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Destroying the myths of franchising

24, 2020

8 min read

The opinions expressed by the entrepreneur's contributors are their own.

This article was adapted from Scott Greenberg's The Wealthy Franchisee: Game Changing Steps to Becoming a Successful Franchise Superstar, which is now available through Entrepreneur Press. It can be purchased through Amazon and Barnes & Noble.

I meet a lot of franchisees. I ask the best why they are successful. I see who they are and what they do. Then I speak to the struggling franchisees and ask them what they think their high performing colleagues are doing for them. Often there is a major interruption. I also speak to the franchisors. They have a broader perspective as they see the results across a wide range of franchisees performing the same operations. They also tell me about the misconceptions many franchisees have about their top performers. Let's examine the most common.

You have winning locations

A franchisee once told me how lucky I was to have my store location. I was a little offended. He didn't know anything about our company or our customer service. He only knew our address near Beverly Hills. In his mind, rich people lined up with stacks of Benjamin's to buy huge fruit baskets. However, this was not our customer base. Our prestigious area had little parking, constant traffic (which made deliveries difficult) and high rents. I wouldn't sign that lease today. Our high turnover wasn't because of where we were. They were because of what we did.

Related: Stop Running Your Franchise Like A Circus

Location is absolutely vital in franchising, especially for restaurants and retail. Demographics, population density, pedestrian traffic – they make a difference. You have to fish where the fish are. Your franchisor can help you with this. You know your customer profile and should be able to analyze your area – at least on paper – and to help with the selection of a location. Sometimes a great location can make up for lackluster operations. It can also make some franchisees feel a little more confident about their business acumen than they should.

However, a great location may be difficult to identify. It can be too expensive. Or it is just not available. That's OK. Ultimately, it is the franchisee who makes or breaks the deal. All franchisors have stories of amazing operators tearing it up in places where others have failed. Your loyal customers will travel long distances to repeat a great experience. Your dedicated, well-treated staff work harder to create these experiences.

Just ask Burke Jones who bought difficult locations at the UPS store twice. One was in an average neighborhood with no demographic advantages. The other was four doors from a FedEx office store. With his excellent customer service, he built each location (on various occasions) into the number one unit in the entire network of nearly 5,000 branches.

Wealthy franchisees look for great locations but don't rely on them. For them, “good enough” is everything that is needed. Give more credit to the top franchisees in your system. Their great features make locations look better and may be easier to replicate than their zip codes.

They are workaholics

Wealthy franchisees work hard and beat the hours. Many typical and difficult franchisees too, of course. Hard work isn't the secret to success. This is the requirement. Many franchisees sacrifice and sweat, but not all get results.

The top performers I meet don't always put in more hours. They put in better hours. You know the difference between activity and productivity. They work on their business, not just their business. They develop leaders instead of managing employees and put in place the necessary infrastructure to ensure they don't have to do everything themselves. A franchisee who owns 20 locations doesn't have more hours a day than someone with just one. With the right people, training and systems, your work will produce more results. They are no busier than other franchisees. You're just more productive.

You already have experience

Yes, previous business experience can give you a head start. Financial literacy, customer service, leadership, sales, marketing – you can bring all of these skills to your franchise. The next time I start a business, I would like to believe that my experience with edible arrangements gives me a tremendous advantage. But "business" is a broad word. You can develop skills in one company that cannot be transferred to another. Past success in a career is in no way a guarantee of the success of your own company. Even in a busy, high-stakes corporate environment, there is structure, feedback, and a regular paycheck. There are bosses, expectations and a lot of intensity.

Franchisors complain to me that many new franchisees with a lot of outside experience find it difficult to use their systems. They come with knowledge and prejudices that make company methods difficult to trust. They find it difficult to unlearn old methods and they think they know better than the franchisor. You are trying to outsmart the model.

Most wealthy franchisees stick to the system. When I try to get this concept across on stage, it can make me sound like a corporate shill, but it's true. I don't meet franchisees who have gotten rich from resisting branding practices. But I meet a lot of great franchisees who don't have extensive business experience. You come in fresh and open and curious. They trust the Ops manual, have the right attitude, and perform better than anyone.

Yes, experience is beneficial – provided it does not conflict with proven systems and does not close your mind to new methods. And if you don't have any experience, don't worry. Operating a franchise is the perfect way to get one.

You are better educated

I am grateful for the higher education I have received. It made me a better, smarter, and more informed person. But it didn't make me a better franchisee. Books and lectures can tell you a lot about swimming, but they can't make you a swimmer. If ever there was a discipline that needed to be learned locally, a franchise is in operation. I watched one of my neighboring Edible Arrangements franchisees bring his business to its knees. He had a Masters in Engineering. A less educated franchisee with more relevant skills bought the company and made it profitable.

Many franchise legends never went to college. Peter Cancro was only 17 when he bought Mike's subs and eventually turned them into Jersey Mikes. Wendy's founder, Dave Thomas, dropped out of high school and didn't receive his GED until he was 61. And these are franchisors. I have met countless successful franchisees who have their training on their feet and in their shops. To be a wealthy franchisee, you don't have to be a college graduate as much as an ongoing student. What you know is less important than what you want to learn.

You love the business

I've heard different opinions about it. As CEO of Naf Naf Grill, Paul Damico told me without question that his top performers are passionate about their food and the experience they provide. I heard similar feelings from Erin Walter, Marketing Director at Global Franchise Group. Their best franchisees also love to delight customers with their brands' convenience foods and goodies. When I asked Charles Watson, CEO of Tropical Smoothie Cafe what its top franchisees have in common, the first thing he said was "Passion for the Brand".

Rhoda Olsen, vice chairman of Great Clips, disagreed. "Do what you love" is BS, "she said." This is work! We don't believe that people need to be passionate about hair. They need to be passionate about the elements that build their business. "

Related: OK, maybe you should run your franchise like a circus

In my opinion, what franchisees love about their business is less important than that they love something. Whether it's the product, the process, or the people, an element of your business should make your heart beat faster. Running a franchise is difficult. It is important to balance the challenges you face with something personally meaningful so that the troubled times are worth it.

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