Been There, Done That A former licensee uses his experience to create a franchise.
By Devlin Smith
Opinions expressed by Entrepreneur contributors are their own.
Greg Schmich had tried to make the best of the mobile floor-covering business opportunity he joined in 1989, working to generate strong sales despite a lack of support and communication from the company's owner. "I was still pretty successful," Schmich says, "but after not hearing from the licensor for about a year and a half, I decided to break out on my own and start working on a franchise concept myself."
In 1992, Schmich started Milwaukee-based Nationwide Floor & Window Coverings, a shop-at-home or in-home floor- and window-coverings business. The company began franchising that same year.
Franchise Zone spoke with Schmich, 39, about how his business was influenced by his experience as a licensee.
Franchise Zone: Why did you create Nationwide Floor & Window Coverings?
Greg Schmich: To put together the systems, the marketing tools and the business model I knew could succeed in this industry. Our industry is great, but it seems to lack the brand-building and focused marketing effort. So we took a pretty fragmented industry and put systems to it: selling, marketing and administrative systems that any good franchise should have.
When you started this business, was it your intention to make it a franchise?
Yes. Franchising is all about high-quality systems and procedures. [Ensuring] that these systems and procedures were being met with a structured franchise model is better than [participating in] a loose-knit business opportunity with few checks and balances.
How did your experience with the business opportunity influence this business?
They set us up with some product and showed us how to put a couple of ads out there, but that was about it. There were no administrative, support or selling systems. Our manual was probably 10 pages long. So I learned the hard way how to put together some pretty good systems and teach people how to effectively run the overall operation of a mobile floor- and window-coverings business.
When you were creating the system, did you bring in consultants, like a franchise development manager, to help you create the franchise?
I worked with a couple of outside consultants to help me with some of the legal issues and the business structure. I wished I would have worked with others sooner. It's the old story of "I wish I would have known then what I know now." I could have grown the concept probably five times as fast.
What are some things you should have done?
Making more contacts with some of the industry associations and with groups like the IFA, which we're now a member of. They can really put you in touch with a lot of people, from attorneys to vendors to software people. We're still using them today as a resource for starting our franchise advisory council.
Why did you decide to start an advisory council?
It's good for everybody. It really facilitates communication-the council allows us to stay in much closer contact with the needs of our franchisees, and it's a place for our franchise partners to go if they have an idea, a concern or a great idea they want to bounce off someone. They can take it to their respective regional representative on the advisory council. We're rolling that out at our annual meeting in August.
Also, implementing new marketing tools and marketing programs is a great way for us to effectively get input and feedback from our partners, because that's truly what a franchise is all about. That's why they pay us a royalty.
Did you encounter any challenges when you turned your business into a franchise?
The biggest challenge was the legal side of it. In '96, the franchise laws changed, requiring new documentation, but just getting the registration done throughout the country that first year was cumbersome and time-consuming. I'd recommend finding a good franchise attorney, which we have, who works with you very closely.
For any new franchise system, documenting is also somewhat of a cumbersome process, but we've done this pretty well and continue to improve on this every year. All our manuals are going online in the fourth quarter of this year.
Do your franchisees enjoy a certain comfort level, knowing that at one point you were in their shoes?
Our franchise partners are encouraged and take comfort in the fact that I've done what I'm teaching them to do. We don't just talk the talk-we've walked the walk for many years.
Have you tried to model your structure after any specific company?
The great thing about the relationships I've formed in the franchise industry is I've seen what other companies have done well and what they've struggled with. I wouldn't say there's one company [that's inspired me]. I know what it takes to be successful in our business, and we try to provide all those tools to our franchisees. That's why our franchisees are so successful and have upwards of 90-percent closing rates.
I've also been involved in quite a few franchise conferences where franchisors get together and share information on things they've done to grow their business concepts. Those have been very helpful-we've collaborated with other franchisors on their annual meetings and what they've done well and what hasn't worked. Actually, three or four of us share information pretty regularly.
