The critical factors impacting performance are how well the franchisee fits AND executes the franchise system
Want to be a successful franchise owner? Follow this simple strategy: Join a brand that aligns with to your talents, interests and goals. While seemingly obvious, too often this is not how people process information and make decisions.
There is significant performance variability in all franchise systems. Stated differently, some people will generate huge incomes while others will struggle. So, the question is, why do people in the same franchise model with the same training, support, product or service achieve wildly different results?
First, let’s remember that there is a high level of variability in all aspects of human performance. For example, some marathoners finish in half the time of others. The top 20% of salespeople generate about 80% of the revenue. Franchising is no different. Some franchisees are great performers and others are not.
The critical factors impacting performance are how well the franchisee fits AND executes the franchise system.
Again, variation in franchisee performance is almost solely based on the franchisee.
Varying Degrees of Franchisee Success
Consider that franchisees fall into 3 groups of mountain climbers:
The first group consists of folks who are on the wrong mountain. If you are on the wrong mountain, you will never achieve the vistas or summit that you hope for. These franchisees are a bad match for the concept. They lack the skills, financial wherewithal, or time to excel with the brand. Franchisees who are a poor fit represent about 10-15% of a franchise system.
For example, if sales, operational or management skills are critical to a franchisee’s success and are absent, they will not succeed. Period. Of course, business ownership requires a certain time commitment. If a franchisee cannot make that commitment, either a manager will need to be hired or the franchisee will struggle. Finally, franchisees must possess the financial means to simultaneously fund the franchise, its growth, and their personal lives. Too often franchisees fail to plan and are unable to build the business the right way.
The next group is campers. Campers reach a level of effort or income that satisfies them and they stop pushing forward and climbing. They essentially cap their performance at the edge of their comfort zone. While capable of more, this group, as a whole, is accomplishing its goals. This is the largest franchisee group and makes up about 60-70% of franchisees.
Finally, we have the climbers. These franchisees are committed to the climb and focused on achievement. They don’t stop until they are top performers. Motivated by results and testing their capabilities they make up about 20% of any franchise system.
The variation in performance is why matching is perhaps the most important aspect of franchising. Here is how to employ this construct as you explore franchising.
Being honest with yourself, your consultant and the brands. Introspection is crucial to determining whether franchising is right for you, and what brand is the ideal fit.
I help my candidates understand the important factors in fit and take stock of their skills and preferences. Creating a clear understanding of your time commitment, management, sales and operational abilities along with your drive is crucial to being a successful franchise owner.
Next, as you validate and speak to franchisees, keep in mind that everyone has different levels of skills, motivation and goals. Some people may be a better fit for a brand than you while others will not.
Validate the quality and efficacy of the franchise system and not the individual franchisees. It is the franchise model, support, product and service that matter most, NOT a franchisee’s performance.
I smile when I receive calls from candidates telling me they want to join a brand because they spoke to a successful franchisee. I simply ask, “what does their performance have to do with yours?”
The answer is nothing. The logic holds that conversations with poor performers are not a reason to jettison a brand.
Focus on the System
Your goal is to assess what your performance will be based upon the support and systems the franchisor provides. That is THE important piece of information.
If you do not believe you will be comfortably within the top 50% of franchisees, then the brand is the wrong fit. Franchisees gravitate to the performance levels they deserve. Achievement originates from a franchisee’s fit and skills, strengths and motivation.