WHY SATISFACTION MATTERS
By all accounts, 2018 is a great time to buy a franchise. Many franchise companies are coming off of their best year in the past decade. Many franchise operators are experiencing increased revenue growth and profitability. And on top of that, the recent tax reform efforts by congress promise to create an improved economic environment for small business ownership.
Yet, no matter how good things look for franchising, nothing guarantees your success as a franchise owner. Prospective franchisees must thoroughly research any opportunity they are considering to determine if the concept is viable and the right fit for them.
One of the best ways to know if a franchise opportunity is really as good as it appears is to review the company’s franchisee satisfaction data. Not all brands survey their franchisees, but those who do offer a wealth of information on the company’s leadership, culture, training and support, financial outlook, and franchisee community.
In the past 18 months, we have surveyed over 28,000 franchisees to find out exactly how satisfied they are with their franchise businesses. We’ve researched hundreds of different brands, and our Top Franchises list this year includes the best of the best that franchising has to offer.
THE BENEFITS OF FRANCHISING
Franchising offers many advantages over starting a business from scratch, which has led to it being one of the fastest-growing sectors of our economy. Clearly, one of the biggest benefits of investing in a franchise is that you are investing in a proven concept—a business with a successful track record and many successful franchisees.
A good franchise company will provide all the tools you need to succeed—training, marketing, mentorship, coaching, and ongoing support. All you need to provide is the drive and the passion to make the business thrive in your local community.
We’ve done the hard part of identifying the very best franchises available based on the actual performance and satisfaction of their owners to start researching. All the companies on our list offer great franchise opportunities. Now, it’s your job to find the one that really gets you excited about owning your own business.
FINDING THE RIGHT FRANCHISE FOR YOU
We know that investing in a franchise is a big decision. Not only does the business model need to be the right fit for your skills, but you need to find a company that’s the right cultural fit for you as well.
“Culture is a very important part of our brand identity, and we have taken a very strategic approach to cultivating our culture,” explains Sean Manning, President & CEO, Payroll Vault. “Having a conscious understanding of culture allows culture to percolate and develop at each organizational level, and straighten the cultural experience for everyone in contact with the Payroll Vault organization.”
“We believe strong leadership creates a healthy culture,” says Tim Williams, Director of Franchise Development at DoubleDave’s Pizzaworks. “One of our core values is to build open and honest relationships through communication. We foster consistent brand messaging and offer continuing education, as well as top-level field support to reinforce the attitudes and behavior of the leadership staff who set the tone for the brand. Optimism, integrity, teamwork, and recognition are all part of our consistent message.”
As you explore different franchise opportunities, each one will have a different feel when it comes to their company culture (see Why Culture Matters). Some companies are very formal and professional. Others have a more laid back approach to business and life. Ask yourself… “Are these the kind of people I would enjoy working with?”
When we asked Mark Hemmeter, CEO of Office Evolution about their unique company culture, his eyes widened. “Our culture is comprised of five key values: Win-Win, Simplicity, Authenticity, Ownership and the one that seems to resonate the strongest, Ohana—a Hawaiian word which translates to “family”, but more globally, as a group of people working together for the common good of all.”
BUILDING YOUR DREAM BUSINESS WITH REALISTIC EXPECTATIONS
While franchising offers many great opportunities, it’s important to understand that owning and operating a successful franchise requires a lot of hard work. Franchising is not some silver bullet to overnight riches. The successful franchisees that we talk to everyday have all worked really hard to get to where they are.
“It’s important to have realistic expectations of what business ownership is all about,” explains Eric Stites, founder and CEO of Franchise Business Review. “Most franchise businesses—like any new business—require several years of hard work before they start to take off. Many franchisees tell us that building their franchise business is the hardest thing they’ve ever done.”
It’s important to be honest with yourself before investing in a franchise business. Are you truly passionate about this business? Are you really willing to put in the hard work to make your new business a success?
We asked franchise executives how they insure new franchisees are coming into their systems with realistic financial expectations for the business, as well as a detailed understanding of the time commitment their new business will require.
Payroll Vault’s Manning put it this way: “Entrepreneurship is exciting and should be fostered with a clear understanding that risks exist, and if discussed, can be mitigated to focus on opportunity. Business ownership success is more of a journey than instant gratification. The journey, resulting experiences, and knowledge you gain are all added values to business ownership.”
“Our goal is to be as transparent as possible,” shared Jim Westover, VP of Operations at Yogi Bear’s Jellystone Park Camp-Resorts.“ We have an experienced team that educates candidates on profitably operating a Jellystone Park. We provide research and site demographics for each location, conduct prospective owners’ workshops onsite at a park, and invite candidates to our annual franchise meeting where they interact with current owners.”
Talking with franchisees is an import step in your franchise research. Most franchisees will be very honest about their business experience, and the challenges they’ve faced and overcome to grow their business.
“We encourage our candidates to read through our franchisee survey from Franchise Business Review, as it covers a lot of what ownership entails,” adds Westover.
“Our franchise candidates are carefully vetted before awarding them with a license to join the Ohana to ensure a good fit for all,”says Office Evolution’s Hemmeter. “We insist on multiple validation calls with our existing franchisees so that candidates get the story from the mouths and minds of their future peers, not just a Franchise Disclosure Document.”
Speaking with franchisees will provide you with great insights on the business you are considering. But don’t just stop there. Get out and visit franchise locations. Speak with employees and customers. Volunteer to work for a franchisee for a few days, and really get to know what goes on inside the business.
“We provide potential franchisees the opportunity to completely immerse themselves in our brand by spending time in our restaurants, getting to know other franchisees, and our leadership team,” says Angela Coppler, Director of Franchise Development at The Wendy’s Company. “Our intent is to form a relationship with a partner that shares our brand values, business goals, and desire to drive sustainable growth and success.”
UNDERSTANDING COMPETITIVE STRENGTHS AND CHALLENGES
Every successful franchise business has its own unique competitive advantages. Understanding what these advantages are, and how they will apply in your local market also needs to be part of your homework.
Franchise companies are the experts at whatever business they are in, and they can help train you and support you in that business. However, you need to be the local market expert. How many potential customers are in your area and how will you attract them? Who are your competitors and how successful are their businesses?
“The Payroll Vault brand is very community and client service focused,” says Manning. “We leverage the available local resources and take a consultative interest in the people and businesses we serve and make it part of our culture. Payroll Vault’s vision says it best… "We are focused on being the most recognizable payroll outsourcing company with the highest customer satisfaction."
The food sector is one of the largest and most popular in franchising – yet also one of the most challenging when it comes to competing for consumers’ dollars at the local level.
“As I look at the vast choices in our market segment, it’s tough to isolate differentiators,” says DoubleDave’s Pizzaworks Director of Franchise Development, Tim Williams. “What we are is authentic, following one of our core values of being adventurous, creative and open-minded. We build a positive team and family spirit through a creative and fun atmosphere, delivering WOW through service.”
GROWTH AND CHANGE
Most franchise agreements are at least five to ten years in length—some longer. When you are exploring franchise opportunities, it’s also important to understand the long-term growth plans of the brand, as well as how the industry may change in the years ahead.
Change is constant in franchising. New technologies have helped make businesses much more efficient and effective. Some have even completely changed industries overnight (think Uber).
How might the business that you are thinking about opening be impacted—both positively and negatively—by new technologies and other changes? The best franchise companies are innovative and embrace constant change as part of their culture. Others are slow to embrace and adapt to change, which in some cases can be lethal (think Blockbuster).
“We’ve been operating for 30-plus years, so we understand the importance of making changes related to design, technology, operations, etc. to stay current with our franchisee and customers’ expectations,” explains CEO Mary Jane Riva at Pizza Factory. “We have a team member dedicated to strategizing for our growth, and this includes mapping out where and when advancements occur. As we make changes, we want to improve the customer experience, while also staying true to who we are—We Toss’em, They’re Awesome!”
“For the past few years technology has not only improved our organizational efficiency,but we can also leverage technology to support opportunity for the business clients and their staff that we support with payroll services,”shared Payroll Vault’s Manning. “Our ‘Why’statement is ‘Re-Defining How Small Business Does Payroll’. That puts us in great position to evaluate change and find the opportunity behind it to help others be more successful in the future.”
A FINAL WORD OF ADVICE
We know that your head is spinning—full of questions about taking the leap to franchise ownership. To that end, we asked a number of franchise executives what tips and advice they have for franchisee candidates.
“I am often asked what skills it takes to be successful with a Payroll Vault franchise business, and the answer is simple—the skill to see and learn new skills under a clear vision,” says Manning. “Success leaves clues, and those clues are the foundation to your future success.
“Be actionable and willing to execute proven methodologies,” continued Manning. “Look at entrepreneurship as an adventure,and the satisfaction you receive from the journey will naturally emerge. When you thrive on the entrepreneurial experience it is easy to love your career path and the work you do everyday.”
“There is no such thing as too much research,” says Westover of Yogi Bear’s Jellystone Park. “Whether you are a potential operator or investor, make sure the brand is a good fit both personally and financially. Talk to as many franchisees as possible. Franchise Business Review surveys, which provide financial insight as well as feedback on how franchisees feel about the brand, are a great resource.”
Tim Williams put it this way: “I would say make sure your franchise opportunity has a well established management training program and continuing support. At DoubleDave’s Pizzaworks, we have a well designed and extensive six-week management training program that we offer to either a new franchisee to help learn the ropes or an existing franchisee that needs additional support.”
And finally, from Mark Hemmeter at Office Evolution, “Don’t rush… take your time to determine what is important to you and seek out the opportunities that can provide them. Emerging brands can be great ground floor opportunities; so don’t discount them in favor of over-saturated, mature brands.
“Stay away from fad businesses and those that are prone to high fluctuations during recessionary times,” continued Hemmeter.“ Be sure you are capitalized properly to ensure you can get through the ramp up stage to profitability. Find a franchisor that is operating company-owned locations in tandem with their franchise locations so they can test thoroughly before rolling out new initiatives.”
Great advice from some of the best in the industry! Take your time, do your homework, talk to franchisees. In the end, invest in a business that you are passionate about and gets you excited.
We wish you the best of success!
Over the past several weeks, the novel coronavirus has prompted in-home health care companies to intensify their franchisee support efforts. Within days of the outbreak, franchisors stepped up their communications; sourced and shipped scarce personal protective equipment (PPE); and spent hours synthesizing and reporting out policy changes that would affect how their franchisees could operate within their regions, states, and municipalities.
In this episode, it was our pleasure to speak with Jesse Johnstone, the President of Fibrenew. He explains to FBR's CEO, Eric Stites, how Fibrenew is designed to succeed in both good times and bad and discusses the way they're supporting their franchisees in the midst of the COVID pandemic.