Matt Kelton

The first thing is to go back to basics. Are they doing the standard marketing checklist items to generate leads (calls/emails/networking events//etc.)? Are they spending a sufficient amount to generate leads? Are they getting referrals and have they analyzed their repeat customer metrics? Most franchisors measure customer satisfaction (ie Net Promoter System/Mystery Shops.) Are there any red flags there? What does their staff look like? Do they have the right people in the right seats? Not everyone can close. Using a tool like DISC/Zorakle is a good way to identify the right fit. A good Franchise Coach will work with a zee to follow their biz dev checklist, invest in marketing consistently, and to coach their sales staff.

To grow your customer base you will need to first focus on delivering a world class service. Referrals are a huge part of building a "fan club" in a local market and by providing a great customer experience you can separate yourself from your competition. You should follow the franchisors grand opening budget and continue to spend throughout your time as a franchisee. Digital marketing will be how most people find you so don't skimp in this area. Often a new franchisee will want to wait to invest in marketing until their business has taken off which is counter intuitive. Get involved with your local communities and let them know who you are.

This is a huge area of importance that often falls through the cracks in franchising. We often focus almost exclusively on top line revenue while ignoring unit level economics. Hiring a bookkeeper is a great investment. Spend your time on growing your business and let the professionals handle this for you. Regularly review your P&L (at least monthly) and see how you are tracking against your budget. Work with your Field Coach and see how you are benchmarking against your top performers. Get financial literacy training through an online program like Profit Soup. Remember that your goal should be to have an exit strategy to sell your business for a multiple of cash flow in a few years. Having reliable/accurate data is critical.

As a franchisor you can't overcommunicate with your franchisees. To be successful you will want to get "plugged in" with the franchise network. That includes reading the newsletters, attending their town halls/webinars, attending regional and annual conferences, and regularly communicating with your fellow franchisees. Your Franchise Business Coach should be communicating regularly and they should be who you lean on to grow you business and to answer your questions. Don't be afraid to talk to the C-Level leaders and share feedback or concerns. Same goes for your Franchise Advisory Council. If there is an annual survey (like Franchise Business Review) share your honest feedback on how the company get better.

You are buying into a proven business model with systems and tools to create a successful franchise. The #1 thing I hear other franchisors complain about when a franchisee fails is "they just wouldn't follow the system." As a franchisee right out of college I noticed that when I started to think I was smarter than the franchisor and I would try things my ways I would in almost all cases struggle. If you are very entrepreneurial and have issues following a structured system than franchising might not be a great fit.

You need to go in knowing that a franchise agreement will be one sided by the franchisor in their favor. You also should be aware that most will not make any major changes to the agreement. As a franchisor you need a "level playing field" for the rest of the system and you also wouldn't want another franchisee getting a better deal than you would down the line. It's also an administrative nightmare keeping up with 20 different agreements. Hire an attorney who specializes in franchising to review the agreement. It's shocking how often prospects don't spend a few hundred bucks to get experienced help in reviewing something that will personally bind them for over 10 years. Make sure you are aware of all fees and obligations. Good luck!