5 Lessons Learned From My First 6 Months as a Franchisor
The time is now to over-invest in your franchisees.
Having opened 11 franchises in less than a year of operation, our agency has shattered every goal we’ve set, built an amazing culture, developed incredibly close relationships with each franchise and, as a bonus, had fun doing it.
Here are some raw, immediate pieces of advice for other new franchisors after having gone through the process day-by-day in such a short span of time.
1. Build a product or service before launching
We didn't start by franchising in the digital-marketing space. We spent the first three years focusing on white-label fulfillment, acting as the behind-the-scenes partner to agencies throughout the U.S. and Europe.
This was huge when it came to launching a franchise. We spent three years perfecting product and operations. We knew our product better than anyone in the market, had our costs down to a reasonable amount and had systems and processes built out to scale. In fact, upon the launch of our franchise model, we already had almost 100 team members.
I see a lot of franchises that have built great operations — but is that enough? When you’re testing your product with franchises already on board and expecting results, it becomes harder to fail and improve. How can you test your product or service without franchising it? How can you perfect your offer before hitting the market?
2. Make sure your qualifier is more than just financial
When choosing franchisees, it’s essential that you choose great fits, not just someone who can pay you. You’ll be tested as a franchisor quickly on this. You have someone ready to sign up with you but have a gut feeling they will be a terrible partner. On the other hand, you need the cash and you need it badly. What do you do?
This is a serious, long-term partnership, in our case more so than any white-label partner we’d had so far. We knew our recruitment process had to be slow, steady and intentional.
So how can you recruit slowly and make sure they’re the right fit? Our first six franchisees were all connections of mine that I’d been talking to for over a year. As we focused on building the perfect product, I was having weekly or monthly sync-ups with each one of them, updating them on how the franchise launch was coming, getting their insights and ultimately securing them as our first partners.
By the time we were ready to launch, our first franchisees had already worked with us, knew the team and were involved in the development of the model itself. This facilitated not only their transition into franchises, but our initial launch and our ability to help them get results quickly.
Legalizing will take several months, and you’re probably thinking about the franchise model long before that. From that point, try to find 10-20 people who could be great franchisees and start having sync-ups with them. If you do this right, you should have your first three to six franchisees by the time you launch — and have already set them (and you) up to succeed.
3. Over-invest in your franchisees
Against some advice given to me by people I trust, we’ve gone all-in on supporting our franchisees, far exceeding what any regular franchise would offer. Our goal was to go above and beyond on every element — from training to support to marketing.
We’ve found that if you do this right, not only can you improve your franchisees’ satisfaction and happiness, but they will also refer you to the next franchises. At Hite, four out of 11 franchises so far have come from referrals of the first group.
How can you position yourself to go above and beyond (if that’s your goal)? Here are a few things we’ve done to invest in our franchisees.
We created a Facebook group where we have daily live training focused on a different topic, including sales, operations, product, mindset and faith. We also have time for us to go over any questions or doubts as a community. I will admit, this might be easier for us due to our team size.
Our franchisees must invest in a marketing fund, but we don’t let it stop there. As a corporation, we added anywhere from $10-20,000 per month to make sure we were getting them the brand recognition and leads they need to be successful.
It’s much more simple with a larger team, but we’ve given each franchise four points of contact, with one person owning the entire relationship. One helps with growth and sales, another with operations, another with product and the last with mindset. On top of this, we have a Slack group and are available at almost any time.
Proceed here with caution. We really focus on service and want to over-deliver, but if not done right, franchisees can abuse this quickly. Bring on the right franchisees and they will respect your time.
4. Find an experienced attorney
Although it’s not cheap, I highly recommend hiring a great attorney. At the end of the day, we don’t know what we don’t know, so having someone that’s not only there to answer questions, but to also proactively give advice, is key. Here is a great list of top attorneys from Entrepreneur.
5. Rapport development vs. hard training
Talk to any franchise consultant and they will bring up training, development and processes. However, in my experience, spending time building rapport is the most powerful step, especially in the beginning.
When you first become a franchisor, there are so many things you won’t figure out until later. Your training will probably be alright, your processes will be solid (but not quite the best), and your marketing and branding won’t be at scale yet. Overall, it can be slow growth.
Taking time to really build a relationship with your franchisees and constantly listening to them and taking action on what they say will go a long way. Your first five franchisees are probably not investing in your unproven franchise — they are investing in you.
I'm certain there are more lessons to be learned about franchising. So far, this is what I have learned. It's a difficult, new, exciting and uncertain world, but I have discovered that taking uncharted paths and following my instincts and values has been the best decision I could have made.
Entrepreneur Leadership Network Contributor