Tag Archives: franchisor practice

Recruit SMART, Grow SMARTER

One of the (many) things I do harp on about to new prospective franchisors is: be specific and very clear about what a good franchisee looks like and then go out and with the precision aim of an assassin….find them, bring them on board and LOOK after them.

Franchisee recruitment is not dissimilar to normal business staff recruitment. You need to be incredibly mindful of the ‘job’ at hand, what the skills are that are needed to carry out that ‘role’ successfully and most of all…look for what the career growth path would be for that individual. The extra element that you want to perhaps plan for in recruiting for franchisees is cultivating a ‘perfect’ franchisee who will end up with the operational, hands-on experience that might well be useful to you in 5 to 10 years time.

What do I mean by this? Well, if you are smart (and I hope that you are) – you are setting up a franchise with two views:  1) To Grow and 2) To Exit. By recruiting some golden nugget type franchisees who have the special ‘putty’ to become fantastic, you will be sowing the opportunity for having a managing director, operational manager or even a team of super-staff who will add value and a glow to the business…making it even more attractive to a buyer. Having a team that doesn’t purely hinge on you or your operational knowledge makes a business very sellable.

Bear in mind, these individuals would not remain as franchisees should they start to work for the franchisor – so you will need to think about what you can offer them that will make the career move from business ownership more enticing. Some suggestions on what to offer them:

(a) Taylored package that is heavily incentivised by their results and input (commission %; target incentives like holidays; etc)

(b) Good company benefits (which are rare to find, especially in the UK, and will therefore be very attractive!)

(c) Small shareholding in the business (relative to their role of course)

(d) Input into how the business grows going forward (i.e. make them an integral part of the executive team)

I’m sure there are many more elements you could incorporate into  a package to tempt an existing franchisee into your franchisor fold, all I’m saying is – bear this in mind right from the beginning. Imagine having a team of strong franchisees who (at any point) you will love to be your right hand man/woman? Now compare this picture to merely having the recruitment criteria mindset that anyone with a pulse will be accepted to become a franchisee! (My fury over this point is enough to write a whole post just on this!)

So, what’s my message? When you are planning who you are going to have as part of your network: think long and hard about where you want to be in 5 to 10 years time and how much value you can add by recruiting the right people. By being SMART in your recruitment tactics, you will be growing your business in a much more planned and efficient way (i.e.SMARTER growth!)

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Ethical vs Legal Business Operation

There is a little ‘legal’ restructuring mechanism that has become the toast of ‘good strategic advice’ to businesses of late. A relatively mysterious process called ‘Administration’.

I have to admit complete ignorance in the past about the full meaning of the term, as well as what it means in practice. Perhaps you may have too – but seeing that I have come across this ‘term’ at least 7 times in a period of 4 months – I have decided that I really do need to talk about it!

As an advocate of ethical business and ethical franchise modelling, I am in awe that this business strategy is one that many, many business owners have turned to as a way to ‘get out of hot water’. I realise that there are so many challenges today in running and operating a business, much less surviving tougher economic climes, but I am horrified in this new trend. I almost feel as depressed as when I hear about the increasing divorce rate in the world. My question of ‘why get married in the first place’ can be asked too of business owners who have failed to manage their businesses well  and how they are being rewarded with this easy way out to clear their decks.

In layman terms: ‘Administration’ is a method whereby if you find your business in a tough place of not being profitable and not being able to pay your creditors (although not quite at the bankruptcy stage) – you can turn to professional ‘business recovery specialists’ who will guide you through a path of taking you neatly out of the hot water…and then ‘protecting you’ from your creditors and employees asking for money from you. And then, as a cherry on top, give you the opportunity to open your doors again the next day – doing the same business, but under a different name. (Can you feel the emotion behind my words here?)

The consequences:

  • A huge backlash on small business who lose clients and are lumbered with bad debt (i.e. they are the creditors who have been dedicated to providing the products and services to help the business owner do his business)
  • The employees who have worked hard to help the business owner keep his business going and thriving in the past – don’t get their salaries, get no real notice and get very little in compensation
  • The business owner actually has to ‘start all over again’ because no-one wants to touch him or his business because of how he let them down

So, I guess my message to the business owner who is considering this path of ‘recovery’ is to use a healthy balance of good business sense and being compassionate to the parties involved. I realise that sometimes business owners have to take drastic measures to save their businesses, but my only wish is that they engage their employees in the move and be more empathetic to the impact it has on them and the creditors too.

I may be naive, but I do think that great business leaders consider every one of their actions before they take them and step forwards in the best way to lead others carefully to the other side of troublesome situations.

Marketing the Franchise Proposition

This is one of the main elements that need to be planned out along with the main strategic bits when embarking on franchising your business. The actual franchisee model will dictate a little of how the proposition will be marketed and to whom. What do I mean by this? Well…your marketing plan will consist of two parts:

(a) Brand positioning

This is where you are clear about where your position is in relation to the competition, and what the target customer looks like for the physical service or product that is provided as part of the model (i.e. these are the franchisee’s prospective customers). Why do you have to focus on this? Because this is how the brand will be identified as a whole in the market place and is how you will initially attract any interested prospective franchisees.

As a start-up franchisor: your marketing plan should include the following:

  • a pre-phase 1 step of brand pushing (i.e. before you even start to try and recruit franchisees, take a few months to do some real brand awareness about your service/product, the reputation of the brand..and educate your marketplace about your business. I would advise a minimum of 6 months in staggered proportions in various media.)
  • a preliminary step in marketing to the people that already know about your business (so this may be your current business contacts, client base etc)..and let them know that you have created a fantastic business opportunity and are looking for interested parties

(b) Targetted franchisee recruitment

This is integrated into the above  (even for an existing franchisor) although there needs to be more of a focus on what your message is in your recruitment campaign regarding the business opportunity. My biggest advice on this score is to have a staged plan of recruitment advertising and marketing, leading up to an opportunity for any interested enquirers to come and see you either at a Discovery Day or personally. Interviewing takes up a lot of time, and shouldn’t be rushed, so my advice here would be:

  • Carefully profile your perfect franchisee (in terms of  their identifiable skill set, character and ‘drivers’), so you can easily identify them when they are talking to you
  • Create an enquiry process that makes it easy for prospects to get in touch, but also gives you the opportunity to reduce the time wasters and the mystery shoppers
  • Have a fabulous, eye-catching and attention-grabbing prospectus

By perhaps using a few dates to hold Discovery Days, it will give your sales team some clear time goals to get the prospects in by a certain date and you can plan your recruitment enquiry influx better. Discovery Days are opportunities for people to come and hear a presentation from the franchisor about the franchise proposition and what it can offer them. Make the day interesting and perhaps build in a viable FREEBIE…that will be useful for them when they walk away, like a tool that can be used again, even if they don’t go with your opportunity. You will be remembered forever.

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Marketing is such a touch and go scenario, because of its subjective nature, but if you are responsive and listen really well to the feedback you receive (or don’t receive), you are already a step ahead. Here are some of my top tips which may help you cope:

1. Don’t be too proud to outsource for help

It is easy enough to outsource the preliminary enquiry processes – but make sure they are professional providers and a great ‘face’ for your business. First contact is very important!

2. Only stick with the advertising routes that work

It is expensive to advertise, so make sure you weigh up the payoffs with the cost of the route you choose. Do not continue to advertise in top broadsheets (national papers) when you don’t actually, physically get any response from them! (When you are big enough and able to…then advertising in these papers are more for brand awareness than recruitment.)

3. Think outside the box to find your prospects

Consider the options of looking at Vetfran (ex-military), disability organisations (as long as the disability isn’t a hinderance to operating the franchise), minority group associations (women, ethnic groups etc) and other kinds of organisations that have a ‘listening’ of individuals who are actively looking for alternatives to employment and want to start their own businesses.

4. Plan how you are going to manage filtering people through your application process

Always plan for best case scenario – so plan that 10 franchisees are going to signup in one month and ensure that your resource framework can handle this. If there is one time in a franchisee’s life you don’t want to mess up – its in inducting and welcoming them into your network. Make sure you have the support and training in place, so that all you need to do is ‘flip a switch’ and your systems swing into play. Smooth running is what you MUST aim for. People who don’t ‘make the cut’ need to be handled expertly and professionally…so that they are left with a great impression of how you deal with people as a business. (You never know – they may refer someone to you!)

5. Enjoy the growth and sharing your business with others

Although recruitment can be hard work, enjoy this time of sharing your business model with others, but also make sure you protect yourself in terms of how much you share at each point in your marketing and recruitment. Your adverts and marketing message in terms of the franchise proposition aimed at prospective franchisees must be ethical and wholesome, but attractive and competitive at the same time. Your enthusiasm, passion, pilot evidence and prospectus will be your main selling tools in the beginning – so use them wisely and don’t over promise (a trap you may fall into).

Smart Franchisors: Interview with the End in Mind

Having just finished writing an e -book for people looking to invest in a franchise, I found many things were coming up for me on the franchisor front and I definitely thought it warranted a post on it.

Providing advice and guidance to prospective investors is a really interesting one for me, because I can share some stories and insights to people whose toes curl up when they hear about what can happen if you don’t go into an interview with a franchisor with your eyes wide open and your feet bolted firmly on the ground.

So, my top tips for franchisors when they are interviewing prospective franchisees are:

1.  Be Consciously Respectful

The amount of times I hear of boltchy, arrogant franchisors who admit people into their ‘domain’ and ‘grant’ the person the time of day…man, I could write a book just on that! Of course these people are (generally) in the minority….but bad behaviour travels just as fast as bad news. Stop it in its tracks. Do you how much it takes for that person to be sitting in front of you? Be kind enough to acknowledge that its a big step this person is taking, and that it probably took a lot of courage to be sitting in front of you.

2. Be Aware of Franchise ‘Ignorance’

The franchisor is pretty clear about what the franchising model entails and means in practice, but most prospective franchisees haven’t got a clue. Be mindful of this when going through the proposition with the interviewee…or at the very least give some background to the franchise business model to give the person some kind of frame of reference to compare your discussion to. I use the example of a Head Honcho with Indians vs. Cowboys.

Head Honcho with Indians  = Indians are replicas of the main ‘dude’ so to speak (hence:  Honcho)…and although they carry out the ‘work’ as they are directed to do, they don’t create the ‘system’ or way in which they carry out the work (that is engrained into them as being a part of the Honcho’s crowd) [Franchisor with Franchisees]

Cowboys = generally are a gang of individuals finding their way in the world, guns blaring and behavioural antics alter with how long they have been in the gang. So, they have no real ‘quickstart’ to a system they need to follow..to actually achieve anything quickly. [Self-employed finding their way on their own.]

3. Clearly Articulate How You Make Your Money

I educate prospective franchisees to ask this question and be clear on how the franchisor makes his profit. Why? Because they really need to work out that the revenue structure works for BOTH sides. A franchisee never wants to find a franchise where it seems ‘cheap’, ‘easy money’ and there’s no real responsibility to the franchisor for growth or performance criteria.  A franchisor needs to be profitably in this for the long term and be able to provide all of the support and resource frameworks promised to the franchisee. Please acknowledge the importance of this when interviewing a prospective franchisee – also…this will nip any conflict in the bud early on. As you will know…in a franchisee lifecycle – you will get to the ‘teenage’ phase where they will start to question your value and how much they pay you!

4. Never Slam the Competition

Please please please! As most best practice business professionals will tell you – this is a sure fire way of undermining your position and making you look like Iddy the Idiot. A more professional take would be to actually provide the interviewee with a list of who the competitors are and invite them to investigate those offerings as well. Perhaps it would also be good to highlight ever so politely the differences between them and yourself. (1) This gives the interviewee a heads up on who else is in the market and (2) Gives you an opportunity to be look helpful but at the same time (3) Highlight where your offering fills the gap.

5. Pack in the Punch

When I advise prospective franchisors at the planning stage to ‘pack in the punch’ in the offering – make sure you REALLY do. Franchising is very competitive and if you haven’t put together something that really takes away all of the aches and pains for a start-up business, this is where you will lose out in signing up more franchisees. Yes its important to have  market share, an edge and a compelling brand…BUT…a prospective business owner is looking for a wholesome package that will help in all aspects of setting up a business. So, how can you put more into your offering to put you ahead of the rest of the crowd? You will notice the difference in the interview: a prospective franchisee will just light up when you work through all the avenues you have covered. Basically…he will have made his decision then and there…and it won’t take that much more to get a YES.

6. Remember that Interviewee’s are Interviewing You too

Yes, there is the major element that the person you are interviewing has to meet your strict entry criteria and profile – but don’t forget the tender aspect of you meeting their standards and expectations. You, as the franchisor, are also being interviewed (however subtle that might be). So, even if you did approve of their application….they need to approve yours to be their franchisor!

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All I’m really trying to say I guess is that SMART franchisors recognise the opportunity to really shine and engage a prospective franchisee in the initial interview – but my 2cents worth of wisdom is that you need to be emotionally and professionally intelligent about how you conduct yourself and present the offering in that interview. If it goes badly, you will find that your enquiries start to dwindle (bad news travels fast as I said) and won’t have a second chance to clean up your mess!

So…Interview with the End in Mind. The ‘End’ being bringing on board a franchisee who respects you and has chosen your franchise because of your great offering and professional handling of him during the whole interview process.