Alicia Miller Literally Wrote the Book on Franchising and Private Equity

Alicia Miller, founder and managing director of Emergent Growth Advisors, has had a successful, winding career as an entrepreneur. As an author and former multi-unit franchisee, Miller's trajectory from corporate America to franchise ownership has given her a unique perspective on the importance of responsible franchising and the best methods to reach franchise success.

Initially drawn to entrepreneurship by the desire for a different lifestyle, Miller transitioned from a demanding corporate job to owning multiple Sylvan Learning* Centers across three states. 

“I took the crazy route,” Miller said. “I acquired all 11 at the same time, and they were in distress when I bought them.”

Despite the challenges, Miller's dedication and strategic approach led to significant growth and an eventual successful sale.

Miller believes in the importance of strategic planning and understanding the franchise lifecycle, particularly with regards to exits. Miller advised entering a franchise opportunity with an exit mindset so you’re prepared when the time comes. Miller's proactive approach to understanding the dynamics of franchising, including the impact of private equity, is evident in her recently released book, “Big Money in Franchising: Scaling Your Enterprise in the Era of Private Equity,” which explores private equity's influence on the franchise sector.

Miller is critical of certain practices within franchising, such as the neglect of franchisee support, and touched on the challenges faced by emerging brands. Miller advocated for responsible franchising, emphasizing the need for franchisors to prioritize franchisee support. 

“Buy more corporate units before you start franchising,” Miller advised. “If your end is a big number with a PE exit, then you're going to need the extra cash flow. Buy yourself the time, don't starve yourself. Don't open two and then start franchising, because you’ll have no money to support those franchisees and you’re going to have to take a partner sooner than you otherwise would have if you had just built it thoughtfully so that you had more cash flow from corporate units … Now you can delay and you can not take those phone calls as early and you'll get a higher value.”

Miller addressed the role of brokers and the importance of explicitly defining target franchisee profiles for successful growth. 

“If at any point you would like to have a conversation about what a good exit looks like and how to prepare for it, just reach out to me,” Miller said. “I'm on LinkedIn or you can find me at emergentgrowthadvisors.com.”  

Watch the full interview here. 

Check out the summarized transcript below:

Powills: How did you first get involved in franchising?

Miller: Well, like many people, I came from a corporate background, working in Chicago for a large applications company. After having my daughter, I wanted a change and decided to work for myself. I researched and found the Sylvan Learning System, becoming a multi-unit owner with 11 schools across three states. After selling my business, I decided franchising was where I wanted to be, drawn by the community and opportunities it offered.

Powills: Jumping to Sylvan, did you start with one unit or acquire multiple at once?

Miller: I actually acquired all 11 at once, which was a bit of a crazy route. They were in distress due to the previous owner's overextension and changes in the tutoring industry. It was a challenging but valuable experience, teaching me a lot about franchise best practices.

Powills: How did you go about selecting Sylvan and what was your due diligence process like?

Miller: Looking back, I wish I had taken more time to explore other franchise concepts. Sylvan seemed to align with my goals quickly, especially since I was already interested in child services. The situation moved fast because I was in the market, but I would advise others to take more time in their decision-making process.

Powills: Were you conflicted about being an entrepreneur versus a franchisee when starting out?

Miller: Not at all. As a working mother used to wearing multiple hats, I was comfortable with the various roles. I'm a consultant, entrepreneur, investor, and writer, among other things. I embrace the diversity of responsibilities.

Powills: Did you have an exit strategy in mind when you entered franchising?

Miller: Absolutely. I aimed to sell within 10 years, before the license agreement renewed. I ended up selling in five due to increased interest in buying territories. Having an exit strategy helped guide my decisions throughout.

Powills: Your book delves into private equity's impact on franchising. Can you share a bit about its content and the current state of Mergers & Acquisitions in franchising?

Miller: "Big Money in Franchising" explores the impact of private equity on both brands and franchisees, presenting case studies and actionable insights. Private equity has brought both positive and negative effects, offering liquidity options for franchisees but also raising challenges in responsible franchising practices.

Powills: How do you navigate the balance between growth and responsible franchising?

Miller: It's crucial to prioritize franchisee profitability and support. Rushing growth without investing in infrastructure and support leads to unsustainable practices and discontent among franchisees. Responsible franchising means ensuring everyone in the system is successful, not just focusing on rapid expansion.

Powills: Any advice for those interested in franchising or seeking guidance on exiting their business?

Miller: Take the time to define your goals and target franchisee profile thoughtfully. Investing in marketing and understanding your ideal franchisee can lead to organic leads and successful deals. And if you ever want to discuss exit strategies or franchising, feel free to reach out to me at Emerging Growth Advisors.