Emerging Franchisors — Your Education Has Only Just Begun!

The Emerging Franchisor Conference by the International Franchise Association is being held November 2–4 in Nashville, Tennessee. The event is described as rocket fuel for franchises.

A marketing message promotes the event as an opportunity to join other franchise leaders and innovators to discover the latest way to take your franchise to the next level. It goes on that you’ll hear from development experts, speak with operations gurus, discover next-generation opportunities. And you’ll have the opportunity to gather with industry leaders who are building the long-term success that creates real wealth for franchisor and franchisee.

There really isn’t any ‘formal’ training on how to become a successful franchisor. Instead, it’s imperative to learn at industry events. So, if you’re an emerging franchisor, this event should be on your radar to attend. But please, don’t stop with this event as there’s a great deal for you to learn, and especially from practical experience of those that have been in your shoes as an emerging franchisor.

So, besides attending franchise events, an essential way to grow as a franchisor is to network with franchisors that have experienced success as a new, up and coming franchise brand. Visit with the founders at their corporate offices. Be sure to schedule time with them at franchise events. Develop relationships with two or three founders as informal go-to advisors. Consider forming an advisory board as your brand grows.

Unfortunately, I will not be at the Emerging Franchisor Conference this year. So, I thought it prudent to share some of my thoughts on emerging franchise brands and specifically about controlled growth. Having worked with many entrepreneurs exploring franchising as a growth and expansion strategy for their business, I’m often asked the question, “How does a new franchise company sell franchises across the country without brand recognition?” Here are a few of my thoughts…

Emerging Franchisor Brands: Controlled Growth is Key to Initial Success

Initially, the founder is the brand. It’s his or her passion for the business. It’s how he or she treats customers and employees alike. It’s how the business is promoted within the local market. Not just through typical advertising efforts, but through solid grassroots and other organic efforts.

The initial franchise candidates are actually the “low hanging fruit” of the original business. These are the customers that inquire whether or not the business is a franchise and how they can learn more about owning their own. Most are interested because the business appears to be thriving and they’ve seen the owner (founder) time and again, always smiling and shaking hands. Local public relations efforts should ensure this occurs.

They admire the owner a great deal and will base their decision to open a franchise location, on the potential of establishing a relationship with the owner. They’ll compare the opportunity to other franchises and justify to themselves that they’re in on a ground floor opportunity with a direct line to the founder. As such, they feel the probability of success is greater because their location will be in the home office city and if they need help, they could easily approach the founder because of proximity to their franchise location.

Ideally, the next few franchisees will also be in the same market as the original business and the first franchise location. It’s prudent to only expand locally until brand awareness begins to be achieved in the market and immediate suburbs or outlying towns, some semblance of cooperative marketing is developed for economy of scale, and support systems are perfected. Now the concept is ready to expand outside the initial market or hub.

However, it is often financial suicide to entertain requests from candidates all over the country. Instead, development efforts should be concentrated on one or two cities relatively close to the home office city. For instance, if the original business and home office is in Houston, the natural progression would be to promote the opportunity next in San Antonio/Austin and Dallas/Fort Worth areas, and smaller markets in between.

My rule of thumb: Early-stage development should occur less than a 4-hour drive or a 2.5-hour flight from the home office market. Essentially, being able to provide hands-on support but still having the ability to make it back and forth in the same day or with just a one-night stay. Managing time is critical during initial development efforts.

As these markets start to become established with franchise locations, it’s advisable to promote the concept in another two or three markets. Maybe, explore another “hub and spoke” scenario. Let’s say, Greater Atlanta as the next hub.

Hub & Spoke Franchise Development Model

Expansion efforts should be the same as they were in Texas and expansion out of that market shouldn’t occur until development moves from Atlanta to the suburbs — for instance, to Roswell, Alpharetta and beyond — in this example to Savannah and Augusta. Then, as that occurs, the opportunity could be promoted close by in Nashville, Charlotte and Birmingham. Now, you see the spokes of national expansion beginning to form.

While this is going on, let’s say inquiries start coming in from the Rocky Mountain Region. The Greater Denver Area would become a natural hub as the gateway to Wyoming, Utah, Montana and into Idaho. Initially, locations should be developed in downtown Denver and out to the suburbs — Boulder, Centennial and even into Fort Collins and Colorado Springs. All the while building brand awareness.

It’s all about controlled growth and the founder exhibiting restraint in expanding too fast and in areas too far away from the core group and subsequent hubs to be able to provide ample support, create ad cooperatives and build the brand geographically. Chances of franchise success are far greater at all levels of the franchise organization within the parameters of a controlled plan of development. A Hub & Spoke development model ensures staying the course.

So, to answer the often-asked question directly, I suggest everyone in the system having a clear understanding of the founder’s vision. If it includes anything but a controlled development plan with his or her firm commitment to actively participate in the franchise sales process, the chances of selling the first ten to twenty franchises will be a frustrating, monumental task.

The results? Most likely the brand will immediately miss franchise development goals. Stakeholders will become upset as expectations are repeatedly missed. Before one knows it, the franchise system will be scrambling to recover. Resources will be thrown at various ways to turn things around. Decisions will be reactive to the next fire that is burning or of a knee-jerk nature out of shear frustration. Little if anything will be done proactively. As such, it will be a kiss of death for franchisor and franchisees alike. Sadly, it happens all too often but really, it does not have to be that way.

For information about how Acceler8Success Group assists Emerging Franchisor Brands enter the market and accelerate success, please visit our website at Acceler8Success.com.

As well, we offer one-on-one Entrepreneurship Coaching that many emerging Franchisors have found beneficial from day one as a Franchisor. Learn more about our coaching program at Entrepreneurship411.com.

Or, just reach out to me on LinkedIn or via email to Paul@Acceler8Success.com.

Have a great day. Make it happen. Make it count!