Having spent 15 years as a franchise executive with Snelling Staffing, one of the nation’s top franchise staffing firms, Brian Miller knows first-hand the world of franchising. In 2003, he joined FranchisEsource Brands International (FSBI), which specializes in multi-brand franchising and business consulting, and then three years ago Miller was promoted to president and chief operating officer for FSBI’s family of brands that includes Zor Source, which provides coaching services to franchisors. Recently, Miller took a breather from his busy schedule to talk with writer Iris Dorbian about the intricacies of the franchising process and the most common mistakes he sees franchisees make.
ID: What are the most common mistakes you see franchisees or potential franchisees make? Can you provide an example?
BM: In the beginning when people are looking to invest in a franchise, they look at the business through the eyes of a consumer as opposed to a business owner. For example, they may have an affinity for a particular product or service but that doesn’t mean they would necessarily be good at that business. So one of the first things that people need to do is look at what they want that business to do for them because the business is a vehicle to get them where they want to go. They need to step back and say what do I want my life to look like in three to five years? What are things that are important to my family and me? Do I want to involve my children in this business? Am I getting into business for myself to have a more flexible lifestyle? Once they have a better understanding of that, then they can begin to look at businesses that more closely align with what their business goals and expectations are.
With franchising, what it takes to be successful is following that franchise’s operating system. The biggest mistake that new franchisees make is that they don’t follow it.
BM: I would start by asking them what they like most about their current career and what they like least. Then I would ask questions about what they’re looking to accomplish by being in business for themselves and a little about their family, their personal life, and how that plays into what they’re looking to accomplish. It’s really a coaching process, a discovery that we take people through to help them determine what they want the business to do for them.
Let me give you a good example. Some people come to me with preconceived notions of what they think they want from a franchise. It might be something that their brother-in-law told them was the next hottest franchise, but, again, that might not be the best for them. A lot of people are stay-at-home moms or stay-at-home dads and they’re looking for a more flexible lifestyle because they’re tired of working 60 to 70 hours a week and having to turn in a permission slip to take two hours off. And they might want a business that will fit their lifestyle. That’s why it’s very important to ask people what do you want this business to do for them rather than just repeating something they’ve heard.
ID: What type of demands should franchisees expect the franchisor to make on them? How about marketing support?
BM: They need to be properly capitalized. In the front part of the Franchise Disclosure Document (FDD) there’s information on costs and initial investment. Typically, it gives people an idea of the liquid capital they’ll need for six months or up to a year to operate that business. They need to understand what the expectations are in terms of financial requirements.
A franchisor can provide three things: The first is the brand name; second, it provides an operating system, which is a track to run on; and third, a franchisor should provide ongoing support, basic marketing materials, and performance enhancement coaching to help franchisees ramp up their businesses successfully.
ID: What type of person is the best candidate to become a franchisee as opposed to an independent small business owner?
BM: If you can’t follow a system, if you’re a maverick, then you will not be able to do well in franchising. Because one of the criteria that a franchisor is going to look for in a potential franchisee is how well he/she believes you’re going to follow this system. Some people don’t want to follow a system; some people want to go off and create their own system and there’s certainly a lot of opportunity with that, but there’s certainly a lot of risk because you don’t have a system that’s been tried and proven and you don’t have the resources.
We’re seeing a lot of military men and women coming back from years of serving our country and they’re coming back to a very tight labor market. Veterans are good for franchising. The reason is, when you’re in military, you’re taught to follow an operating system. Veterans are driven, passionate, and motivated. They like having a track on which to run. They’re used to following a system. They have a fire in the belly and they’re used to getting a job done and doing it right.
ID: What would be your best practices for success in becoming a franchisee?
BM: Be a student of the business and be what we call a “strong request for coaching.” That is, someone who when they start their franchise asks for coaching from whomever their mentor is in the corporate office. The people who are typically successful are the ones who are hungry to learn and want to improve themselves.
Also pick someone who’s been successful in the system and who’s positive as a mentor, a fellow franchisee for example, maybe someone who’s a consistent award winner in the organization and constantly gives back to the franchise. And seek out a peer mentor, somebody who is following the system and doing it the right way.