What Makes A Franchise Owner Win?
Printed In USA Today
by Nancy Rathbun Scott
The 600,000 franchised businesses in the U.S. generate almost $1 trillion each year-nearly half of all retail sales. These franchises employ more than 8 million Americans and have a better chance of succeeding in the first five years than their independent counterparts, according to the International Franchise Association.
Still, even though franchising is proven, it's not without risk. So what makes one franchise owner win and another strike out? Experts point to a paradoxical combination of gutsy entrepreneurship and a willingness to follow the leader.
Expectations make a difference
"A franchisee's success depends on his expectation level-his outlook and perceptions about where he is going with his opportunity," says Terry Powell, founder and CEO of The Entrepreneur's Source.
Powell, whose company matches prospective franchise owners with franchise companies, has also found that different personality attributes work in different franchise systems. "All things being equal, some businesses have more need for an outgoing person, who is sales and marketing oriented. Other individuals work well in a business system where the customer comes to them. As long as they do a good job and follow the system, the customers come back."
Too, a lot depends on whether the franchise system matches their individual franchise owner's need for support.
Willingness to follow is critical
A franchise owner's willingness to follow the system turns the key to success, say most experts. In fact, at The Entrepreneur's Source, franchise consultants coach franchise owners how to move out of their own way and let the system work for them. "Some reconcile it very easily," says Powell. "They can go forward with a high expectation of results without questioning the implementation of the system. Others are very fearful and doubtful-they don't have strong enough self-esteem or expectation levels about their success. These people are more cautious, more averse to risk and they will question everything."
Roger Block, executive vice president for Carlson Wagonlit Travel Associates, a global, franchised travel agency, agrees that attitude counts as much as-if not more than- organizational skills in a franchisee's success. "We're looking for people who have a high level of commitment or desire to succeed. We want someone with a can-do attitude who accepts the resources given and asks 'What can I do with them?'"
Certain personal attributes signal success
Scott Simcik isn't shy about predicting ownership success. In fact, this founder and CEO of Inches-A-Weigh, the weight loss franchise with 70 centers nationwide, weighs in with his own special matrix of attributes for success. "The cumulative result of seven factors-net worth, personality type, attitude, character, operating system, continued education, and franchise relationships-can foretell the franchisee's learning-curve-to-profit, as well as define a high-, medium- and low-volume operator."
Simcik says the formula for success includes: "The ability to cut the learning-curve-to-profit by carrying the attributes of high-volume operators, which are: an idealistic, decisive, cooperative personality; an open, positive attitude; character traits that include high trust, commitment, loyalty, and a win-win perspective; high respect for the operating system and the work ethic; high attendance at all employee training seminars; and personal, frequent, solution-oriented communication with the franchise headquarters."
Experience matters to some
Glen Liset, vice president for sales and marketing for SuperCoups, the direct mail advertising franchise, bets on franchise owners who show him three things: some type of business experience, sales management background, and money to invest. "Someone who has the financial wherewithal to buy the franchise and support themselves for the first critical year probably has a track record of success and the business background to match," he notes.
That's why SuperCoups likes to award opportunities proportionate to business experience. "Someone with sales experience looking to work out of their home would probably get a 50-60,000 home franchise, while a manager who has run a small business and is looking to run a sales force will make a bigger investment and so will I."
But industry experience is less important to many franchisors. At Carlson, for instance, travel business knowledge counts the least in an owner's ultimate success, according to Block.
From his match-making perch at The Entrepreneur's Source, Terry Powell agrees that there's little relationship between professional background and success. "Ninety percent of franchise companies don't want their owners to have prior experience, knowledge, or background in the franchise product or service."
It goes back to following the game plan."We have a system, a plan, a program," Block explains. "We know what works, we have the experience. We can give them the technology, the selling systems, the buying power with clout, the marketing know-how, and programs. What we need is the franchisee's commitment to make the franchise succeed. They have to be willing to invest their entire focus into this business opportunity."
Support from the franchisor fills gaps
Corporate support fuels every franchise owner's success-and that means support that begins in training and flows through day-to-day operations.
For instance, Carlson recently developed a relational database that gathers information at the agency level. The central marketing department then matches appropriate offers to select customers, generating more business for Carlson agents in the field. The company also has invested in a consumer web site that offers online bookings. Clout with airlines and other suppliers boosts sales as well, and additional support arrives via sales kits, in-store marketing and display materials, ticket stuffers, posters, promotional items, and banners.
It's the same at Little Scientists, a five-year-old franchise company that teaches science to young children aged three through third grade. In forums ranging from day care and community centers to elementary schools, Little Scientists franchise owners draw all the support they need-and, they needn't be professional educators to succeed says Dr. Heidi Gold-Dworkin, founder and CEO. "A teaching background helps, but we are able to train someone to be successful who is interested in running their own business and loves children."
Support lies in the system. "We have school curriculum units that we have developed here," Gold-Dworkin says. Our teachers go in with the supplies for each unit of four lessons. We teach the first lesson, then we do staff development with the classroom teacher to teach them how to do the three remaining lessons and give them all the materials. Then we come in for the next unit."
Hands-on training and role playing get new franchise owners over the hurdle."Even if they have no experience in teaching, we teach them how to teach-how to explain science to a three year old-and how to hire a team of teachers."
The same holds true for marketing and sales. "Our program is a little like a cookbook," says Gold-Dworkin. "The manuals are set up so that people can, once trained by us, follow the procedure and implement it successfully." Franchisee set-up includes supplies to teach 40 students the first eight lessons.
Little Scientists is niche marketing at its best. "There is nothing else out there for teaching science to grade school children and pre-schoolers. That makes our program viable and successful."
Not much is luck
Powell tells prospective franchise owners not to think of buying a franchise as buying a job. "To succeed in business, a person has to be able to self-assess and look objectively at using the business to obtain their personal goals. In our society, you are told that, if you go and do the thing you love, you'll be successful. But when you look at the statistics, those who launch a business from background, experience, or love have the highest failure rate of any."
Powell says there's a better way to predict success. "A prospective franchise owner needs to take a look at personal strengths and weaknesses, then compare that to what a particular franchise demands."
Such self-assessment must be harder than it sounds. Over 95 percent of The Entrepreneur's Source clients end up in franchises that they admittedly would not have looked at on their own-or in franchises that they had looked at and discounted prematurely because they couldn't self-assess. "Most people look at a business and ask 'What is my job going to be there?' But in buying a business, that's not the step you want to take. You want to ask 'How can I go to work every day in that business-manage, market and promote it successfully?' There's a big difference."
Where does luck come in? "Luck has very little to do with anything-especially not with how well a person succeeds in a franchised business."
No Fear!
Lisa Simoneau made more radical life changes in 30 days than most people make in a lifetime. She left a traditional job, bought a franchise, and moved from the east coast to Cleveland. Was she scared? Simoneau says not. The Little Scientist's franchise made perfect sense.
Simoneau had earned a masters degree in early childhood education and was plotting a career move when she caught a news spot featuring the fledgling franchise company. The concept-which introduces science to children aged three through third grade, intrigued Simoneau. "I had been working with all ages of school children from the time I was 16," she says. "I love kids."
A quick decision followed the initial phone call. "I called and talked with the people at Little Scientists, who were just starting to franchise at the time. I observed some classes and decided to do it. I just felt like it was a great program and great situation. Everything just fell into place."
Simoneau wasn't bothered by her lack of entrepreneurial experience. "I had a certainty about it. I knew I could make it work. And, for me, the integrity and personal investment of the people who built the business translated into quality."
However, Simoneau-who considers herself intelligent and able to grasp things very quickly-realized that she had no background in business finance or planning. She decided that was the aspect of the business she needed to learn more about and the company stepped right up. "They adjusted my week of training to meet my individual needs and they provided ongoing support as well."
Her attitude pulled the novice entrepreneur along. "Despite the difficulties, I chose to put my energies into building the future that I wanted-to be my own boss."
She decided to build slowly, doing everything myself-teaching classes, making sales calls, handling every aspect of the business. Her first sales call turned out to be a snap. "I pursued the recreation and community education departments. Their business is to provide services like this to the community-it's a win-win situation-and they said 'Great, lets do this.' I was charged then, very excited."
In addition to offering Little Scientists enrichment programs, Simoneau is now offering a curriculum program to schools. Simoneau thinks her education credentials helped open school doors. "People in education respect the fact that I have a masters in education and it also provides me with a framework to dialogue with people who are in education. Still, I think I would have been in those arenas either way, because people who hear about the program are calling us now."
So far, the program is selling well and building fast. "I'm not getting rich, but I am having fun. I'm able to financially manage my life without a problem and the potential for financial growth is incredible."
Simoneau stays excited. "The best part is the response from the people I work with. I just had a conversation with the principal of one of the Cleveland public schools discussing what are we going to do in that school next year and the results of what we've done over the past two years. We're on the cutting edge of making a really big difference in science education for young kids. To see the results and the excitement from the teachers and children-and from the parents-is a thrill."

® copyright 1999 Nancy Rathbun Scott
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