"In business for yourself, but not by yourself . . ."
Perhaps no phrase in franchising is quite as overused as that one. In virtually every instance in which it is used, it refers to the franchisee-who, while acting as an independent business, receives initial training and the ongoing support of a franchisor in areas such as site selection, lease negotiation, purchasing, merchandising, advertising and other business systems.
But in franchising, the idea of being "in business for yourself, but not by yourself" can be taken a step further. Franchisors, who might otherwise have to go it alone, can use the collective knowledge of the franchise community as a whole to improve their operations and otherwise increase their productivity.
The Power of Networking
Some years ago, a very prominent franchisor was attending a cocktail party at an event sponsored by the International Franchise Association. While franchise sales were going well, he was lamenting the company's inability to collect royalties on a timely basis. One seasoned franchise veteran's solution was simple: Tie purchasing discounts to timely royalty payments. One week later, the solution was implemented, and the collection problem was largely solved.
The old saying is that "it's not what you know, but who you know." As the example above illustrates, sometimes, it's not just who you know, but what they know.
Networking within the franchise community provides both you with a tremendous opportunity to gain insight to industry best practices firsthand-from executives who have "been there and done that."
Aside from well-intentioned networking, there are also opportunities for good, old-fashioned competitive intelligence gathering and benchmarking. If one of your major competitors were giving a speech on the latest trends in franchise lead generation, it would seem only prudent to attend.
Isolation can only ensure that few fresh ideas will enter your system, and while you are standing still, your competitors are likely gaining ground.
Beyond the educational value, networking within the franchise community can have a wide range of unanticipated benefits.
As a growing franchisor, one of your first and foremost needs will be to find people to populate your flourishing organization. And while you can certainly use management recruiters or "grow your own talent," cultivating relationships within the franchise community allows you to know just what kind of talent is available and at what price. And occasionally, you'll sit down to lunch with someone who could take your organization to the next level.
Likewise, the franchise community is filled with potential alliances that might not be readily apparent on the surface. Some years ago, I was involved in a study for a major oil company that was looking for co-brand partners for their c-store operation-and one of the finalists was a company I might never have considered if not for a lunch I spent with their CEO. Perhaps more important given the recent spate of venture capitalists, buyers and sellers in the franchise marketplace is the opportunity to begin cultivating relationships that could provide ownership with an exit, merger or acquisition opportunity.
And of course, there are the franchisees. Many of the events geared toward the franchise community will attract franchisees as well as franchisors. And some of these franchisees may be looking for additional concepts to add to their portfolios.
The types of opportunities are almost limitless. Over the years, I have seen franchisors form alliances to co-market franchises at joint seminars. I have even seen instances in which franchisors have sent leads that might have otherwise been discarded to other franchisors for which those leads might have value.
And of course, none of this could have happened in a vacuum.
Accessing the Community
The first step in accessing the franchise community, for most franchisors, will be to join the IFA ( www.franchise.org ). Founded in 1960, the IFA is a trade organization comprised of franchisors, franchisees and vendors to the franchise community that is dedicated to the advancement of franchising and franchise-related causes. The IFA affords you numerous opportunities for both networking and franchise education.
Perhaps the single biggest event for the networking franchisor is the IFA's Annual Convention. More than 2,000 franchise industry executives are expected to attend this year's event, which, in addition to providing networking activities, will host dozens of educational sessions on virtually every topic of interest to franchisors and franchisees alike.
Events like the IFA's Annual Convention offer another important benefit to franchisors: an opportunity to meet with industry suppliers who specialize in franchising. These suppliers provide franchisors with an opportunity to learn about the latest developments on products and services. Some of these products and services include POS systems, franchise intranet sites, lead tracking software, franchise advertising vehicles, specialized insurance packages, personnel management, franchise brokers, recruiting services and consulting services. Nowhere can a franchisor learn so much about such a wide variety of services and products offered at one venue.
The IFA also provides a number of other vehicles for franchisors to network and gain ideas. The Franchise Business Network hosts quarterly meetings in 30 cities around North America-these meetings feature speakers on topics of franchise significance, and, in a number of these cities, are co-hosted by the Women's Franchise Network. For those with a more political bent, the annual Franchise Appreciation Day takes place in Washington, DC, where franchisors meet with legislators to discuss various issues of importance. The International Franchise Expo ( see last month's article ) provides another good networking opportunity.
Each of these events offers franchisors a chance to meet with the leaders in franchising and to benefit from their decades of experience.
Beyond the IFA, there are numerous opportunities to build your network within the franchise community-industry specific trade shows (like the National Restaurant Show for restaurateurs) provide more focused networking. And aside from "pressing the flesh," you will certainly want to read everything you can on what is happening in the franchise community.
In today's rapidly changing digital marketplace, it is imperative to stay ahead of the curve. For most of us, that means culling the best ideas and implementing best practices from every source possible.