SELECTION: The Root Cause of SUCCESS/FAILURE

Over the past week or so there’s been a lot of talk about franchisee failure rates.  So why do franchisees fail?  Is it the fault of the franchisor or the franchisee?  The response is usually skewed by which side of the fence one resides.  If you reside in the back yard of the Franchisor it’s the Franchisees fault; and if you reside with the Franchisee it has to be the Franchisor’s fault. 

From a neutral perspective I think one can easily realize that when a franchisee fails, both the franchisee and the franchisor suffer and both carry certain responsibility.  What is the root cause of failure?  I’m going to suggest that it comes down to three things: Selection, Selection and Selection! 

AS A PROSPECTIVE FRANCHISEE:

§         Selecting to go into business for yourself is a major decision.  Not everyone possesses the knowledge, skills, abilities and resources required to successfully own and operate a business.  A thorough self-examination and audit must be done.  Too many people start a business because they want to work less and earn more.  Reality is, at least in the beginning, you’ll work more and earn less.  Too many people start a business with ‘Entrepreneurial Optimism’, I’m here to tell you when it comes to business everything costs twice as much and takes twice as long.

§         Selecting to go the franchise route.  The personality and skill-set required of an independent business owner is very different from the personality and skill-set required of a franchisee.  Much has been written on this topic, but in a nutshell a franchisee must possess many of the entrepreneurial skills of the independent business owner, yet remain content with having less creative input, and more of a desire to follow a predetermined path.

§         Selecting the right type of business.  Franchising now spans some 85 different industry classifications.    You’ve got to select something that you’re passionate about, something that you believe in, something that will provide the lifestyle that you’re looking for.  There thousands of successful Real Estate franchisees, but if you have young children at home and prefer not to work evenings and weekends a Real Estate franchise may not be for you.

§         Selecting the right Franchisor.  Remember this is a marriage, and you will be entering into a long term relationship with the franchisor.  Is this an organization with whom you want to have a long term relationship?  Do your homework.  Evaluate and question everything, take nothing on face value.  Talk to franchisees, talk to them all.  Talk to people who have left the system.  Read the UFOC – every page – every word.  Read it first for understanding, read it again and highlight anything and everything that concerns you.  If you don’t understand something – ASK!  Enlist the help of a competent franchise attorney.  Leave no stone unturned.  Trust your instincts.  Remember the words of Dr. Phil “Those who have nothing to hide, hide nothing”.  You do not want to be an ex-franchisee “saying if only I’d asked, called, checked”.

AS A FRANCHISEE:

§         Selecting to follow the System or NOT!  Your franchisor can provide you with the absolute best system in the world, but if you don’t follow the system…it will not work!  There’s an age old question which asks “Why would anyone invest in a Franchise and then not follow the system”.  This is a question that as a franchisee you should be constantly asking yourself anytime you even think about deviating from the system.  You can not follow part of the system.  You can not follow the system some of the time.  Success is achieved by following all of the system – all of the time.  Even when it doesn’t make sense, even when you have better way and even when you don’t want to!

§         Selecting to ask for help.  Too many franchisees go down a very bumpy road, with a smile on their face and always saying everything is great --- until it’s too late.  If things are not going as well as they should ASK FOR HELP.  Your franchisor is there to provide you with help.  Ongoing training, coaching and support is one of the major benefits of investing in a franchise concept.    

§         Selecting to Succeed.  Success is a matter of choice.  If you want to succeed, you’ve got to chose to succeed.  You’ve got to always remember that Successful People do what unsuccessful people are unwilling to do!  Winners never quit, and quitters never win.  Choosing to succeed means getting involved with the system.  I’ve worked with a number of franchisors to develop surveys of the franchise system to get feedback which could be used to improve the system, and only 40% to 50% of the franchisees respond.  Being involved with the system means responding to the surveys, attending regional and national meetings and training sessions.  When attending these meetings don’t have pity-party in the corner with some disgruntled franchisee, but look for someone that’s working the system and who the system is working for and learn from them. 

AS A PROSPECTIVE FRANCHISOR:

§         Selecting to Franchise.  There’s an old saying “Those who can’t Do – Teach”.  Too many business owners can’t do, so they decide to teach (franchise).  This is a recipe for disaster! If you can’t do it … you probably can’t teach others to do it.  And just because you can do it, doesn’t mean you can teach others to do it!  Through franchising you can grow faster, stronger, and bigger than you ever could on your own, but only if:

o       You’re starting with a VIABLE concept, that can be successfully duplicated and replicated hundreds or thousands of times,

o       You have a business model with long-term mass appeal in a large geographical area, and

o        A business model which allows the franchisee to achieve greater profitability than could on their own after recouping their investment, royalties, advertising and other associated fees.

§         Selecting the Right Guidance.  If you’re considering franchising your business you are probably pretty good at what you do.  With that being said, you probably have little or no experience in building a franchise organization.  There are many organizations in the market that can assist you in developing your concept and preparing to franchise the concept.  There are also many, who are prepared to take your money and provide you with little or no benefit.  Select a company who will tell you what you need to hear, not what you want to hear. 

AS A FRANCHISOR:

§         Selecting your Franchisees Carefully.  Remember this is a marriage, and you will be entering into a long term relationship with the franchisee.  Is this someone with whom you want to have a long term relationship?  Another way to think about it is that it’s a Marathon and not a Sprint. 

Within the walls of many franchise departments you’ll hear the words “We look for ways to qualify people in, not out”.  I’m going to suggest one should look for reasons to qualify prospective franchise candidates out.  If and when there is no real compelling reason for doing so is when you should then approve the franchise candidate.  Your UFOC is not going to contain the names of those who you do not accept; your referrals and lawsuits will not be coming from those that you do not accept, but from those that you do.  Nothing sells franchises like successful, happy, content and profitable franchisees.  Nothing will kill an otherwise viable concept like selecting the wrong franchisees.  Select wisely!

§         Selecting to support vs. expand.  It’s all too easy too get caught up in growing the franchise system by adding locations and lose sight of supporting existing franchisees.  If you can’t support what you’ve got, you don’t need anymore.  If you have one franchisee in your system who might say “They’re more interested in selling franchisees, that helping their franchisees” that’s one franchisee too many. 

§         Selecting to believe that the franchising motto: “In business for yourself, not by yourself” is a two way street. 

§         Selecting to sometimes work harder to help a franchisee succeed, than what the franchisee is willing to do himself.

§         Selecting to take it personally each and every time a franchise fails to succeed.

§         Selecting to be involved.  If your surprised when a franchisee tells you that they are struggling, failing or quitting and your surprised – you failed!

Franchisee, franchisor, or a prospective franchisee or franchisor it’s all about making the right selections.  If everyone focuses on selection, franchising will continue to Thrive, Grow & Prosper for many years to come!  What other selections can be added to this list?

Believe & Succeed,

FranSynergy
Synergizing Franchising 1 Franchise at a Time!
www.fransynergy.com