L-5 Capital Chief Development Officer Scott Thompson has spent nearly two decades in the franchise industry in almost every role imaginable
Franchise executive Scott Thompson’s career has evolved at the same breakneck speed the industry itself has. Thompson has been a multi-unit franchisee, master franchisee, franchise supplier, broker and has served on the executive team and board of multiple franchisors. His role as Chief Development Officer at L-5 Capital challenges him to draw on all of his previous roles to ignite growth for the brands under L-5 Capital’s umbrella. 1851 got the chance to consult Thompson’s well-versed opinion on all things franchise development.
How did you first get involved with the franchising industry?
Eighteen years ago, I fell into this company called fitness forever, a one-on-one private training franchise based out of Denver. I began working for them and eventually took part in their leadership program, where I learned how to run a franchise as a manager, continuing on into ownership from there.
What do you love about the industry?
My favorite part of franchising is helping people build legacies and wealth for their families. Franchising is a great vehicle for people who have gained skills in different areas over the years working for someone else. The franchise model allows these peoples to apply those skills as their own boss, creating something sustainable and successful to pass down.
What do you wish you could change in franchising?
Lots of franchisors that come onto the scene that are all about the sale and not enough about unit profitability. If I could take those companies and put them through some sort of certification process and make sure that they have a substantial management team in place that has been trained in the franchise model, knows how to build a sustainable system and is focused on unit economics, it would be a better environment overall.
What's the biggest change you've seen in the industry since you started out in franchise development?
I think more and more decisions are being made by leveraging data. As a franchisor, if you're not tech-focused and using it wherever you can to innovate, you’re going to be left behind in the acquisition of new franchisees and the success of your existing ones. Artificial Intelligence and data analysis leads to more comprehensive learning, which leads to more intelligent decision-making from a management perspective
What makes a great franchisee?
Someone with drive and passion. Someone who understands the ‘why’ behind being in business for themselves. Someone who can follow and add value to a system. Lots of franchisees want to recreate the wheel when coming to a brand, but those that understand that the current model has been tested and proven are the ones poised to succeed. When a franchisee achieves sustainability and success, they should then seek areas in which to add and innovate.
What’s the number one thing that sells franchises?
People! You have to have a great leadership team, values and culture in place to grow. You have to tell a great story about how you’ve helped people from all walks of life find financial success and achieve independence as their own boss. Identify what those touch points are and recognize who not to bring in. It’s the people behind the brand that ultimately attract the right franchisees.