Franchisors don’t always have to be right, but they must test their ideas, protect the best interests of franchisees and gain the respect of franchisees in the long term. 

By Tom Baber 

Evolving from a single- to a multi-unit operator has its obvious challenges. The skill sets are different and the need to develop and train talent becomes not just important, but essential. One obviously cannot be in multiple places and fill multiple roles at the same time. It would be an amazing thing if one could do so, and not have to manage all those other people.  

The first lesson I had to learn was that those “other people” are not going to be you, and that is not necessarily a bad thing. What can be a tough pill to swallow for some of us “strong, capable, sure of ourselves” people is that sometimes, other people have better ideas and maybe even a smarter way to do things. “Checking the ego” is not always easy, but the magic lies in knowing when to stand firm, and when to listen and adapt. 

Common Themes 

When I started my Money Mailer franchise 24 years ago, I had already been exposed to a variety of small businesses, and a nice gentleman approached me about an ad. I inquired about his business and how it worked. Quickly, I realized that handling just one side of the business – sales and design – was better than handling it all – fulfillment, delivery, support, and so on. 

Needing to handle only one part allowed for tremendous focus. The set-up of a company handling the back end – my first exposure to franchising – resonated very well with me, and off I went. As I developed clients, I started to learn about each of their businesses and realized there was a common theme among those that were expanding. Let’s call that my first multi-unit exposure.  

Whether it was a second retail location or a contractor moving from one crew to two or more, the struggles were similar, and the results were spotty. Some figured it out and built big businesses, and others made less money doing a whole lot more volume with the associated workload and headaches, while wishing they could turn back the clock. 

Were there common themes? What made one work and one fail? There were some businesses that were easier to multiply than others, but that is not what stood out to me. First, there were the obvious skill set issues mentioned previously, such as hiring, people development, system development, and avoiding micromanaging – something more aptly defined as controlling every part of the business or process. And, most importantly, there was the need to allow for and absorb ideas that are not your own, when appropriate (that “magic”). Without all or most of these traits, developing multiple units, crews, or whatever, is going to be tough. 

That is what stood out most. In franchising, recognizing the system’s role in the success is critical. The small businesses with the best systems in place, along with the other skills mentioned, succeeded, and at a much higher rate than others. Systems for things like lead generation, job or order disposition, speed, quality, training, etc. had a huge impact on overall success. Franchisees with multi-unit skill sets are essential – even more importantly, the franchisor needs the system to make multi-unit part of the culture in the brand. 

Strong, Proven SOPs 

IHOP, for example, has standard operating procedures for almost everything. When I bought my first IHOP in 2001 – my partner started as a young man with IHOP in the late 1980s and we bought our first store together in 2001 – the company was in a bit of a transition on the support side. Brand standards were evolving and becoming more rigid, and new programs were popping up, seemingly all the time. It was sometimes bumpy, and like all relationships, constantly requires work and good intentions on all sides for maximum success. 

But listing those systems at IHOP, and many other brands, including sales, training, food storage and prep, greeting time at the door, cleanliness in food areas, restrooms, inspections, secret shoppers and many more, could go on for pages. 

Because the SOP is so strong, and proven, the burden shifts from the owner focusing on those factors to focusing on making sure the teams – especially management – live up to and surpass those expectations already set. While the franchisee is ultimately responsible, living up to the day-to-day expectations, which are the proven model for success in the given system, becomes the responsibility of the team at the unit level. 

All Systems Are Not Equal 

Some will say: “Well, that’s franchising.” This is true, but a lot of systems are far more “franchising” than others. Impactful, repeatable and trainable are must-haves for the multi-unit franchisee from their franchisor. I have had enough conversations and done enough consulting to know that not all systems are created equally. 

And about that “proven” thing – don’t push changes, ideas, SOPs, or anything else on a system until you have proven efficacy. Ideas are great, and a system needs to be fresh. As much as possible, however, ideas should be vetted and tested before sent to the system for implementation. 

A franchisor does not have to always be right when making a call. No individual or group is, but franchisors must test their ideas, have the best interests of franchisees at the forefront, and gain the respect of franchisees in the long term. The franchisor does not even have to do what is popular at every turn, but must have all stakeholders in clear focus when executing. And, of course, franchisees need to be open-minded and engaged. Multi-unit success is about the franchisees and the brand’s skill set, the latter being more important than the former. 

Tom Baber is a multi-unit franchisee with Money Mailer and IHOP. He serves as the Chair of the IFA Franchisee Forum. Find out more about Money Mailer and IHOP. 

Search