If you're thinking about franchising your business or you've recently franchised
the most important question that you should have is how do you succeed? hHow do you win
at franchising? What's the process? What's the expectations you should have and how long should
it take? Where people fail at franchising it's not because franchising doesn't work
it's because they they have the wrong expectations. They get what I call "franchise
fatigue". So let's talk about how do we succeed, how do we win, what's our five year strategy,
and what's the right mindset as you go into franchising and as you grow your franchise system.
The right mindset and what we're talking about is your five-year winning strategy. We're gonna focus
on year one, years two to three, and years four to five. So year one should be about launching and
seasoning your franchise offering and we're going to talk about that some more. Years two to three
onboarding and supporting new franchisees and years four five and beyond those are your growth
and acceleration years and we're going to focus on each of them, we're going to talk about the right
mindset if you think about it now and you put it into your planning you can win at franchising. So
let's dive right in. Year one - so year one you're going to be working with your franchise lawyer
you may be working with a franchise development team but the right team combines legal and
franchise development. We're going to be developing your franchise disclosure document.
Key part of that is going to be positioning your franchise offering and significantly developing
what we call your Item 19 which is your Financial Performance Representation. So let's say in year
one it takes 90 to 120 days, we develop your franchise offering you're now called a franchisor
you're ready to offer and sell franchises. What happens next? Well many people in the industry
act as if once you franchise it gets easy that people just gonna come to you and you're
just gonna start selling franchises and be an automatic success but it doesn't work that way.
In fact, in year one what we need to do is focus on what I call "seasoning" your franchise brand.
And what does that mean? That means we've now launched your franchise, you're ready to sell
it means that you're focused on the organic contacts, the people that know your brand, people
that may be well capitalized that may be a good fit for you to become your first one, two, three,
five franchisees. You need well capitalized people and people share your brand values. So in this
year one as we season your brand we're not going to be spending a lot of money on outbound media,
we're not going to be spending a lot of money on paid ads. We are going to focus on the organic
reach your customers your brand advocates people that know your brand but also we're going to
focus on developing your budget for the next year, next two, next three, and five years. In year one,
your strategy should be all about seasoning your franchise brand. What do I mean? I mean developing
your franchise sales landing page, turning on some third-party franchise PR, and developing - it's so
important develop your brand story, why you why now, your founder story. So the mistake that many
franchisors make, and this is not only startups, but these are also experienced franchisors
that are selling franchises. You go to their franchise sales website and they sound like
everyone else. There's almost nothing that differentiates them from their competitors
and we see this so much with startup and emerging franchisors where their franchise sales web page
and their story is very basic. It's buy our franchise or they may be disclosing how much a
franchise cost but it goes much more. You're now a new startup franchisor. We have to develop in year
one your brand story which comes down to your founder's story, why you started the franchise,
why you started the business, how it transformed and changed your life, how it can change the lives
of your franchisees, your brand story, what your brand means to your consumers, and what it can
mean to your franchisees and importantly why you why now. Sure you may have much bigger competitors
or long-established franchisors but what makes your new franchise offering unique?
Why should the right franchisee be compelled to work with you and sign on with you and why they
should do it right now these are things that sound basic but they're overlocked so often.
So year one we're not going to be spending a ton of money. If you said, "Charles, I have a million
dollars to spend on franchise sales marketing," what I would tell you is that you're going to be
wasting it because your system is not ready yet. So year one we launch your franchise offering
we focus on limited sales within your organic reach and most important focus on seasoning your
franchise brand your why now, your fan founder story, and what we'll call the transformation
story for your franchisees make sure that aligns with your new franchise sales web page, your
social media ,and then from there you're going to see in years two and beyond we're going to build
on that. So year one we launch and season your franchise brand so now let's talk about year two.
In years two to three, your mindset should be focused on onboarding and supporting your new
franchisees. So I can tell you this: if you want to succeed as a franchise brand, as a franchisor,
you need two things. You need validation from your existing franchisees and you need good unit level
economics. Meaning your franchisees are making money, they're doing well, and their expectations
were met. So now year one, we launched year one, we seasoned your franchise offering, right we've
developed your founder story, your brand story, your positioning, we focused on organic sales. Now
years two to three we want to get your franchisees open and successful and we want to start turning
on third party validation and marketing working with a good franchise PR team that's going to
develop stories and articles about your franchise, your brand, and build those
third-party validation. So the founder story that we worked on in year one, well we now want PR
and digital media to amplify that story, give it support, and keep building on the substance of it.
So we've set the foundation year one, now let's pay for outbound digital media, franchise PR,
let's tell that story everywhere. Most important, we're going to support our existing franchisees.
So in the future, they're going to tell the story about your amazing support, they're going
to tell the story of how easy it was to get open, how you did what you said you would do,
and how their business has been successful. So, now your franchisees are up and running and now is
a great time to build relationships with brokers and quality franchise broker organizations.
Franchise brokers want to see successful franchisors they don't just recommend
franchises based on commissions right at least the good franchise brokers they care about who they're
placing their clients with their candidates with so they want to see that one, you're serious about
supporting your franchisees, two that you have a good process if they refer a candidate to you,
you have a good promise process to communicate with and qualify your candidates and again
that goes to that founder story, your brand positioning. Brokers are going to care about that.
So years two and three we're going to keep focusing on organic sales,
we're going to start amplifying our brand story through outbound digital media and franchise PR.
That's going to help build validation. We're going to start building up our broker relationships and
most important, we're going to support our franchisees help build toward their success.
Why? Because their validation and their financial success which comes in Item 19 of the FDD
is going to determine how we grow in the future so those are the key factors for years
two and three. Now let's get to our acceleration and growth stage.
Years four to five and beyond is where, as a franchisor,
that's where the winning takes place if we've done the right things in years one through three
built our foundation, launched our FDD the right way, seasoned our franchise brand, have
a compelling Why You Why Now story, have digital media that's building our validation and build up
broker relationships. But most important, we have franchisees who are satisfied if a broker refers
a candidate to us, our existing franchisees will validate in our FDD our Item 19 which is a section
that discloses the financial performance of our company-owned outlets, and our franchise outlets
those show good numbers. Years four to five and beyond that's when we accelerate and grow.
That's where we focus on enhanced broker sales enhance sales from our digital marketing and
potentially as we add units, private equity, and raising capital to fuel the next level of growth
ironically to go from zero franchise units to 50 is much harder than going from 50 to 100.
So this is the right strategy and plan. Now where people get taken off base is if you're not focused
on if you don't have the right expectations and if you don't realize that franchising is
an investment. Years one to three you're not profiting from becoming a franchisor. You're
building up your network. You're building up your future royalty stream. You're building up your
momentum. So years one through three you're going to be making investments, right? It's not where
you're going to be cash flow positive. You're going to be investing in your franchise system
After that investment, you keep building up your franchisees. You focus on their success and
validation and what you have is great momentum for a winning franchise system. If you have that right
mindset if we focus on that five-year strategy, you're going to win if you're focused on winning
in years one and two it's not going to happen or worse people are going to make promises to you
whether it's through marketing or claim franchise sales. They're going to take your money and you're
not going to have the financial success or the franchise sales success that you expected or
that was promised to you because it takes time to build this up so stay focused on the five-year
strategy if you have the right mindset the right planning you're going to win at franchising.