’t want to assume all of the risks and costs of managing the entire learning curve of business ownership all on their own. They have the gumption it takes to harness their strengths and be successful in their own franchise locations, but they see the value in being interdependent with established franchisors that can provide expertise and established infrastructures. If this sounds familiar to you, you might be an entrepreneurial franchisee.

The best practice for any franchisee is to align and work together with the franchisor in building the franchise unit. As an entrepreneurial franchisee, you must learn the balance of give and take. Determine what is the right amount of time to spend building and strengthening your individual business versus giving back to your peer franchisees and the broader franchise organization.

Living at the intersection of these two ideas – being an entrepreneurial business owner and being interdependent with your franchisor – will lead to exceptional success for both your individual franchise and the franchise organization. Here’s how to strike that perfect balance:

No. 1: Take Shamelessly

As a new franchisee, especially within a mature brand, be a taker. Take shamelessly, and get right with the fact that you are going to take a whole lot more than you give at first. Presumably, you spent a great deal of time determining which franchisor you should hitch your wagon to prior to cutting that check for the initial franchise fee. Now go get your money’s worth!

Part of the franchisor’s role is to engage with the frontlines to gather performance data, test marketing strategies, identify best practices and package them for easy implementation among the franchise network. It is always a huge tragedy to see a franchisee fail to take advantage of the very resources that led them to choose franchising. Don’t pay to reinvent the wheel. If the franchisor says, for example, don’t spend your ad dollars on billboards, trust that they are providing you sound business advice.

Additionally, you should create a personal relationship with four or five seasoned franchisees. Look for those who are cut from the same cloth as yourself. Isaac Newton said, “If I have seen further, it is by standing on the shoulders of giants.” Spend time standing on their shoulders, learning everything you can from their experience and insight. Take shamelessly from them, realizing that one day you’ll become the giant.

In summary, BE ENGAGED with your franchisor and peer franchisees. Many franchisors measure franchisee engagement in some way: participation in webinars, conferences, online communities, surveys and other activities. There is an abundance of evidence to show that franchisees who engage their franchisor and their peer franchisees achieve their goals more often and in less time than those who don’t.

No. 2: Give Freely

Franchisees can be competitive – it’s the nature of business – but a key to becoming a successful franchisee is sharing your good ideas and innovations with the franchise. Consider the story of the McDonald’s Egg McMuffin. The concept was born of Santa Barbara McDonald’s franchisee Herb Peterson, who wanted to create an item for the franchise’s still-developing breakfast menu. Peterson developed the concept of the handheld breakfast menu item at his location, and introduced the sandwich to McDonald’s founder Ray Kroc, who was sold on the first bite.

Managing innovation within a franchise organization requires a franchisor that is humble enough to listen and a franchisee who is both innovative and willing to share. Ideally, the franchise structure provides a place for great ideas to come in, be refined and channeled back out to benefit all parties.

Refuse to see your franchisor or peer franchisees as competitors. There is enough external headwind out there in the open marketplace. Any internal competition should be fuel for growth and fun, never a resource-consuming or goodwill-killing headwind.

No. 3.: Work On the Business

The one thing that franchisees tend to do better than non-franchise small business owners is working on their business and not just in their business. While most small business owners would agree on the value of investing time in working on the business, many are so bogged down with the day-to-day operations of running a business, they only have time to work in the business. Their days are so consumed by things that feel urgent, they never feel able to make time for things that are important.

One of the benefits of working with franchisors is that they tend to be very good at helping franchisees step back to look at what needs to be done to work on their businesses. The franchisor will provide great dashboards and access to other KPI data that will give you a sense of where you are relative to your goals and to other franchisees throughout the country or in your region. They will also host conferences, training events, retreats, calls, webinars and other events designed to help you focus on those aspects of your business that are very important but rarely feel urgent.

Franchising is a unique business format: You must subscribe to the idea that none of us is as smart as all of us by recognizing that you are not the guy or gal who is going to reinvent every wheel. Even as an entrepreneurial franchisee who is involved in and committed to making your own franchise location run like a well-oiled machine, remember to listen to, follow and execute the franchise model in your business every day. When you position yourself as both an entrepreneurial spirit and an interdependent member of the organization, you, your franchise, your peer franchisees and your franchisor will be much more successful.

Ben Davis  is Lendio’s chief franchising officer.

 

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