FranDev Players: Mark Siebert, CEO of iFranchise Group

Mark Siebert literally wrote the book on franchising. And then he wrote another one. 

A franchise consultant since 1985, Siebert’s business, iFranchise Group, works with franchise brands big and small on strategizing how to grow sustainably and responsibly.

And Siebert’s talent for producing foolproof processes and optimizing business models has translated beyond the franchise industry. Siebert counts Swarovski and the U.S. Navy as clients, so it’s safe to say his franchising knowledge has taken root across a wide range of industries. 

1851 caught up with Siebert to talk about the economy, franchise development and why 2021 might just be the best year for franchise sales in history. 

1851 Franchise: Tell us about your company. 

Mark Siebert: We’re advisors to franchisors and companies who want to franchise. About 60% of our work is with companies getting into franchising for the first time. Those companies have some fairly predictable needs in terms of strategy, developing quality control, development for recruiting and understanding how to grow the organization. We provide services in each of those areas. 

We start by looking at franchisability. We offer manuals, training programs, ebrochures, sales training, etcetera.

The other 40% are franchisors with some type of problem. Typically a franchisor comes to us with a defined problem. They’re not selling as fast as they want, not getting good leads or they have problems with franchisees. It could be an unusual situation. One major franchisor came to us and they had different metrics for all their different divisions, and they wanted us to standardize them. We also help with building franchise advisory councils. 

We provide anything and everything. Another miscellaneous portion of our business is producing operations manuals for the U.S. Navy. We do a little work with non-franchise organizations. Swarovski is a client, they sell goods as a licensed distributorship model. 

1851: How did you get into franchising?

Siebert: I used to work for a different franchise consulting company. After some years of doing it, I decided that I had a different idea for the business model, so I went off and did it on my own 22 years ago.

1851: Are there any keys to consistent franchise growth?

Siebert: Making your franchisees successful. If you take it from big picture down to small, start by making your franchisees successful. If you want to do that, make sure you’re being super selective about who you take on as franchisees and be willing to say no to someone who doesn't look like a fit. A lot of reasons franchises fail is they don’t have the right concept or the right franchisees. 

Some franchisors sell franchises to individuals that don’t have all the necessary skill sets or are not well capitalized. They run the risk of a failed franchisee, and nothing sinks a system faster. 

Also, don’t sell faster than you can support the franchisees. Even a well-qualified franchisee will fail without the right support. Number one is selling to the right people, and number two, make sure those people have the adequate bandwidth for the rate of growth.

1851: What are the biggest hurdles to successful franchise growth right now?

Siebert: Franchise marketing sales have transitioned over the course of the last nine months where the lead generation efforts that have traditionally been a big part of the franchise marketing had to go through some changes. You don’t see franchise trade shows anymore.

So what do you do to replace that lead flow? The sales process has changed. Discovery days used to be commonplace but now it’s not as common. People are doing virtual discovery days to adapt to that. 

We’re in a period of transitory adaptation, where FZs need to change the way they think about the world.

1851: How did the COVID crisis affect franchise growth opportunities?

Siebert: From my perspective, 2021 has a very good chance to be the best year for franchise sales ever. It’s somewhat callus to say but, in franchising nothing beats a good recession. There’s a number of factors that are going to drive this franchise sales boom. 

10 million people are unemployed now who were not unemployed a year ago. That extra four percent of unemployed people are not all going to find their way back to getting a job. At some point they’ll realize when they’re waiting for their jobs to come back, and the only way they’re going to come back is as a delivery driver for Amazon. If they don’t want to take on that job, they’re gonna have to go into business for themselves. 

Unlike the 2008 recession, you’ve got a much better availability of credit, historically low interest rates and asset values that have increased. In 2008 you saw a 40% drop in stock and housing prices. This year, the housing prices have increased 4.3% year-to-date and the stock market is setting new records every day. 

So people who had assets before the recession started still have those assets to a large extent, and they can leverage them in 401(k)s and home equity to buy a franchise business.

At the same time, you’ve got a large number of people who are multi-unit franchise owners for retail operations looking at a perfect time to buy. Multi-unit operators looking at the franchise space might be someone who already owns 30–50 restaurants thinking, “I can get prime locations at below market rates.”

There are a lot of failed businesses out there and a ready availability of labor, which a year ago they didn’t have. They’re going to have the ability to lock those in over a long period of time at low interest rates. 

These bigger companies with ready access to capital are going to be able to get into and buy some large area development deals. That’s gonna also fuel any franchises that are selling these larger real deals.

That being said, there’s a lot of blood in the water. It’s a great year for franchise sales, but not a great year for franchising completely. There are a lot of failed franchisors whose concepts did not adapt enough. 

From a franchise sales standpoint, for companies with a concept that works, this may be the best environment they could ask for. 

1851: Are there any common mistakes you see franchisors making when trying to grow?

Siebert: I mentioned a couple of them before: not qualifying candidates well enough, growing too fast. I would add to that, if they’re a new franchisor, not staying geographically focused. A lot of times you see a shotgun approach to growth. They’ll sell franchises all over God’s half-acre. Sometimes they do it because they’re under capitalized and need capital. That’s a bad reason to do it. 

Other times they do it because they have a lack of understanding about how franchise marketing works and they believe if they have a hot prospect on the line for some distant market, this may be their only opportunity to close them. People who understand franchising know finding franchisees isn’t the hard part, it’s growing successful franchisees. You start that by growing outward and maximizing supply chain and branding and location strategy while minimizing support costs. 

1851: What are your biggest goals and plans for 2021?

Siebert: Our goal is always to work with the best-possible franchisors and to help them be successful in the process of growth. That’s the same goal we have every year.