Doc Franchise Writings and Ramblings

Often when someone talks to me about franchising they will ask, "So, what are the hot franchises these days?" My answer is usually this, "The ones that most closely align to the new franchisee's personality and passions."

So let me ask, are you one of those who think a franchise’s success is the primary reason to buy a franchise? In other words do you think since they are successful I should consider becoming a franchisee in that particular business, that particular brand?

If you’re looking to become a franchise then you are likely to think just that way.

Don't!

“Hey, if it makes money for others, it’ll make money for me.”

Franchise Opportunities and Your Personality


If you truly want to find long-term happiness in a franchise, it’s critical you match your unique style, your personality, to the franchise’s operating style and that is an extension of the franchise companies culture. Every franchise either begins thoughtfully with a specific personality model in mind or develops one as part of their organizational development over time.

That is, the personal characteristics required for high levels of success regarding the franchise’s day-to-day activities need to relate to, not just your knowledge and skills but also your personality and how well they fit in with the franchise corporation.

Why?

Let’s look at the obvious…you certainly don’t want to make a significant financial investment and time to own a franchise you won’t enjoy. Work, career and business ownership enjoyment all are directly tied to how we define personal satisfaction. Personal satisfaction is not just a functional outcome of the work but a condition of how the process and components of the work/business we are accountable for is managed. Study after study conducted on behalf of franchising verifies that the primary reason for turnover and failures in a franchise is in a specific companies inability to match franchisee's with the culture that permeates the organization.

Let me give you an example.

Let’s say you’re naturally an introvert, no matter how successful a business may be for others, if an extrovert personality is required for success, it won’t be right for you. Being a Sandler Sales franchisee requires significant face time and the ability to execute the companies own process (How To Sell...) to your potential clients. Some may look at the business and think, "I am an executive. And the clients in this franchise business model are similar to me, they too are executives." But if you are not a high social contact person you will hate this business model. And, no, you cannot, in this model shrug these duties off on someone you hire.

You would find the same to be true of direct advertising franchises. You come out of corporate America and the clients in much of direct advertising are business owners and management but if you are not a people person this is a bad fit for you.

Well the franchise company will let me know if I don't fit won't they? No, not all of them use these forms of assessment and many who do aren't trained in either how to read them or their importance. The good news is that many of the best franchises use them but might not take them as seriously as you would want them to.

You’ve got to match your personality and your passions as well as the result, what you want the business to do for you, with the right franchise model. It is NEVER about liking the product or “look of the business”. It is not even enough that the franchise company has a truly button-downed, sure-fire approach.

How to Find a Franchising Opportunity Right for You

If you elect not to use a professional consulting service I would suggest you start by looking at a franchise business from the point of view of your personality.

Assess your behavior. Many behavioral and personality assessment surveys are available and they can assist you to determine your unique personality.

With this knowledge in hand, create a short list of franchises available that you "believe" match up with your personality profile.

A shorter method to this discovery is to use a franchise consulting firm. Many charge very little and some charge their consumer clients nothing and provide highly astute processes. Firms such as matchpointnetwork.com can help you do this effortlessly and immediately, at no cost. The reason it costs you nothing is that franchise companies are more than happy to pay these companies to find incredibly high quality candidates. As a matter of fact candidates that work through companies like www.matchpointnetwork.com have two things that every franchise company craves:

1. Franchisee's that perform at higher levels which translates to more money for everyone
2. Higher success rates for longer periods of time

MatchPoint queries the franchisees within franchise systems and outlines the profiles of their most successful franchisees. This also allows them to only recommend to their candidates the best of the best franchises in any given business category; talk about a time-saver!

Regardless of how you go about your investigation and learning about franchising let me provide a word of caution, don’t rationalize your profile or make excuses such as, “I’m the exception”…you’ll only be postponing the inevitable…a poor fit.

By digging into, "who you are" and how you operate most joyously you produce an atmosphere and process that increases the level of success you will achieve as you consider franchising as an alternative way of living your life and earning a living!

- A Compendium of Info For Franchisor and Franchisee - Ergo Certainly not Exhaustive

A few weeks ago I promised I would develop some thinking about the Franchise Disclosure Document (FDD) previously called the Uniform Franchise Offering Circular (UFOC). Let me clear the air about the FDD in a single sentence as it relates to how I feel about it: The FDD is a significant and important document.

Any franchise professional, franchise attorney, franchise company executive, franchise consultant...even franchisee should agree that it is a significant starting place in your understanding of the franchise you have under your review.

It is so important to me I would suggest you read 3 or 4 FDD's! More on this later.

Franchiser Key Point 1:If a franchise company has someone they believe to be a "hot" candidate and somehow the person drags their feet on the reading of the FDD, you should not shout for joy because they won't have to deal with the significant aspects of the business that might concern them once they are read and revealed. No, you should be concerned because they are taking are not facing up to A) the process of acquainting themselves properly with your concept and B) Operating by their gut which may or may not be in synch with your business model.

Now, to a thinking man, especially someone who revels in details and information, it would be unthinkable that someone would ignore this document. I am sure that it seems ridiculous, given the size of the investment, that anyone would just not pay attention to it.

But, the reason you read the FDD isn't why you might think. The Federal Trade Commission (FTC) does in fact (regardless of what they might otherwise state) evaluate and approve every document. In fact, if you read 4 or 5 of these you realize that 80-90% of the content is identical one to the next regardless of the kind of franchise or brand. Why? Because they all need the FTC's approval. A Simple way to do this is to make sure that the language used by previous approval's is part of your document.

Franchise Candidate Point: You don't read the FDD to determine how the franchise company is attempting to trick you. They're not. They gain nothing by tricking someone into a multi-year business relationship! You read it to understand that particular franchise companies nuances. The document has no legalese and is written in 5th grade English. You can or should be able to understand it.

Franchise candidate even when considering a highly recognized national branded franchise opportunity, you still need to read all the franchisor's documents carefully, yes, every single page. Because you need to understand your responsibilities to operate your business and there minimum level of commitment to train and support your efforts.

If there is anything about the franchise business opportunity that you do not understand (you may be new to the field or to a form of marketing, etc.) you need to have it explained to you by the franchising company (and they will) or a franchise consultant (always a good idea) or maybe a franchise attorney (But it's kind of silly to have someone explain what is written in 5th grade English then charge you $1000-$7500).

There is a huge difference between franchise business opportunities to invest in and, typically those differences show up in the unique business proposition of the operating systems and the expenses of a particular franchise offering. The 15% unique content you find in an FDD is found here and you need to understand it thoroughly.

Franchisee Candidate Point: The terms, conditions, financing, equipment, exclusive territories and price will surely be different, sometimes by extremely wide margins from one franchise to the next. You will find this information within the FDD.

Some words of caution to everyone.

Consultants: Do your job and understand, deeply, the concept of the FDD. You do not have to know every franchise FDD that you might be associated with; particularly those consulting firms that evaluate and have hundreds in their inventory. You do have to be able to talk a candidate through each of the 23 points of the FDD so they know what it means. You also need to have enough knowledge to help them understand why certain language is used, how it protects the system, a part of which they are considering becoming. Otherwise they get stuck in "Us vs. Them" mode and the document appears to be written with the company only in mind and not with the entirety of the franchise system.

Franchise Companies:Every year you have to "re-up" your agreement with the FTC and with the 13 (currently) unique registration states. Use this time to consider ways to simplify the language and create an agreement that has more possibilities to develop "win-win-win" scenarios (You, the franchisee, the end-user). Anything you can innovate that gives your system an opportunity to rise to a higher level of relationship and client concern (franchisee's and end-users are both your client) will provide you with energy and positive momentum. You might consider using representatives within the franchise system to do this. If you have questions about this give me a call. I can help.

Potential Franchisee or Franchisee Candidates The Franchise Disclosure Document is meant to provide you with information relating to:

1. The business of the franchise company

2. The operating system and how it works, is trained and supported

3. Your involvement, responsibilities and expectations

4. The investment and ongoing expenses related to the business in their entirety as understood today.

5. How the franchise company, (with the support and help of the FTC) is attempting to ensure the survival of the holistic and entire organization. Remember, today you are on the outside attempting to protect your right and reduce your risk. But one day you might be a part of the organization. Ask yourself, what rules and regulations do you want the next guy to have to follow so that your business, good name and reputation and ongoing reasonable expectation of success is not diminished?

One last note to those of you looking at franchise disclosure documents, remember 438,000 +/- franchisee's operate in the United States today. They all signed franchise agreements having had to review an FDD or similar document (UFOC). These are not all dumb people. Do yourself, the franchise company, and perhaps the consultant who represents you (especially the consultant) a favor. Do not make yourself look dumb. Don't try and talk anyone into the notion that this document is some evil, diabolical trick to destroy you and your family to the 5th generation. Along those same lines you need to know that no one, operating a franchise in the USA (or Canada) goes to their place of business each day and opens up the FDD, reads it, so they make sure they don't brake a rule. The document information is common sense people. Owning a franchise, regardless of what goofy thing you hear is simply another way of owning your own business. Only you and your crew can ensure your success because you are the ones daily who are on the firing lines. The FDD simply gives you the parameters within which to operate that potential success.

Make the FDD work for you but then put it on the shelf. You'll be opening it again about 6 months prior to deciding whether you wish to re-sign your agreement! And that will be 3, 5, 7, 10, 12 years down the line.

John is a 26-year professional in the franchise industry. He has been a franchisee, a franchise executive and an advocate/consultant to the public and to dozens of franchise companies. He is the founder and managing partner of Wilson Associates and can be reached at docfranchise@gmail.com. or direct office 480.838.1641

Life has a way of manipulating the circumstances and the conditions. Often executives and those vulnerable to economic downturns (finance, technology, real estate, mortgage industry, and manufacturing come to mind) turn to consideration of business ownership.

I'm often asked when I speak to groups, "Are there some hard and fast rules of doing a proper examination or investigation of the various kinds or brands? Can you better understand the business if you do certain things?" The answer is mostly yes. The more you actually know the more confident you are once you make a decision.

But there are dangers as well. Often we study so much the line becomes blurred between what is factual and actual and what is someone's overly blustered and inaccurately stated opinion or random thoughts.

Here are some things I recommend to you that you DO:

1. Investigate franchise opportunities by getting first-hand information. By visiting a franchise trade show or contacting a franchise consultant or broker you will get direct information; point A to Point B. Don't start by studying the fringes.

2. Talk to the present owners of the franchise. Ask them how pleased they are with their decision, are they progressing as anticipated, what were the surprises and would they do it again. Inquire if the franchiser is responsive to their needs and whether the training was adequate. It is important to determine the integrity of the franchiser in following through on promises to provide strong initial training and to supply immediate technical assistance when problems arise. Find out what the top values they are receiving as a franchisee.

3. Consult professional and seasoned franchise advisers as opposed to just anyone who is willing to provide an opinion. I would include a small business CPA amongst your advisors. If you do not have one ask the franchisees themselves. On the legal side you will find most franchisee's have not used a lawyer simply because franchising is so highly controlled and regulated. If you feel you want a lawyer make sure it is truly a franchise attorney. Franchise law and business law are Venus and Mars. Don't pay your attorney to learn franchise law by having him come in and make you look like an idiot to the franchise companies because they want you to demand changes that cannot be made.

4. Read the Franchise Disclosure Document (FDD) with understanding. This is where having a franchise consultant can be a great help. A seasoned professional will be able to let you know what is standard, boilerplate franchise language and what you need to be sensitive to. Most often you need to be sensitive to Items 3,4, 5, 6, 7 and 19 and recognize the rest relates to general business standards.

There are exceptions however. The good news is that an FDD is written in fifth grade English and is free of all legal jargon. You will be able to read it and understand it. That "easy-to-read" too is a mandate by the Federal Trade Commission (FTC) and must be adhered to by the Franchise companies when they develop their documents. And, just so you know, the Federal Trade Commission requires all franchisers to supply prospective franchisees with a FDD at least 10 days before they are presented with agreement documents.

I will create an entire blog to the topic of reading and FDD soon.

5. Use a franchise consulting service. Franchise consulting services earn their keep by doing two things that make the life of a potential candidate easier. First, they evaluate franchise companies. It is critical for the consulting firms to understand the level of success and the profile of the best franchisees within a particular franchise companies system. How else can they provide that company with the right potential candidates? You can see how this serves your interests as an investigant.

Secondly, they also assess the candidates to determine their strengths, skills, education, prowess, passions and interests. The combination of those assessments creates powerful synergy for success. With our technology today there is no need to study thousands of franchises to reduce it down to a few. Allow the experts to do what they do best and assist you in your efforts to find just the right company.

6. Compare other franchise systems in the same field. Look for franchises that are solidly managed, well financed, and are positioned in a growth industry. Investigate any regional franchises that are doing well but have not yet gone national in their distribution. Remember, the biggest is not always the best. The biggest franchises may also reduce your chances of success and growth because the territory and sites available are limited. Look for businesses that have a record of success that have recently begun to franchise. Remember, the franchise could be new but the parent business could be 3, 5, 10 years old or more and be rock solid.

7. Evaluate yourself and see if franchising is really for you. Franchisee, regardless of what you think you read in an FDD or franchise agreement is simply another name for independent businessperson. Nobody from "Headquarters" shows up to open your doors of business each day. If it is going to get done YOU and YOUR staff who are the ones to get it done.

Most people aren't ready for business ownership mentally or emotionally...at any level. They can't imagine paying a fee to someone so they can "maybe" make a living. Can you see how if you start with that thinking you aren't even in the same game as a business owner?

No, if that is you, come back once you realize what business ownership can provide to you.

If you are not ready for franchising I guarantee you will suck at being a fully independent business owner where everything is your responsibility (Operations, Training, Hiring, Marketing, Sales, Administration, Finance, Accounting, Technology, Visionary Assessment, and MUCH more). Franchises provide you the guidelines for all of that and much more without requiring you make key decisions in areas you are not expert at.

8. Count the cost associated with entering into the business.I was never concerned with anything about the finances but three things: Do I have the liquid capital to invest in this business that I deem as reasonable and prudent for my life situation? Will it provide me with the kind of living I would anticipate based on the investment level and my personal needs? Will I have a salable asset when the time comes for me to exit the business and will I be pleased with that potential selling price? Most of the thinking processes need to be on the first item. Only put out in liquid capital what you want to afford and only sign off on a business where the full investment is in your comfort zone as well. Most businesses have a financeable component plus the cash needed. Make sure you understand them both.

9. Check the history and experience of the franchise's officers and managers. The FDD in Item 2 contains a disclosure of all officers, their experience, business history, criminal or material civil litigation currently pending or completed against the franchiser involving any alleged allegation of fraud, misrepresentation or any violation of the franchise laws. This explanation goes back 10 years and includes any business dealings they have had that relate to the current business. If you find one with little or no litigation, mediation or arbitration it tells you the officers of the organization view business practices on a personal level and are not prone to throw lawyers at you when disagreements occur...and they will occur.

10. Research, research, research. Buying a franchise is a significant life decision. It is up there with Marriage, Buying a House and Having Children. The difference is you didn't take nearly as much time or concerted effort as you will on this one. More good news is that all the information will be delivered to you. The more professionally you go about your investigation the better your decision is likely to be and the less risk you will be exposed to. Ultimately it is your decision to choose or not choose a business. At the end of the day make sure you have as much personal confidence your choice will provide your expected potential outcomes.

Here are the things I recommend that you DON'T:

1. Shotgun approach to your investigation. Keep things in order. Understand the business components of the business, within their categories, thoroughly. Review the market the business is in. Review the FDD and your relationship with the franchise company. Go through a high level discussion on training, operations, marketing and sales. Spend time with franchisees to get an insiders look at the business. Take what you've learned and assemble it into a plan and perhaps a business proforma.

2. Overextend your finances. Establish a budget prior to your investigation. The budget should be based on your comfort level of investment as well as your comfort level relating to how much credit you are willing to extend. You may be able to afford 2 or 3 or 5 times more than the actual costs associated with a business but the key is what you are willing to extend yourself to do. By the way, just so you know, the more established a franchise, the less risk it "might" carry but the higher the investment needed. The McDonald's, Kentucky Fried Chicken and Pizza Huts now require steep investments. Even some well established home-based franchises may have royalty fees that are steeper because they've earned the privilege of higher earnings for the corporation. Always plan for more expenses than you think you'll have and typically in a start up franchise that might be $10-50,000 more than stated. This is where talking to the franchisees helps.

3. Skip consulting the professionals. Skimping on a good small business CPA and their fees or a seasoned franchise consultant will deprive you of critical information. By the way, most franchise consultants cost you nothing. They are paid by the franchises. You pay not one penny more than you would had you gone directly to the franchise.

4. Take just anyone's word. It's your risk and opportunity. Learn of current marketing trends within industries that indicate potential opportunities or weaknesses such as price wars or huge fluctuations in raw material costs. Also, try to know how economic factors and changes in the society (e.g. aging population) could potentially stimulate or affect any specific industry. I do not care if Uncle Sal once owned "one of these." No he didn't and you are not Uncle Sal. Keep it objective!

5. Settle. Get the business that will provide you with the level of satisfaction you desire. The business you want may be a compromise from your passion but ultimately will satisfy your needs both professionally, personally and financially.

If you are looking for a business and franchising is a good place to start, I hope you find this general information of interest. My firm works with a number of franchises and profiles and reviews candidates on a daily basis that we present to them. Give me a call and let me know if Wilson Associates can be of service to you individually.

John is a 26-year professional in the franchise industry. He has been a franchisee, a franchise executive and an advocate/consultant to the public and to dozens of franchise companies. He is the founder and managing partner of Wilson Associates and can be reached at docfranchise@gmail.com. or direct office 480.838.1641

Good Morning World! I’m covering some overarching advice today as I believe small business owners and marketers need to think strategically about social media use, perhaps before they ever start to discuss tactical use.

1) Integrate – Don’t treat your social media activity as something separate from your other marketing initiatives. Feature links to your social media profiles in your email signature, on your business cards, in your ads, and as a standard block of copy in your weekly HTML email newsletter. In addition, make sure that links to your educational content are featured prominently in your social media profiles and that Facebook fan page visitors and blog subscribers are offered the opportunity to subscribe to your newsletter and attend your online and offline events. Make your social media profiles a part of your address copy block and you will soon see adding them to all that you do as an automatic action.

2) Amplify – Use your social media activity to create awareness for and amplify your content housed in other places. This can go for teasing some aspect of your latest blog post on twitter or in your Facebook status, creating full blown events on Eventful or MeetUP, or pointing to mentions of your firm in the media. If you publish a bi-weekly newsletter, in addition to sending it to your subscribers, archive it online and tweet it too. You can also add social features to your newsletter to make it very easy for others to retweet (tweetmeme button) and share on social bookmark sites such as delicious and digg. I would also add that filtering other people’s great content and pointing this out to your followers, fans and subscribers fits into this category as it builds your overall reputation for good content sharing and helps to buffer the notion that you are simply broadcasting your announcements. Quality over quantity always wins in social media marketing.

3) Repurpose – Taking content that appears in one form and twisting it in ways that make it more available in a another, or to another audience, is one of the secrets to success in our hyperinfo driven marketing world we find ourselves. When you hold an event to present information you can promote the event in various social media networks and then capture that event and post the audio to your podcast, slides to Slideshare, and transcript (You can use Castingwords for this) as a free report for download. You can string 5 blog posts together (like this series) and make them available as a workshop handout or a bonus for your LinkedIn group. Never look at any content as a single use, single medium, act.

4) Lead generate – So many people want to generate leads in the wide world of social media, but can’t seem to understand how or have met with downright hostile reactions when trying. Effectively generating leads from social media marketing is really no different than effectively generating leads anywhere – it’s just that the care you must take to do it right is amplified by the “no selling allowed” culture. No one like to be sold to in any environment – the trick is to let them buy – and this is even more important in social media marketing. So, what this means is that your activity, much of what I’ve mentioned above, needs to focus on creating awareness of your valuable, education based content, housed on your main hub site. You can gain permission to market to your social media network and contacts when you can build a level of trust through content sharing and engagement. It’s really the ultimate two step advertising, only perhaps now it’s three step – meet and engage in social media, lead to content elsewhere, content elsewhere presents the opportunity to buy. To generate leads through social media marketing, you need to view your activity on social sites like an effective headline for an ad – the purpose of the headline is not to sell, but to engage and build know, like and trust – it’s the ultimate permission based play when done correctly.

One glaring exception to this softer approach for some folks is twitter search. I believe you can use twitter search to locate people in your area who are asking for solutions and complaining about problems you can solve and reach out to them directly with a bit of a solution pitch. People who are talking publicly about needing something are offering a form of permission and can be approached as more of warmed lead. The same can also be said for LinkedIn Answers – if someone asks if “anyone knows a good WordPress designer”, I think you can move to convincing them that you are indeed a great WordPress designer.

5) Learn – One of the hangups I encounter frequently from people just trying to get started in social media marketing is the paralysis formed when they stare blankly at twitter wondering what in the world to say. The pressure to fill the silence can be so overwhelming that they eventually succumb and tweet what they had for lunch. If you find yourself in this camp, I’m going to let you off the hook – you don’t have to say anything to get tremendous benefit from social media participation. If I did nothing more than listen and occasionally respond when directly engaged, I would derive tremendous benefit from that level of participation. In fact, if you are just getting started this is what you should do before you ever open your 140 character mouth. Set up an RSS reader and subscribe to blogs, visit social bookmarking sites like BizSugar and delicious and read what’s popular, create custom twitter searches for your brand, you competitors, and your industry, and closely follow people on twitter who have a reputation for putting out great content. And then just listen and learn. If you do only this you will be much smarter about your business and industry than most and you may eventually gain the knowledge and confidence to tap the full range of what’s possible in the wild and wacky world of social media marketing.

John is a 26-year professional in the franchise industry. He has been a franchisee, a franchise executive and an advocate/consultant to the public and to dozens of franchise companies. He is the founder and managing partner of Wilson Associates and can be reached at docfranchise@gmail.com. or direct office 480.838.1641

Most likely if you are over 30 and live in the USA, you have lived a life that has been in support of franchise chain businesses.

I recall the drives between my house in the Chicago area down to my grandmothers' in St. Louis and Terre Haute, Indiana and counting all the Howard Johnson's and all the Shell Stations and all the Aamco Transmission shops in the towns as we passed through. But mostly I waited for the "big 3," McDonald's, Dairy Queen and A&W Root Beer stands! Reflecting back most of those succeeded (at least for as long as they wished); some of them failed, but all of them fought passionately for the my attention.

Today I realize there are hundreds of factors that dictate a franchise’s success. Master your franchisee training but fail to maximize the value of your territory and that franchisee is in for a world of hurt.

This leads me to my point. The branding of any franchise continues to be one of the most essential ingredients in a franchise’s profitability; from the corporation down to the single unit.

I can still remember walking into an Applebees in Long Beach for the first time. There was just something authentic about it. It "felt" like the local or neighborhood bar & grill. Clearly, someone in their corporate offices had gotten all the small details right and the result was a memorable franchise experience.

Today I realize that branding is often the difference between whether a franchise rises into the public consciousness or if that business, as good as its products and service may be, drifts away unsuccessfully into oblivion.

Janet Muhleman, the president of re:group, has gathered together her belief set on branding in the latest edition of Franchising World. Here are her seven tips to improve your franchises branding:

1. Listen to your customers

2. Tell your brand story, what you believe in, why you do what you do.

3. Create a brand personality that people relate to and want to engage with.

4. Make believers out of your franchisees and their front-line staff so they can live the brand.

5. Engage your customers consistently and openly at every possible touch point.

6. Measure your performance and be prepared to embrace change and innovate to stay current and relevant.

7. And finally, as you listen to your customers also remember to be genuine and lead with your heart.... Now, re-read - Return to No. 1!

Branding is local for most businesses in North America. You have to convince YOUR customer (and not just the universal position) of who you are and what you do...so stop the self defeating self-talk about the company and what they should do. YOU OWN YOUR MARKET.

I welcome your thoughts on this topic - Do you have anything else to add?

John is a 26-year professional in the franchise industry. He has been a franchisee, a franchise executive and an advocate/consultant to the public and to dozens of franchise companies. He is the founder and managing partner of Wilson Associates and can be reached at docfranchise@gmail.com. or direct office 480.838.1641

This is a continuation of yesterdays article, "Franchisors, Here's a Criteria You Might Have Missed!"


Due to the tragic problem of ignorance and passivity in our world today, I've been extolling the benefits of reading. Yesterday, we talked about number one: reading sweeps the cobwebs away; it expands us. Today, I'll note three additional benefits.


2. Reading increases our power of concentration.

Through the discipline of reading, the mind is programmed to observe and absorb. It replaces the "Entertain Me" mentality with "Challenge Me." The eye of a reader is more observant, alert, probing and questioning.

After I left home for the last time I found myself in a house full of party animals. Since I lived with just my mom I had become comfortable with solitude and with solitude I found reading. One day, when the house we rented was uncharacteristically quiet I lay on my bed and began reading a book my sister had given me, In His Steps by Robert Sheldon. As I read it was changing my life. Suddenly I realized I was being watched. One of my roommates was at the door staring at me. Finally he spoke up, "So I guess this is why your mind is so much calmer than the rest of us huh?" It struck me that he was probably right.

3. Reading makes us more interesting to be around.

Small wonder the boredom factor in social gatherings is so great! After you've run through the weather, the kids, the job, and your recent surgery, what else is there? Being a reader adds oil to the friction in conversation. Furthermore, it opens to the businessman new avenues of approach to the outside world. It helps to meet the inquisitive and those needful of our products and services on their own ground or expansion of places they wish they could go. We need to read widely, including some periodicals as well as the classics.

4. Reading strengthens our ability to glean truth from Inspired Reading.

In the Bible, in the New Testament section there was one of Jesus followers. His name was Paul. Paul was a late player to the "Party of Jesus" but become one of its greatest advocates. If you have any sense of the Christian faith at all it most likely has much to do with Paul. He was what you might call a true warrior. At one point Paul's faith in Christ had gotten him tossed in the pokey. Only this was serious. This was probably going to be it for Paul. Paul was in the dungeon awaiting death, he asked his friend to - bring the cloak which I left at Troas . . . and the books, especially the parchments. - 2 Timothy 4:13

The "parchments" referred to the sacred manuscripts, copies of what we think of as Biblical Scripture.

But what about "the books"? What books?

Obviously, those volumes he was reading prior to his imprisonment. Right up to death, that capable spokesman for God - that master of logic - was reading. He certainly would have agreed with another great Christian of letters and of reading John Wesley:

Either read or get out of the ministry!

I think the same holds true of businessmen, of franchisees especially. We have the opportunity to be on the cusp of our market segments but we can lose that edge if we don't keep up. Franchisors you need to create a preferred reading list for your franchisees. You need to have a book of the month club.

Can't find the time? Come on, now . . . not even fifteen minutes? Don't know where to start? How about the library? Most every town has one. Heck, go to the second hand book store. They're filled!

They probably even have books with pictures in 'em. (For your kids, right?)

...and I hope I'm sending this to the ones who will read it and comprehend how powerful it is!

The three R's have stood the test of time as reliable criteria for a dependable education. They are poised like disciplined sentinels against one of man's greatest enemies: ignorance. The original blocks of granite, unimpressed by educational styles, unmoved by change, these three solid friends are trustworthy to the end. Like salve on an open sore, they reduce the fever of panic, giving stability when so many voices demand obedience or other voices, just as demanding elicit panic.

But there is a fly in the ointment . . . one chunk of granite is beginning to crack . . . the sentinel is getting sleepy. The enemy has found the chink in our armor. He has discovered that the first "R" is up for grabs in the twenty-first century. And he is smiling.

"Send me a man who reads" is no longer the clarion call of industry or management . . . or sales, for that matter. Nor is the professional person necessarily known today, as he once was, for his breadth of knowledge . . . and that includes franchisee's and franchisor's.

Few current tragedies pain me more. It is now a fact that one half of the students who graduate from college never read another book. Even though a Ph.D. is virtually obsolete in five years unless he or she continues to read, many of them opt for an easier out. It would shock us all if we knew how little the person reads who defends us in court or does surgery on our bodies or gives us financial counsel. Aside from daily doses of TV Guide, a chuckle at "Peanuts" on Sunday, and a quick skim over the sports section, many an American never cracks another magazine or book.

It's amazing! Before kids are in school, they can give you the day, hour, and channel for a dozen different TV programs, but have trouble struggling through Dick and Jane Play with Spot into the second and third grades. Little Leaguers can spit out the batting averages, RBIs, and stolen base totals for each of their favorite baseball pros (er...so can I for that matter) . . . but stick a copy of Tom Sawyer in front of them (or their parents!) and boredom strikes like summer monsoon lightning in Phoenix, Arizona. A growing number of California high school grads have trouble comprehending basic application forms for employment.

Enough about the problem; let's consider the benefits. I can think of four and will give them to you in two parts. Here's the first:

1. Reading sweeps the cobwebs away.

It enhances thinking. It stretches and strains our mental muscles. It clobbers our brittle, narrow, intolerant opinions with new ideas and strong facts. It stimulates growing up instead of growing old.

Francis Bacon's famous rule is so true, so good:

Read not to contradict or confute, nor to believe and take for granted, nor to find talk and discourse, but to weigh and consider. Some books are to be tasted, others to be swallowed, and some few to be chewed and digested.

Reading expands us. It scratches those itches down deep inside. It navigates us through virgin territory we would not otherwise explore. Tomorrow I'll share three additional benefits. Until then, try reading something expansive!

Part of the challenge many franchise organizations have is that the franchisee's they have do not even review the documents, the training's nor the many magnificent business tomes that would enrich their experience and create greater awareness and savvy for their chosen work.

Until next time, someone out there pick up Greg Nathan's paperback, The Franchise E-Factor. You'll be better for it.

I'm often confronted with people who have had relatives and friends who had made attempts into business, some with a more entrepreneurial bent into their own, independent business and others that became franchisees. If I am presenting them with an opportunity in franchising most invariably the acquaintance had a bad experience or was in the midst of one. Typically after a long and protracted exposition on this person's accomplishments, skills and education a question follows relating to what happened.
I have no response about the person because hearing someone's monologue about someone they know, like and perhaps admire is never the whole story. What I will do with them is provide them with components that I believe every business person must possess in an attempt to get them to do a gut check to see if they have these or have displayed them in the past. I will tell you without them and you will have a challenge succeeding. Here they are:

Are you a decision-maker?: I put candidates through a process sale and I make them follow each step. I do this to determine A) Can they follow a system/instructions and B) Will they come to conclusions about the homework they complete. Can they make decisions. In small business decisions constantly need to be made, and many times you don’t have the luxury of time to digest all the information you would like in order to do it. You will have employees and vendors who will look to you to be confident and timely and provide the resources necessary to accomplish the objective set forth in your decisions. Are you a decision maker or do you over-think and procrastinate your way to nowhere?

Do you have learning and adaptation capacities and some basic business skills?: There are so many skills critical to business success–sales, marketing, accounting acumen, communication, delegation (NOT abdication) and leadership come to mind. You must be able to execute a daily game plan that translates into a monthly strategy and into a quarterly development and then read what just happened. The ability to learn and adapt is a trait some have and others simply do not. The franchise system provides you with the 90% solution but there is always real life and it requires your ability to adapt and use what you brought to the table in order to create the right response. In the military you are taught to start and finish a task by understanding the steps to the end game. They are taught a code of conduct that establishes their baseline, and on top of that they’re taught their military occupational specialty, leadership development, and other skills that they can lean on in business. Hopefully in your business background you had similar experience. If so, a franchise or small business ownership situation will tax that training, skills and learned responses.

Do you persevere or procrastinate?: Every business owner should realize that between successes and accolades there are dark days. Much of this foreboding occurs right at the outset, when you are a brand new franchisee. Do you have the mental toughness to stick it out? Are you a complainer? If so, do NOT become a franchisee. Just don't. Stop now. I mean it. You need to see the situation for what it is; a current condition that has solutions and you must determine you, your resources, skills and presence of mind are bigger than the situation and you will do what it takes to succeed.

Look if owning a business was an easy decision to make, everyone would do it, but being the boss isn’t for the faint of heart. Frankly, most people never get out of the blocks because they want life laid out for them and somehow they feel paying a fee means someone will just turn on a cash machine for their paltry efforts. I hope this isn't you.

A veteran franchisee understands that a firm and focused desire to succeed is critical to any operation. This means defining the goal and the primary milestones or objectives in accomplishing that goal–and learning to keep your focus as you continue to strive for that goal even when you face unforeseen obstacles or impediments.

There are many great franchises out there. Some have amazingly well put together strategies, training, and business systems. But businesses are driven by people with vision, skills, perseverance and determination. Is that you? If it is then get on board, daylight is wasting!

John is a 26-year professional in the franchise industry. He has been a franchisee, a franchise executive and an advocate/consultant to the public and to dozens of franchise companies. He is the founder and managing partner of Wilson Associates and can be reached at docfranchise@gmail.com. or direct office 480.838.1641

Owning a franchise doesn't qualify you as a better entrepreneur. What might be the things that provide you with the right foundations to succeed in your business and other businesses in the future?


A good friend and franchiser that I know told me recently, "John, we're in the business of finding already qualified franchisee's or successful multi-unit business owners and putting them into our business. You'd be doing us and them a favor if you could point out the things that create the best-looking franchisee's; someone we and other development franchises and Master Licensee's would be attracted to.

This is my first attempt at it. It is based on my years as a Covey Certified Trainer. That training, though somewhat faded through the years has always stuck with me. I've found that a person can rarely handle more than 5 or 6, maybe 7 steps in a process or strategy (though many are broken down into many further subsets it is a great place to create top of mind memory). Besides, if most franchisee's would get just 2 or 3 of these right they'd improve their business 100 fold.

The second component of this was my own personal experience and hundreds of hours of discussion with other multi-unit and area development franchisee's as well as a few Master Licensee's. Their revelations as they moved along the maturity continuum has been revelatory.

1. Create and nurture a positive relationship with the franchiser.

The fact is that a franchisee only benefits from the relationship with their franchise company if they realize it is symbiotic and fraternal. You got into this for your definition of "the long haul," and they brought you into their system in the hopes that you would be a value to the brand. Start with realizing that creating unity will serve your personal purposes more fully than constantly driving wedges between the two of you.

2. Walk in their moccasins a few miles on a regular basis.

It is natural when things are not going our way to aim our scorn and criticism at the big target, the franchise company. But, you need to be mature enough, bright enough, and for the sake of point 1, intelligent enough to realize understanding their position and perspective will help feed the mutual benefit paradox more than simply aggravating them and your own nervous system by another trip to the "whine" bar.

In the midst of pressure I've often watched as franchisee's revert to a completely and fully non-tenable position, "Franchiser YOU got me into this! YOU fix my problem." No! First, no matter what, just like you don't want the government owning companies or running health care (and NO! You don't if you ever want a car that runs or not have to wait 6 months to get into the doctors office!) you do not want to be even more beholden to your franchiser. Secondly, it's your business! You are in business for YOURSELF just not by yourself. They system works best when the franchiser coaches and not acts as partner/operator with you. Every franchise should have a huge sign at the entry of their business opportunity, "No Childish behavior tolerated!" Act as an independent business person and be proactive relating to your business issues.

3. Use the benchmark tools your franchise system provides - benchmark against success and NOT failure!.

If you are in trouble you do not need to be comparing yourself to the other losers in your system or similar systems. Spending time on BlueMuaMua.com doesn't help your situation. Review your systems successes regularly. Check with them to determine what action steps they've taken in order to ensure their successes. Adapt winning business strategies to fit your businesses needs.

4. Take every opportunity to be involved in your franchises gatherings, conventions, meetings and training's.

Commit to being a part of discovery and mentoring in your franchise system. There is always someone who needs your help (not your whiney) and there are always great business solutions shared or available in meetings. Take copious notes. Ask for clarification. Redundantly resound all those aspects of the meeting that touched off positive thinking processes within you and blow off the negative. Take the high ground and use it to your advantage.

5. Be a source for affirmation and solutions - Eventually you will need to offer your skills and talents to your franchise system

Look, it's obvious that a new franchisee enters their system more needy at the start. That's to be expected. But you should also come into the system realizing, (again) this is YOUR business - YOU open the doors every day - YOU pay the bills (everyday) - YOU hire and fire and YOU benefit from the quality of your ability to absorb solutions. for the franchisor’s support. Ultimately, (here is a lesson in walking in their moccasins) the franchise companies prays your involvement in the system makes the system that much better. That takes your involvement. It takes you moving from diapers (deep needs assistance) through training pants (I can walk and feed myself thank you) to maturity. The goal is maturity.

6. Be a systems based franchisee and not a talent pool slave.

Most franchises have employees (though, admittedly, not all) And, though you hire for success, never abdicate the success of your business to the people within it. Franchising sets itself apart, regardless the market, product or service offered by the franchise system. Revert back to that system, which includes employee, human resource and management policies and make sure that the system is adhered to in the face of pressures by the individuals to change the business. Often sadly, people will come and go in your business. The business itself must live and thrive! Stay the course of the business system.

7. Be a positive and shining light in the community where your businesses live.

Your business, and its physical presence should create warmth and a smile to the residents of that area. What do you do in order to win their hearts? What are their concerns? How do you marry your business to their interests; their work; their families and their success as a community? You want better employees? Be viewed as a place where good attitudes, good responses, good works and deeds and good things (to be interpreted as things I as a member of this community value) happen. Find time to sponsor, to donate and not just money and things but make sure that your face and that of your employee team, even your personal family are given to do good things.

You wish to be in control of your business? I want that for you. You want to grow? You should! You want to be viewed as successful? Then take positive, affirming steps. Listen, Learn, Ascribe yourself to those who are successful. Take control by acting like the owner of your franchise business. Take responsibility for it's successes and figure out how you can prevent going back through failure again. Hopefully these 7 things will give you a basis for that success. - impacting your own franchise units, the franchisor, and other franchisees is a sure-fire strategy for your current and future successes.

John is a 26-year professional in the franchise industry. He has been a franchisee, a franchise executive and an advocate/consultant to the public and to dozens of franchise companies. He is the founder and managing partner of Wilson Associates and can be reached at docfranchise@gmail.com. or direct office 480.838.1641

The proliferation of B2B franchises - service based franchises - coaching and consulting franchise opportunities has created a whole new category and level of need for financing.

It's been hard enough if you were a capital based franchise (we need build-out, equipment, vehicles, etc.) For a time it seemed all small business capital had dried up. It is a bit better but not a lot.

Today, non-capital intense businesses whose primary needs are working capital, capital for growth (more territory, expansion of marketing efforts, etc.) and only minor capital expenditures compared to manufacturing and retail types still may require capital in addition to their candidates capabilities.

Where do they go? Where does anyone go? Are there alternatives?

Before you run out and begin your search for capital, you may want to consider an approach that many businesses — particularly start-ups and small businesses that may not yet qualify for loans or be able to attract venture capital — have used with more than a little bit of success. It's called bootstrapping. Bootstrapping or booting refers to a group of metaphors that share a common meaning, a self-sustaining process that proceeds without external help. The term is often attributed to Rudolf Erich Raspe's story The Surprising Adventures of Baron Munchausen, where the main character pulls himself out of a swamp, though it's disputed whether it was done by his hair or by his bootstraps.

Today we refer to bootstrapping and it means finding money and resources by any means possible, including begging, borrowing, bartering, sharing, and leasing everything a company needs.

In short, bootstrapping is guerrilla financing.

So, who bootstraps? Many companies do. In fact, some estimates put the total at 75 to 85 percent of all start-up businesses. Three fundamental rules for effective bootstrapping are

• Hire as few employees as possible. For many companies, employees are the greatest expense. When you add up salary, benefits, overtime, and other employee-related expenses, it doesn't take long for any budget to feel the pinch. Bootstrappers avoid this pinch by hiring (and paying) as few employees as possible.

• Lease, share, and barter everything you can. No, you don't have to pay cash for everything that you need for your business to run. Many companies share facilities, equipment, and even employees with one another to spread out their respective costs. An increasing number of firms also have discovered the wonderful world of bartering, the trading of goods and services to other companies in exchange for the goods and services that are needed.

• Use other people's money. Why use your own money when someone else will let you use his or hers? We're not talking about getting a loan, we're talking about convincing a vendor to allow you to pay 30 or 60 or even 90 days after you receive your goods from them. Or, on the other hand, obtaining payment from your customers before you deliver their goods or services. In each case, you have an opportunity to use someone else's funds to your advantage — for a while, at least.

Some of the more common approaches to bootstrapping are:

• Seeking funds from friends and family.

• Getting a home-equity loan.

• Offering equity to employees and vendors in lieu of salary or cash payments.

• Bartering for goods and services.

• Tapping your credit cards.

• Convincing vendors to accept extended payments.

• Starting your business part time while working a full-time job.

• Getting an extra job.

• Working from home or in your garage.

• Sharing offices with another company.

• Encouraging customer financing (deposits and early payments).

• Looking for angel investors.

• Pooling founders' savings.

Although the need for bootstrapping tends to go away as a business grows and becomes more established — and therefore becomes more attractive to conventional lenders and investors — any company, no matter how big or how small, can benefit by applying bootstrapping techniques in its day-to-day financial activities.

One of the greatest dangers as businesses become more established is the growth of overhead — the costs of facilities, administrative personnel, equipment, utilities, office supplies, furniture, and so forth — at a rate far faster than the growth of a company's sales. This is a recipe for poor profits, sluggish growth, and loss of competitive edge.

Bootstrapping can help keep your company lean and mean while keeping overhead in check and profits high.

John is a 26-year professional in the franchise industry. He has been a franchisee, a franchise executive and an advocate/consultant to the public and to dozens of franchise companies. He is the founder and managing partner of Wilson Associates and can be reached at docfranchise@gmail.com. or direct office 480.838.1641

The odds are against success. The numbers don't lie. The challenges facing the operations of a larger small business development compared to a smaller business component is significant enough that it is best to start smaller, ensure your grip on the business model and then grow from there.

These are all expressions I have used. For the most part I still believe these...IF we were talking 5 years ago I would stand by them, in front of them, behind them and arm myself on all of the information that supports them.

Today is a different day however.

Reading newspapers, listening to the radio, or watching TV today is like drinking from a fire hydrant. There are massive changes in the conditions of our economy. The changes mean franchise companies, particularly new and emerging franchisor's need to rethink their sales and development strategies.

Here are some recent headlines:

* Economy Weakens as Deeper Job Cuts Materialize
* Manufacturing Shrinks Most in 26 Years
* U.S. Slips into a Recession
* Jobless Claims Skyrocket
* World Markets Slump on Economic Fears

In a discussion with several franchise executives recently, the question surfaced, "How can we expand in this market?" I quipped that I was excited about franchise growth in the next few years. I explained that the rules have changed and that smart franchise companies will capitalize on the current economic climate and trends. When my optimism was challenged, I shared why I feel this way.

Why be optimistic?

In times of great upheaval come opportunities. If you read past the doom and gloom I am sure you've read that statement as well. Millionaires were born out of the decade that followed the Great Depression. While it is true that the Crash of 1929 brought unprecedented misery and economic hardship to many, during the same period opportunities were created for the creative, quirky and fearless. The worst course of action as that time exhibited is to do nothing, go about your business and not create a strategy that doesn't recognize the current reality.

While caution should be exercised in positions of leadership, don't ignore the obvious. American workers are going to have to change their lives dramatically. Many people - out of necessity - will have to consider starting a new business, purchasing an existing business, or following the more prudent path of franchising as a route to a new career. Their jobs have, literally, disappeared and reality has finally slapped them so hard that they realize things will never be as they were; security will never be in a company, a position, in a career path again!

On the financing side of the equation while the days of freely tapping home equity and 401(k) plans are gone, many individuals still have the financial resources and/or the ability (courtesy of the U.S. Treasury) to qualify for the recapitalization of existing SBA loan programs to fund their startup. There is money to be had.

Back to the Franchise Companies

The biggest challenge for emerging franchisors in these uncertain, yet dynamic, economic times is how to fund their franchise expansion. Franchise companies face several challenges in today's economic environment:

1. Lead costs are above historical averages.
2. The cost of franchise support is higher as well.
3. A poor choice of franchisees will kill your future growth.

All of these things make Master Licensing and Area Development more attractive growth strategies for newer franchisors who lack the ability to fund an aggressive, rifle-shot franchisee recruitment program and build the infrastructure required for ensuring proper progress and success for new and individual franchisees.

The more responsibility a franchise company must take on to secure the future for the masses of their franchisees, the greater downward pressure exerted on front-end expenses before revenues are produced.

The inability to invest in ubiquitous operational support in the first two years of new franchisee operations is the leading cause of franchisee failures, which in turn cripples the future franchisee validation necessary for recruiting new franchisees. This dynamic creates a death spiral. Emerging franchises who attempt to grow and develop their business from a centralized point create more risk for themselves and their franchise system.

Master Licensing (ML) and Area Development (AD) alleviate significant amounts of the cost burden associated with newer franchise systems. By definition ML's and AD's take on the key responsibilities and costs for providing training and support. With an AD strategy in place:

1. The bulk of the franchisee recruiting costs are funded by an AD or these can be centralized and made a component of an off-loaded relationship with a franchise development company. Either or both ways, it reduces franchiser overhead and provides more focused effort with less pressure on the corporate funding sources. If this is done properly, it will revolutionize recruiting.

2. The resources associated with providing a high-quality support system are delivered and managed by a qualified ML/AD. Not only is this more cost-efficient for the franchisor (because the costs of building a support infrastructure and managing recruiting locally are borne by the ML/AD), but the quality of support to franchisees can be geographically proximate, more focused on business nuance and decidedly more personalized.

The key to success in enabling this growth strategy is in understanding the basic operating principles of Master Licensing and Area Development, including how to recruit and manage them, as well as how to properly structure the agreements. The three mistakes most franchisors make in structuring a program are:

1. Assuming that an Master Licensees is the same type of candidate as a franchisee, only with more capital. Some of the most successful ML's I have known over the years are those who did not necessarily have the best balance sheet, but rather an adequate one; however, they had the core talent, enthusiasm, and skills necessary to drive an organization.

2. Creating a development schedule that is too aggressive. This will drive your AD's to choose franchisees based on meeting a timetable, rather than on purely on their qualifications, which leads to a lower quality of franchisees. They will always want better franchisees because the focus on branding for them is now personal. Craft an agreement that allows them to focus on the best things.

3. Assuming that an AD/ML can do both recruiting and operations. I have never, never seen this structure work over the long term. Offload development to a professional organization that takes responsibility for a significant amount of the lead costs and understands the needs of the ML's/Ad's.

There are many other things to consider in designing a franchise growth strategy for these challenging economic times, but having 10-100 (depending on your organization) qualified Area Developers reduces your company needs for funding recruiting and allows you to focus capital expenditures on improving your franchisor operating system.

This can ultimately fuel profitable growth for emerging franchise systems, something they could not have come close to replicating internally. If you are looking for an organization who can provide you with the tools to make this adjustment in your system you know where to find me!


John is a 26-year professional in the franchise industry. He has been a franchisee, a franchise executive and an advocate/consultant to the public and to dozens of franchise companies. He is the founder and managing partner of Wilson Associates and can be reached at docfranchise@gmail.com. or direct office 480.838.1641

If you are the proverbial Internet information junkie, the one who grabs hold of a topic and then will run the gamut you will find abundant opinion and expert on franchising. When researching for "your" franchise you will find a maze of opinion and thought and philosophy as it relates to whether or not you should buy a business, specifically a franchise business. You will trip head long into massive doses of opinion that run smack dab into one another with the force of two locomotives, at full steam, heading over any trestle you have ever seen in any movie scene with trains in the last fifty years.

It's ridiculous! It's absurd! Who are some of these Nimrods? What do they get out of making the most ignorant statements other than to see their own words typed on a page in front of their faces?

I want to clear up some things that seem to fly in the face of one another if I can. However, if you are simply one of those who loves to hear his or her jaw flap when you finally get someone in the know on the phone as you consider business ownership this will have little affect other than to provide more fuel for the fire to keep words floating in the wind and your actions from actually moving you into business ownership.

Here is a bottom line statement you can take to the bank: If you aren't prepared to step out of your comfort zone and become a business owner you will find a plethora of excuses to justify your lack of forward progress.

Here is another: More than 85% of the people who engage a franchise consultant or a franchise development person in negotiations to investigate franchises NEVER BUY A BUSINESS OF ANY KIND...EVER! The corollary to this statement is that they will bother, annoy, cajole, hassle, stalk, bedevil, beleaguer, nag, nettle, perturb, pester, plague and provoke a half dozen individuals who earn their livings providing assistance to those who truly are looking at changing their lives. That is what happens...ever searching but never making a decision to become a business owner.

So, here is my advice to you if you are a true seeker. Look in the mirror, and for a week of Sundays and all the time in between those 7 Sundays, say to yourself, "Stanley (Susan, Ward, Jill, Rudy... whatever YOUR name is) you have decided you are not going back to work for another company as an employee. You have decided...I have decided I will become a business owner. I will understand the components of a business (not the name of it but the attributes of the business model as developed by the franchiser) that will satisfy my personal needs and I will decide what it is I must be able to experience in a business in order for me to have created a condition that I would define as success."

Here is the second piece of advice - If you are still out there looking for a business and looking for the next job simultaneously you will never be any good to another employer or to a franchise company (who needs you at your best in order to continue to grow the value of the brand). Stop looking for the business. Now. Stop it. Seriously. Go get the job and shuffle back into mediocrity. At least for the time being and until your resolve is cemented and you have the will to change your life.

Having said that I realize there are business models that allow you to grow the business as a sideline. As long as you are willing to move at a snails pace in a business whose cost structures would be decidedly less, whose progress would be exponentially greater if you were available full-time plus, then fine...give those a go and put that into your set of business model requirements. Just know regardless of what anyone will tell you, this ex-franchisee in multiple business models and current consultant who works with hundreds of franchises (yes 100's!) is telling you right now what should be obvious to you, more involvement, more hours, more dedication to your business means more rapid, more sure success.

Where was I? Oh yes first you (and then later the nimrods of confusion) - this is what you need to do:
1. Decide first you WILL become a business owner
2. Decide what your business needs to be able to take advantage of relating to:
Your talents - Your learned skill sets
- Your personal gifting (orator, mechanical, tech astute, creative, financial, systems, admin., etc.)
- Your passions (community, environment, faith, hobby, physical fitness, etc.)
3. Decide what your budget is...and frankly don't decide on less than $50,000 liquid ($100K is better) plus
4. Review the types of business format and which you will be most satisfied in operating:
Entrepreneur: I must create it - mold it - make it - control it - be lord of all I see within and relating to it
Franchisee: I will take advantage of someone else's passion, system, creative idea and operate something I enjoy and feel strongly about that meets my criteria (see above) within a structured framework of systems, training, market niche, branding and culture. I will own it but be content with having support and a fraternity of others in my same fleet and type...
Business Opportunity: See Franchisee above and extricate any strong ties to accountability, systems, training, branding (possibly) and ongoing support. There are many fine business opportunities and distributorship's but in my estimation should be the focus primarily of those who already bring marketing, operations, experienced internal training and a talented team to the business table.

There are iterations of all of these...businesses that fall in the cracks; but the more succinct the definition you are able to associate with your business and what you are developing the more you will be content in operating the better you will be to focus on creating business success than constantly tweaking the model in order to stay in some sort of compliance to governing rules and regulations.

What are these disassociated claims that fly in the face of each other that I spoke of early on...?

I just read a plethora of posts that all said franchising is more expensive to operate than like non-franchises. Really?

Let me pose two questions:

1. What would you rather end up with...a business in which you made 30 cents on every dollar over breakeven but you were limited in reach to your market, say you top out at $500,000 by virtue of your model, product offering, branding, systems or marketing efforts or would you prefer a business in which your average unit revenue is less limited and perhaps tops out at $1,000,000-1,500,000 but you only make 24 cents per dollar by virtue of an expanded market, product offering, systems, technology, etc.?

If this takes you more than 6 seconds to answer do NOT become a business owner...not until you get your time down under six seconds.

I have just described what typically happens in franchising. Business franchise formats take advantage of systems, marketing, operations excellence, ongoing support, superior training and far better market savvy and take market share from less organized and professional independent operators. Occasionally they create products and markets. Most often they simply improve on a market that exists and feed a larger piece of the potential market.

On to question two:

2. On what planet does someone in small business consulting have to be living on to tell the Internet world it costs more to be a franchisee than it does to operate an independent business?

I mean the uninformed, usually newbies to franchise research, might add things up like royalties, required advertising and conformed purchasing practices (where you buy from an approved list of suppliers) and say, "Ah ha! They take my money and more of it than I would normally spend...that's their sneaky, under-handed trick to separate me from my wallet!"

But really? Is that what you think? I could list half dozen studies done by the International Franchise Association, Franchise Update, Entrepreneur Magazine and more that show otherwise but let me just make a plea to rational thinking with you...

If you are a bigger business, say, oh, a franchise of 50 units or 100 units or 500 or 15,000 units and you centralize purchasing, and negotiate for volumes do you think you will, as a franchisee have the opportunity to take advantage of preferred pricing or will you pay more than your independent competitor? Now, before you answer, yes, I admit it, there are the very few instances when an unscrupulous franchise company takes the excess savings and pockets them. It is rare. Why? Because in a franchise system there are no secrets.

By the way, you would be correct and earn extra credit if you surmised that the bigger the system the more negotiating power you gain, the lower your rates can go.

Secondly, the expense required to advertise...where do you think that comes from? Now, in some organizations there are larger national expenses than others and these are typically with franchises who have grown to the size where they can take advantage of their market position. That is what happens. Organizations mature, they grow, they get bigger, they are better known and they can take advantage of their brand name, market reach, size and positioning - it is the price you pay to be effective.

Free truism: This one costs you nothing - there are very few franchisees in the universe that like the marketing campaigns of their franchiser and it's corollary is everyone knows more than the experts about a better method to do it. Deal with it. Speak into the situation where you can but just realize this on the front end.

Finally, the cost of royalties is not a cost at all and unless you are running a schlock operation; should you be running your business as prescribed in the franchise model your production and business systems, cost savings through ordering and economy of scale and more effective and consistent marketing efforts will more than make up for this line item expense.

If you want to understand the cost of doing business in comparative independent businesses and franchises always remember seek first to understand before you open your mouth and remove any doubt of your lack of solid research.

• Compare average revenues of franchises to independent businesses
• Understand the expenses in a comparative sense as well
• Realize that advertising creates recognition and recognition gives you a fighting chance in the market ergo it is not just necessary but needs to be consistent, focused and aggressive
• Think deeply about what you will need to do and create if you decide to run your own show without the support of a franchise company - realize that systems create more time to produce and more time to produce create increased revenue opportunities

The franchisee/franchisor relationship is a unique one. It differs significantly from the average employee/employer dynamic in various ways. It also is vastly different than most every relationship a small business might otherwise have with any of the stakeholders in its success.

Over the course of 26 years, I've been franchisor and a franchisee at different times and in various roles of organizations as well as consultant. Ensuring an optimal relationship between the "zee" and "zor" will not only improve your bottom line, but perhaps your emotional well-being as well.

When you're new to an organization, if you have gained any wisdom at all from your years on earth, you quickly understand the larger purpose of having two ears and one mouth. There is much to listen to and many to learn from before you should start making mission critical decisions. I am 12 years younger than my next nearest sibling. Ive been used to people around me thinking they know more than I do. Over time however this positioning and the skill it developed (e.g., listening) have proven golden.

1.Always Give the Benefit of the Doubt

As a franchisee: Let your franchisor know you will give them the benefit of the doubt when there are changes occurring within the organization. You know that the franchisor needs to make decisions for the present, as well as the future of the organization, and this can be the most critical aspect of your relationship in franchising. By giving the benefit of the doubt, the first thought that comes to mind should be: There is a good reason this decision or issue has been addressed this way, and I should find out more before having an emotional reaction.

This self-talk is important, because a franchisor will make decisions not only with information they have today, but also based on things they know or believe to be true in the future. Remember, the top two assets to a franchisor are their franchisees, and their brand. If a decision damages either one (or both), they are hurting themselves just as much as their franchisees.

As a franchisor: You know a franchisee invested their future in your business model and wants to deliver the lifestyle and profits you expect. When a franchisee reacts emotionally to a decision you make, give them the benefit of the doubt before diminishing that franchisees status in the minds of you and your staff. A franchisor may subconsciously put blinders on and may tend to give less credibility to that franchisee. Conversely, when you make an assumption about a franchisee, or react to something they did, only understanding part of the situation, then you will damage the relationship and that all important trust-bond.

Maintain trust in one another, and work out disagreements respectfully and with the understanding that both of you want the same thing--mutual success.

2.Seek First to Understand

Dig up all those old listening skills you had while dating (remember hanging on every word your date spoke?).

Sometimes, we're so busy that we don't take the time to truly understand where someone is coming from when engaging in a discussion. We misunderstand the true issue being raised by honing in on one element of the bigger picture. If someone doesn't like your new marketing plan or they receive poor service from your staff, or, given today's' economy, they're stressed out more than normal, you should take a second to ask them what else might be bothering them. It will make a world of difference.

As a franchisee: Clarify your message if you are unsure of the core issue at hand, and dont be afraid to speak up. Recently, a franchisee was talking with me about business expansion and potentially adding staff. He appeared unusually short, and was having difficulty grasping the strategic nature of our topic. Finally, I simply asked him if there was something else that was bothering him. He shared that his cell phone provider had issued an incorrect delinquency, and due to that, his banks loan committee, which happened to review his line of credit around that same time, lowered his LOC by 50 percent. This was a huge issue that had not been brought up yet, and given the cash flow impact, it would certainly limit this franchisees ability to pre-load expenses or fund capital improvements without being resolved. It was a good thing I asked; its happened to other individuals Ive spoken to, and has a trickle-down effect on other decisions and attitudes about the business.

As a franchisor: There may be distractions or various tangents of an issue that keep you from digging into solutions. Once you have a full understanding of a situation, work with your franchisee and use your instincts and skills to find the optimal results. Various solutions will arise from the brainstorming process, and you could learn new strategies and innovative solutions by listening, as well as offering your own skills.

3.Visit Your Teams One-On-One

As a franchisee: Technology is great, and phones, email and even web-conferencing have improved communication in many ways, but a one-on-one visit to your corporate office is a great way to improve your business. Your accomplishments depend on a successful execution of your model, and the franchisor wants to help you. Take the time and spend the money to fly or drive to their headquarters and schedule time with everyone--from the customer service and support to the president, CEO, and owner(s) -if possible. Let them know how you're doing, your future goals and what they can do to help you achieve the success you desire.

Its not uncommon at times to feel isolated or disconnected from the organization. Seeing the big picture or the strategic nature to the operation can be difficult. If you own a retail or food service franchise, you're so busy that simply running day-to-day operations can be overwhelming. Remember that franchising offers support, templates and a relationship that drives performance and a unified sense of purpose: You fail together, and you succeed together.

As a franchisor: Most solid franchise systems have field operations visits, an annual convention or even regional meetings scheduled throughout the year. These are great for communicating, but in franchise leadership you should take the time to be at these events, and strongly convey your vision for the franchise company. Your presence demonstrates this to your prospective and current franchisees, and shows them how serious you are about their business succeeding. Telling them that you want their advice is a tremendous exhibition of your willingness to do what it takes to learn from them and expand your business. Make time to listen to them, and assist in developing their game plan, or how they can utilize the resources within the system to succeed.

Successful relations between franchisor and franchisee are paramount to long-term growth. Both in good and bad economic times, utilizing the benefits and nature of the franchise relationship will help overcome many obstacles, while giving you the best chance at success.

John is a 26-year professional in the franchise industry. He has been a franchisee, a franchise executive and an advocate/consultant to the public and to dozens of franchise companies. He is the founder and managing partner of Wilson Associates and can be reached at docfranchise@gmail.com. or direct office 480.838.1641