Franchise Buying Guide

Franchise Gurus Speak Out

Learn from the franchising legends who have built some of today's biggest brands.
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Do the names Frank Carney, John Hewitt or Fred DeLuca ring a bell? How about Pizza Hut, Jackson Hewitt Tax Service or Subway? Most consumers have personally come in contact with the brands these franchisors spent decades building. As busy as these franchising legends are, we were able to steal a moment of their time to gain some insight on what leads to franchisee success as well as what to expect from the franchising industry overall.

Topping It Off
When it comes to franchising, there's no better expert than Frank Carney. After all, he knows franchising from both sides: as a franchisor and as a franchisee. In 1958, he and his brother, Dan, co-founded Pizza Hut. They grew the business so successfully that it attracted the attention of PepsiCo, which bought the company in 1977. In 1994, Carney returned to pizza and became a Papa John's Pizza franchisee. He currently has 116 stores in five different markets.

Wilson: Obviously, you've been very successful as a Papa John's Pizza franchisee. What have you done to become such a success?

Frank Carney: I kind of have a sixth sense about the business. It helps keep me from becoming complacent. My sixth sense says, "If you keep working, you'll find a problem. If you fix the problem, you've got a good chance of [improving business]." I really like to take a store or find a group of stores that isn't doing very well and work with the area manager or the local operating partner and keep trying different things until we find something that works. And I'd say 80 percent of the time, we're able to do that. how can prospective franchisees be sure the franchise is a good fit?

Carney: I think it's the same as a job. If you don't really enjoy a job, you probably won't be there very long or you won't be very successful at it. It's about whether you really like what you're doing or not.

How has the world of franchising changed since you started franchising Pizza Hut in 1959?

Carney: It's much more detailed and much tougher. The fees have risen, along with the prices of [supplies]. The Pizza Hut system didn't have all the rules you see in franchising today, and that's probably not bad, but it feels different. We didn't spend a lot of time policing our franchisees. We preferred to spend time figuring out how to grow [the franchise]. Today, there is almost a conscious direction toward control--"you can't do this without our permission." In Pizza Hut, franchisees didn't have to ask our permission very often, and I liked the franchisees testing different things to make their businesses better so we could spread [the ideas] to all the franchises. That's just a different way of looking at the business. The current franchisors can get there. It just takes a lot longer, because [many of them think] only the company people can do it right.

If you were starting Pizza Hut today, what would you do differently?

Carney: There is not a lot I'd change. I still think I would have an easier-going franchise than the control syndrome that's out there today. The syndrome is out there for a good reason, because franchisors have been sued by franchisees, and you have to take that seriously. But I still believe there's a way to work more closely [with franchisees] than what I see in most franchise companies. The atmosphere can be more permissive and still not risk running afoul of the law or the regulations.

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This article was originally published in the September 2006 print edition of Entrepreneur with the headline: Show Me the Way.

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