What does it take to be a successful franchisee? There are probably as many answers to that question as there are franchises. Different systems, locations, and consumer bases make the formula of success for every franchised business a little different from the next. However, among the differences there are commonalities among successful franchisees. This article explores a few of the most common attributes of successful franchisees outside of financial requirements.
Ability to follow the system is at the top of list of attributes successful franchisees possess. The franchisor has invested not only money, but also countless hours, in producing a system worthy of being sought by other businesspeople. This system is the reason people become franchisees, and franchisors will take what they feel are the necessary steps to protect it.
To that end, franchisees are required to follow systems and procedures such as sticking to the approved vendors of products, selling only approved products, using all trademarks and service marks correctly, and not engaging in conflicting interests as specified by the franchise agreement. The responsibilities of executing a franchise system also include the franchisee ensuring the culture and values of the franchisor are upheld by hiring and properly training the people who will work in the franchised business.
If a person isn’t comfortable with having to follow a large set of regulations, franchising may not be the route for them as he or she may become disenchanted with the endeavor before it has had a chance to takeoff. On the flip side, having that franchisor support can be an immeasurable amount of help to a franchisee. Scott Papish, a franchisee with Snap-On Tools, recalled that during his first six months of business the franchisor support representatives “were on speed dial quite often. There [was] a lot to learn with products, procedures and computer programs. There was plenty support as long as you made the phone calls.”
Though franchise systems can be strict, once franchisees have been a part of the franchisor’s system for a period of time, being perceptive can potentially allow them to make significant impacts to not only their franchise, but the franchise system as a whole. Of course, these suggestions have to be made through channels the franchisor has dictated to be appropriate. Throughout the years, there have been several examples of franchisors benefiting from their franchisees noticing trends in their area, and coming up with ideas that ultimately became very profitable.
One of the most notable of these instances was the development of McDonald’s Filet-O-Fish. In the early 1960s, franchisee Lou Groen, one of the most successful franchisees ever, had noticed that the market base for his Cincinnati, Ohio area franchise was largely made up of Catholics, and their religious practice of not consuming meat on Fridays during the season of Lent, was significantly impacting his business. In a 2007 interview Groen recalled during that time “that area (where his restaurant was located) was 87% Catholic. On Fridays we only took in about $75 a day.” He also observed that all of his customers were going to Frisch's, a competitive chain with a fish sandwich Groen described as “very good.”1 With this knowledge he set out to create his own fish sandwich to present to McDonald’s headquarters to help save his struggling franchise. The resulting sandwich, with a few tweaks, has become a mainstay on the McDonald’s menu.
The above example not only illustrates the possibilities that can happen when a franchisee keeps their eyes open to potential improvements, but it also demonstrates a big fact of being a franchisee: the responsibility for the success of the franchised business falls squarely on the franchisee. Consequently, business savvy is critical to success.
Within the boundaries of the system, the franchisee must demonstrate the ability to perform the duties that are necessary to sustain and grow their business. To do this, successful franchisees need to exhibit competence with the following:
Communication: Strong communication skills are a necessary element of any successful franchise operation as franchisees must interact with several parties regularly to accomplish tasks. But successful franchisees not only have strong lines of communication with their business circle that includes parties like the franchisor, suppliers and employees. They also have good lines of communication with family and friends. This is critical to maintaining a healthy work-life balance when executing business functions competes with a franchisee’s life away from the business.
Leadership: The ability to motivate others is essential to maintaining a franchise operation. While a franchisee will be doing a fair share of work, a good franchisee will have the awareness to delegate work as appropriate. Franchisees occasionally will also serve as the mediator for disputes between their employees, and think on his or her feet when bumps in the road arise. Someone who can spot problems as they are forming and keep them from escalating as well as someone who can deal with bigger conflicts when they do arise has an advantage.
Organization: Being highly organized with the necessary time and project management skills to effectively manage the business along with customer and business relationships is a must. A franchisee wears many hats and is required to keep the day-to-day functions in order while handling longer term aspects of the business at the same time. The ability to prioritize is important when you're managing operations, clients, deadlines, sales and more. As franchisee Chip Ellis says, “Being able to compartmentalize and multi-task and use every minute to accomplish something…is critical.”
Actual circumstances rarely match up with the plans for them. Having confidence and determination will play a role in getting the franchised business off on the correct path and keeping it there, especially in the beginning. It’s not uncommon to hear about franchisees putting in 60 or more hours a week to make it work. A franchisee must have the belief that he or she will be successful while backing that belief with the hard work necessary to launch any kind of business venture. Being able to go with the flow and adapt to changes is key to navigating life as a franchisee.
“Without a specific purpose, goal or objective we have found that the level of commitment often falls short after the initial novelty of operating a franchise wanes,” says Dennis Thompson, vice president of cleaning company Jan-Pro. Having a deep rooted passion for the product and/or service the franchisor is offering will help you during those more difficult times, and keep you motivated.
As mentioned at the beginning of this article, there are probably as many ways to define a successful franchisee as there are number of franchises. Every franchisor has a list of skills, qualifications and attributes that in summation would be the ideal franchisee under their system. The attributes described in this article only scratch the surface of qualities that comprise a successful franchisee. In evaluating which franchise to invest in, prospective franchisees need to take an honest assessment of their strengths and weaknesses and evaluate them in relation to the support a franchisor is offering to them. An important thing to keep in mind is that sometimes the most success for a franchisee lies in an area or industry that may not have been the obvious choice to begin with.