Business Operator or Franchisor?

There are many, many solid reasons for wanting to grow a successful business using the franchise model. If franchising is your selected method of expansion, there are dozens of books, hundreds of consultants and even more so-called "expert" opinions on how to accomplish your goals. Some offer great advice while others could lead you down the wrong path. In developing your strategy, you will need to decide which path is right for you.

There is one issue that probably doesn't get the attention that it should and I've seen it all too often when working with start-up franchise concepts -the need to separate the role of being a franchise and being a business operator. Running a franchise is a full-time job just as running a successful retail store, restaurant, etc. is also a full-time job. It's incredibly hard to effectively do both at the same time. If running the day-to-day activities in a successful retail or restaurant operation is your passion, you may find the transition to becoming a franchisor a difficult one.

To illustrate my point, take an experience I had with a start-up restaurant franchise concept. About a year ago, a national franchise consulting firm invited me to take a look at a small restaurant concept and, if possible, help them develop a standardized build-out program. The concept had several corporate units open and was doing very well financially; and the rest of the pieces like a franchise sales plan, marketing strategy and franchise development were falling into place. So I eagerly jumped in.

Working closely with the new franchisor, F.C. Dadson helped develop a standardized but flexible set of architectural plans and renderings for future franchise locations. The plans detailed lighting, flooring, paint, graphics, menu boards, millwork and furniture pieces and a specified equipment list. Also included were budgetary costs for everything. The FDD could now be accurately presented, the operation manuals were brought up to date and the renderings could be used in franchise marketing materials. Our piece of the puzzle was complete -at least until the first franchisee signed on.

So I waited, knowing it takes time to complete the rest of the start-up tasks and sign on suitable franchisees. I stayed in touch with the franchisor throughout the year, but am still waiting word on that first franchise location.

A recent trip found me in the franchisor's hometown, so I decided to stop by for a visit. I was a bit shocked to see him, the president of a new franchise concept, working behind the counter serving customers. And then after a brief conversation, he had to run out on a delivery. Now I understood why this promising new concept hadn't gotten out of the franchise starting gate -the franchisor was passionate about serving his customers and the day-to-day operation of the restaurant. In other words, he loved being an operator.

I completely respect this franchisor's dedication and regret not seeing it earlier. If I had, I could have advised him on this shift he would need to make from operator to franchisor. Until he makes the switch or hires someone to run the franchise side of his business, he'll have a big hill to climb to build a successful franchise.

--Tim Matey (For more about me, check out my LinkedIn profile.)