Fran X | 5 Burning Franchise Questions and The Truthful Answers

The Next McDonald's (Big Idea)

Give Franchise Buyers Everything ... In Your Item 19 Financial Performance Representations

Well, not everything but, for many franchisors, more than what’s in your current Item 19.

Your Item 19 needs to reaffirm with your brand...brand story ... and the operational differentiators that make your brand unique.

How do you do this?

Well, at a baseline level you need an Item 19 and you need Gross Sales and Operating Profits Data …

Then you need to provide a data deep-dive that gives franchisee candidates and brokers better insights into your business.

The type of deep-dive data that you’ll need to deliver, naturally, will depend on what you are offering and your business model, e.g., retail, service, mobile, part-time, full-time, lifestyle, ROI …

Some data ideas for exploring these deep-dive metrics:

• Your Customers - Gross Sales from repeat customers vs. new customers; average sales; customer demographics
• Your Operations - Gross Sales breakdowns between categories of services; categories of products; service sales vs retail sales
• Your Margins - Cost of Goods Sold; Cost of Services Provides; Customer Acquisition Costs; Operating Costs
• Your Marketing - Customer conversion ratios like Contact Center Calls to converted estimate, or web visitors to customer contacts…
• Your Trouble Spots - Not everything is perfect ... franchisee validation is built on managed expectations and honesty. Build honesty and transparency into your Item 19 and, that may even mean, including extremely relevant but not so favorable data.

Do not follow the advice of King Leonidas in your Item 19.

News You Can (Actually) Use

• What you talkin’ about Wills? Are franchises small businesses?
• The death of the restaurant reservation?

Killer Brands

Established in 2014, Chiddy's Cheesesteaks has grown from a food truck to a local storefront based, fast-casual hot spot. The founders at Chiddy's Cheesesteaks started franchising their business during the pandemic and adapted as the market rapidly changed. They even saw growth last year.

Check out their story here.

Franchisees Kicking Ass: The Franchisee Is King

TruBlue Total House Care's Newest Owners Shatter Sales Records in Their First Months

The early success of the brand’s newest franchise owners mirrors the overall growth of the brand, which is bounding into 2022 with strong systemwide momentum.

TruBlue Total House Care, a fast-growing, 60-plus unit home maintenance and service franchise, has hit the mid-year mark of 2021 with nearly doubling year-over-year system-wide growth-driven, in large part, by the success of its newest franchise partners.

“We’re incredibly proud of the numbers we’re seeing from our newest franchisees,” said Sean Fitzgerald, president of TruBlue. “Over the past few months, some of our newest owners are off to the fastest start we have seen in TruBlue history, hitting record-breaking sales within their first month of business.”

Mark and Julie Odell, who recently opened TruBlue Total House Care of Centennial in the Denver, Colorado market, are one such example: the couple broke the brand’s first month sales record back in February of this year.

Yo Broker, Sell My Franchise

Top Franchise Broker: Jose Torres, FranNet

After working as a corporate executive, Jose Torres decided to take everything he had learned in corporate America and utilize it in the franchising industry, first as a franchisee and later as a franchise consultant with FranNet. Now, for 13 years, he has been helping potential franchisees and franchisors find the perfect match.

Torres believes a successful franchise consultant is a subject matter expert, both in the franchise industry and the local landscape where a client is hoping to open their business. “You have to be able to guide your clients toward the right decisions with regard to business ownership,” he said. “Help them look at the local landscape where they’re looking to put their business, and help connect them to that local market.”

First and foremost he advises potential franchise owners to be honest with themselves and their goals. “You have to really reflect and understand if you’re fit for business ownership,” he said. “Why are you doing this? Because you can’t find a job? That’s a terrible way to go into business. You want to make sure you have the motivation and the self-confidence to do it.”

Torres also believes that the current market is incredibly diverse, and franchisors should be looking for more than just the status quo in franchisee candidates. “If franchisors are looking to grow in a particular region, they have to recruit franchisees that reflect that local market in terms of gender, culture, age group, etc. Because the more they find a candidate that reflects the target population they’ll be serving, the better they’re going to do,” he said. “White males aged 45–55 are what has been typically recruited for years and years, but that’s not going to cut it anymore. Millennials are playing a big role in disrupting almost every industry. There’s also never been a better time for women to go into business. We have to get out of that mentality that there’s a particular type of franchise candidate who fits our model.”

Watch the full interview above, or click here to watch it on YouTube.

If you are a potential franchisee looking to invest or a franchisor looking to attract new candidates, contact FranNet at https://frannet.com/.

The Bottom Thoughts

Each week, Nick & Charles go head-to-head, discussing the hottest topics in franchising. Problem is, the issues rarely change. However, sometimes the little nuggets do.

Are you in our FREE franchise Facebook community. If not, join.

Also, in this week’s discussion, the questions are answered. WATCH THE VIDEO here -- and subscribe to our YouTube channel for more insights.

Question 1: Will franchise expos/shows/conferences return?

Question 2: Can brokers solve your development woes?

Question 3: If I want to double my growth in 2022, what should I do right this second?

Question 4: What truths need to be in Item 19 to win at franchising?

Question 5: What bold predictions can be made for 2022?