From Small-Business Owner to Franchise CEO: Expanding the Brand While Keeping the Pulse of Day-to-Day Operations
As the leader of a growing franchise organization, your role is ever changing. Many hats will be worn over time as the brand is built.
By Stewart C. Vernon
Considering franchising your operation? Most small businesses that begin to experience a level of success will consider franchising as a route of growing their brand and their overall organization.
Franchising is a tried and true method for accelerated growth; however, going from being a small-business owner to serving as the CEO of a multi-unit franchise brand is no easy transition. The initial decision to make the leap to franchise a brand is not one to be taken lightly and requires great planning and foresight prior to launching. Without this, the impact on the original location and the early adopters of a franchise system can be detrimental.
Ready to be a ‘Parent?’
Becoming a franchisor is a lot like becoming a parent. Most of us think we know how hard it will be, and we think we are prepared, but in reality neither is true. Franchising a brand is much the same. The most important element to consider is the health of the current operation. Is the business, as it operates today, ready to be put on autopilot? Can the business, as it operates today, handle being left out in the cold from time to time?
These questions must be answered on the front end, because very soon, there will be “newborn” business owners (the early franchisees). In order for them to be successful, the early franchisees will require a level of attention that one possibly did not anticipate.
Ready to Nurture Your New Owners?
The only way that a franchise organization can be built is by new franchise owners coming on board. The only way new franchise owners are going to come on board early is by seeing the success of the initial franchisees that have launched. It is quite a slippery slope in the early stages of launching a franchise brand, therefore, the first few owners must see success.
These franchise owners must be able to vouch for the value of the brand and the value of you and your team. In the beginning, however, most newly franchised brands do not have the infrastructure, the support systems, the technology, or the resources to handle this demand that is so critical.
That is where you, the owner of the brand, come in to play. Much like a parent dealing with a newborn, the demands are endless and all-encompassing in the beginning. There is no clock to punch and no “how-to” book on launching a new brand. Emerging CEOs must find a way to ensure the happiness and success of the early believers. They are putting their faith in you as much as the business concept itself.
The first few owners are taking off. There are new franchise owners looking to join the team. It is evident that this brand is really something that the world may want. Then the phone rings or a customer walks in the door at the flagship location. Reality sets in and attention is needed at the operation that started it all — your baby. It is at this moment that one must decide what path must be taken.
Are you going to be a big fish in a small pond, dominating your local town with your business, while also having a few other locations around the country? Or do you want to not just build a business, but build a brand? The dilemma here is that it cannot be both ways. A decision must be made as to which path will be taken.
To build a brand and to change an industry, the decision must be made to devote all of the time, effort, energy, and resources possible to the new franchise organization. Unfortunately for your original location, that must be done by letting go of what started it all in exchange for the hope of what can be built.
Some organizations will sell the location to a new franchise owner, some locations will hold on to it and put a high-level employee in charge, and some organizations will bring that location in-house as a corporate-owned location. No matter which choice is made, the CEO must find a way to shift focus to the franchise concept and away from the operations of the initial location.
Building Strong Relationships with Franchisees
Building a brand, while keeping your early franchisees happy, is a very challenging aspect of cultivating a new franchise system. One of the most important elements to keep at the forefront of your mind is that new franchise growth can never be as important as the happiness of the existing franchise owners.
Strong relationships between the franchisee and the franchisor, much like the strong relationships built between parent and child, can last a lifetime. It is this foundation on which a healthy organization will be built. As each tough decision arises and each crossroad is faced, think of the existing franchisees first. Let their happiness and trust in you, the CEO, be the guide. The better these relationships are, the better the entire brand will be able to weather the ups and downs that come.
Reinvesting in the Brand
Most CEOs know that there is a fine line between overinvesting and underinvesting in their businesses. Too aggressive with innovation and hiring, and a business will go broke. Too obsessed with the bottom line and hoarding pennies, and one will quickly find franchise owners heading for
With a franchise brand, this is especially true. Finding the right balance between a profitable brand, and the never-ending search for the latest and greatest tool to help the owners is a constant balancing act. It is very important to always show the franchise owners that the CEO is willing to invest in order to expand. However, it is also very important for the franchise brand to have a healthy balance sheet to show the quality of the organization and the decision-making ability of the CEO and the CFO early on.
As the brand expands over time, so will the ability to hire increasingly better talent. The people that surround you and your franchisees will be a critical component to the success of the organization. Remember, the job of the franchisor is to be the parent to the franchisees. It is your job to make the tough decisions when they may not be popular, to nurture those owners in times of adversity, to build strong and long lasting relationships, and to be the financial planner, all in one.
This could never be done as a single parent. Finding quality people to join your executive team early on is essential. It is not necessary to find experts in specific areas. Rather, find others with similar values, similar goals, and with strong work ethics. The rest can be taught with time.
Remember Your Role
As the CEO of a growing franchise organization, your role is ever changing. Many hats will be worn over time as a brand is built. Keeping a finger on the pulse of all different aspects of the organization will become harder over time. If the franchisees are confident, happy, and if the leadership team is dedicated, that pulse will continue to grow stronger and stronger over the life of the brand. In the end, that is what true leadership is all about, and that is what I have tried to do as the CEO of America’s Swimming Pool Company.
Stewart C. Vernon is Founder and Chief Executive Officer of America’s Swimming Pool Company.