You aren't out there on your own when you become a franchisee. You have a business pattern: the franchisor. They are there to help and support you along the way. They want your business to be successful just like you.
Pete and Nat discuss how those franchisors are your best friend in business on this episode.
You aren't out there on your own when you become a franchisee. You have a business pattern: the franchisor. They are there to help and support you along the way. They want your business to be successful just like you.
Pete and Nat discuss how those franchisors are your best friend in business on this episode.
Pete: Woo! I'm pumped up today! Excellent. What are we talking about
today? Oh, well, first, the reason I'm pumped up, thanks for asking, is my wife just told me I only have four more college tuition payments. Are you serious? Yes! Do you know, do you know how long I've been paying tuition payments?
I've been paying, I think it's gotta have been ten years. It's right? So So this is a happy day. Only four more tuition payments. You're, you're so far away from that. You're, you're on the beginning of this thing, but I, I see the light from a standpoint.
Nat: Yeah. It's instead of making college payments, you're just going to start buying a new car every, every few months.
Yeah.
Pete: Right. That's my joke, right? Tuition is like. Taking a brand new car and driving it off a cliff every year. You know, one of the things is I think about paying all these tuition payments over the years is I've been able to do that with a small business. [00:01:00] And we've been talking over the last couple of weeks about small businesses, how important they are to the U S economy.
And then when we talk about small businesses, franchising is for lack of better terms, that small business that is standardized, it's, it's simple. Does business isn't simple, but it's a simpler way to get into business. And so I thought today what we talk about is that we talk about franchisors are a business partner.
You're working with them, right? You're partnering with them to build this business. So, I thought we would discuss what are franchisers looking for in potential franchisees. Sound good?
Nat: Perfect. Perfect. I think it's important people understand that. Yeah.
Pete: Okay, so, because it takes two to form a partnership.
Alright, so, what would be kind of the first thing franchisers would look at as somebody that wants to become a franchisee?
Nat: Well, I think it's, you know, not obvious, but it's, you know, kind of obvious financial stability or just literally the [00:02:00] working capital to be able to get a business up and running and open.
Cause it, you know, it does take money to get the things going.
Pete: Yeah. You gotta have the capital, right? So most franchisors are going to have capital requirements. They're going to say one, you have to have so much liquid capital to invest in the franchise. And number two, you have to have overall net worth because you don't want to ever go into business with not enough capital, right?
That that's a kind of sucky, Unfavorable thing to do, right? So so we don't ever want to go on a capitalized. So they want to make sure you're financially stable, that you can be successful. All right. What would be a second thing franchisors look for?
Nat: I think they're going to definitely look at your resume, basically, and see what your business acumen is.
Like past performance is a good indicator of future performance or success. So seeing, you know, does this guy have you know, management skills? You know, what, what exactly has this person or candidate done in the past?
Pete: Yeah, I think it's the, it's that business acumen. It's those leadership skills. [00:03:00] You know, and a lot of people think, well, if I invest in that franchise, I have to have experience in that industry, and that's not the case.
Generally speaking, we gain acumen from working in these executive positions, and we gain leadership skills, and we take that acumen of leadership skills to invest in a franchise. So a franchisor wants to know that you have a certain amount of business acumen so that you'll be successful, but that doesn't mean you need to have experience.
Like if it's a painting franchise, you don't need to have any experience in the painting industry. You just have to have that acumen in those leadership skills. Yeah, I feel
Nat: like a lot of times I actually like team building or people skills is kind of one of the master skills. Because if you can build a good team, you can build a great business.
Yeah.
Pete: What would be kind of a third thing franchisors look for? They're, franchisors, let's be honest, they have really big egos, right? So they're going to be looking for candidates that align with their brand values and they're not going to be super flexible. Like if you don't freaking love the brand,[00:04:00] it might be hard to get in.
Yeah. Yeah. And you know, they're, they're protecting their brand. The brand is so important to them and you have to be, your values have to be aligned with them. Right. So if for example it's a franchise, it's fast food, but you're, you know, and they believe that they're providing good, affordable food for people.
Right. And, and, but somebody might say, listen I can't get on board with fast food. I don't believe it's healthy. They wouldn't be a good fit for that, that business. The brand wouldn't want the, the franchisor wouldn't want them. They don't align with their, their brand.
Nat: I mean, ultimately, you're going to want to, you know, be able to eat, sleep and, and breathe the the brand you're going to have your, like, you know, again, I know we talked about Jimmy John and some of these other brands a lot, but you're going to, you know, potentially have a car wrapped with their logo, you know, it's like you need to be aligned with it.
Pete: Yeah. Yeah, you and in many cases, you are the brand in that community, right? And so you, you have to be the [00:05:00] ambassador. Yes, yes, absolutely. Right. Perfect. All right. What would be another thing
Nat: that they'd look for? I think if you did have relevant skills or experience, you know, that would be something they look at.
You know, sometimes that could be a positive. Sometimes that could be a negative. I know in senior care, a lot of times, if you have too much health care experience, that actually can kind of work against you. But they're definitely going to look at your experience and skills and resume and all that.
Pete: Yeah, it kind of goes back to the acumen, but they go a little bit deeper, right? They want to kind of understand, you know, what you've done in the past. I look at your education. They'll look at, you know, your abilities from a standpoint. And again, it doesn't necessarily have to be in the specific industry, but what skills do you have?
Like, I don't know how to turn on a computer. Or, you know, or listen, I have a hard time speaking to people, public speaking, things like that. So they want to get to know you and understand that you've got some of those core skills that business people need to be successful.
Nat: Yeah. The other thing I think that they're also looking for [00:06:00] is, they're looking for people that can kind of stick with the program or kind of work a process, if that makes sense. So they're, I don't want to say necessarily compliance, but they're willing, like people that appreciate the fact that franchises are very structured and have set processes, you know, whether that's operationally or, you know, you know, brand and marketing, sales and marketing.
Franchising is really all about consistency and quality. If you're kind of the guy that's like, oh, you know, I really think we should do this, you know, over here, you know, ultimately, you might not be an awesome fit because they really are looking for kind of compliance. They're looking for guys that can execute a plan.
Basically,
Pete: let's be guys and gals. Yeah, absolutely. I mean, you think about it. It's just. If you're a maverick, it's my way or the highway, a franchise isn't for you, right? And they want you to be able to follow a system. And what a lot of people don't realize is as they're evaluating the franchises, they're going through the franchise investigative procedures to evaluate a franchise.
They're going [00:07:00] through a series of steps and the franchiser is looking at how they're going through those steps to evaluate the franchise, right? Like if, if you miss calls. Right? They're going, ah, we're not so sure. Or, you know, you're going and you're not following the system. You're not reading stuff.
You're not doing what you need to be doing to get to the next step. That's an indicator that you might not be a good match for the franchise.
Nat: Yeah, you only get one chance to make a good first impression. And I think people need to keep that in mind when they're working, exploring franchises. You know, when you have an appointment set, you need to be on time and in an environment where you can focus.
If you want to have, you know, go to the second call, third call, fourth call, and they give you homework in between, you know, you really do need to do your homework and be prepared, like show up prepared just like you would, you know, for something that was important to you. Yeah, absolutely.
Pete: I mean, it's, it's just part of it.
You know, I think the other thing as franchises look for is your ability to be customer focused. You know that desire to satisfy [00:08:00] customers. Yeah.
Nat: Yeah the you know Sometimes you go to resorts or something like that and you ask for something and there's like my pleasure You know, it's like it's kind of like that.
It's like, you know raising the bar in industries where maybe you know people aren't used to having great experience even when you think about like Plumbing or heating and air conditioning like when those guys come into your home like the good companies, you know They'll they'll like have this whole thing where they're putting on the booties and you know They're putting down tarps and it's just thing making an awesome customer experience
Pete: Yeah, you know, and you see more and more franchisers talking about their net promoter score.
Yeah, and I think that's a great measure, measuring stick for that or measurement. And but I see more and more of them focusing on it because it is so important. And I think that's a way to keep your franchisees focused on that customer satisfaction. So, so again, franchises are looking for people that have that passion to focus on or satisfy the [00:09:00] customers.
All right. You know, as we look at it, one of the other things is, is that as you go through the process of evaluating franchises, franchises that are looking for, do you have the communication skills necessary to be a franchising? Yeah,
Nat: I, I totally agree because it is, you know, communication is one of the most important things.
And you know, it does, even as you're beginning that process, exploring franchises, they're definitely keeping an eye on you, you know. Seeing if you're, you're taking time to structure your sentences and, and put in some punctuation. And make some, and make some sense, let's be honest, right? Well, I don't
Pete: know how I became a franchisee, right?
But anyways absolutely, right? You have to be able to, because you're going to be, you're going to be communicating to people in the community. You're going to be communicating to employees and stuff like that. And a lot of times, franchisers, especially at like the confirmation day, discovery day, where you go to the corporate headquarters, they're looking for you to participate so they can learn [00:10:00] about your communication skills.
Right. And I've had people that go to a confirmation day and they sit in the back of the room and they don't communicate, they don't talk, and that's how you get turned down, right? They gotta, they gotta know that you have the ability to communicate, to, to talk about the business or, or talk about things that are important.
And then, what would be kind of the last thing as we, as we think about Franchiseurs evaluating a potential business partner?
Nat: I think what, it means a lot. Going back to what I was saying a little bit earlier about franchises love, you know, their brand, right? They're very focused on that. So what's really important to them is when people buy into the brand and then have a long term vision for the brand.
Like I can see myself doing this. I can see myself passing this on to my kids. Like they love to hear, you know, people that are, you know, just all like bought in or sold out to the long term vision of the brand. Yeah, I see. And they're excited about being a part of the growth,
Pete: right? [00:11:00] Yeah, I think it's buying into the mission, right?
We want to find affordable sub sandwiches for everybody, right? High quality, fast, whatever their mission is make a difference in people's lives. In home care, right? Yeah. You understand that industry, right? Taking care of mom and dad in a way in which you as an individual would do it. Absolutely.
Okay, very good. So again, franchising is so important to the U. S. Economy as we've talked about it and franchisers need good franchisees and they're going to evaluate people to find out, you know from a standpoint, would you be a good business partner? Yes. Yeah,
Nat: it's definitely a two way street going through the process.
So it's important to put your best foot forward with that.
Pete: Awesome. All right, Nat. I'm back off to get another Jimmy John sandwich. You got me hungry again. So, okay.
Nat: Enjoy.