FranDev Players: Rick Bisio, Owner of AFranchiseCoach.com

Rick Bisio “fell firmly on [his] face” during his first brush with entrepreneurship, but decades later he’s grateful for the experience that set him up to become the owner of AFranchiseCoach.com and an accomplished author.

Bisio worked for giant corporations like Monsanto and traveled the world helping Popeyes and other massive brands grow into more than 30 international markets, but didn’t find his ideal career until he went into franchise coaching.

Now, Bisio has literally written the book on franchising and helps aspiring entrepreneurs make their way every day. 

1851 caught up with the author to learn the secrets to franchise development. 

1851 Franchise: Tell us about your business.

Rick Bisio: My business is called A Franchise Coach, but I also go by the name The Educated Franchisee. I spend my time working one-on-one with individuals and teaching them how to evaluate franchises so they can make educated decisions. In 2008 my first book, “The Educated Franchisee,” was published, now it’s in its third edition. I also published “The Franchisee Playbook,” first in 2011, now in its second edition. Everything I’ve done with my business is all about helping people learn what I know in regard to how franchise systems work.

1851: How did you get into franchising?

Bisio: I went to Washington University and got my undergrad degree in business. My dad was an entrepreneur. After school, I worked for Monsanto for a couple years. I quit Monsanto because I didn't like corporate America. I started a business at 25 — not a franchise, but it was my first full-time attempt. I fell pretty firmly on my face. At the time I considered it to be a tremendous failure. I was importing Italian plumbing products and it was a tough deal. I felt bad, but it helped me know what was important in life and keep my eye on the ball. In hindsight it was an important part of my growing up.

Then I went into a masters program at Thunderbird in Arizona, where I got my masters in international business. That’s how I got into franchising. AFC Enterprises hired me as their director of international development. I placed Popeyes Chicken, Church's Chicken, Seattle's Best Coffee and Cinnabon into over 30 countries. My job literally was to fly around the world helping build franchise relationships in order to expand those brands. I was really blessed because I spent my time around really seasoned individuals. They were generous with their time. They taught me about operations, compliance, the contractual side and the development strategic side. 

I learned that not all franchises are good. There are some good ones out there, but some aren’t good. In 2002 I quit corporate America again and started the business I’m running today. 

1851: Are there any keys to consistent franchise growth?

Bisio: That is a very interesting question. The answer I'm going to give you might not be what you expect.

I honestly think the key is operations. It’s not sales. Sales is important, but if you don’t have a good, solid operation, it’s hard. It’s hard to keep selling franchises if the franchises are not successful. It can be done, there are teams that continue to sell with failing franchises because they have phenomenal sales people. 

You have to know what it takes to be highly successful in your business model and to define that set of characteristics that give you the highest potential for success. Once you define that, tell the franchise sales people it’s OK to say no to people who have a low chance of success.

It’s not about sales, it’s about finding long term partners. The long-term goal of a franchise system is to become royalty self sufficient, where royalties cover operating expenses. But if you have unsuccessful franchises, it’s hard to do. 

It’s attracting the right individuals, training them properly, and making sure they’re successful.

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

Bisio: There are two real challenges. The first one is the sheer number of franchise systems out there today. There is no complete list. Nobody has ever counted them. It’s our assumption that there are around 3,000 brands that are actively franchising. There’s probably 300 new franchises a year, probably about one a day. I think one of the biggest hurdles is, how do you stand out from the crowd so you can attract great franchisees? There’s tremendous competition to attract the right franchisees. 

The majority of franchises never overcome that huddle. They become a franchise and then a few years later they stop because they only brought in four people. 

But once you attract them, how do you make these people successful? If your franchisees aren’t successful, then it’s very hard. If they are successful, then growth will occur. How do you make them successful? We’re in a really competitive environment. Any industry that has a proven demand curve also has a proven supply curve. Whenever you open up a franchise system you have to come up with a mouse trap to consistently compete in a competitive marketplace. Have that system you can replicate, bring the right people in and train them right so they can produce their own success. 

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

Bisio: That’s different than a lot of people think. Let’s start with the question, did it affect franchise growth opportunities? Yes and no. I’d say COVID-19 did not necessarily reduce the demand for franchises. People are saying the sky is falling, but the reality is the demand for franchises is the same now as before, and it might actually be higher with more investors than before COVID-19.

The reason is job dislocation. People lost their jobs, and when you end up with dislocation, you get people looking for solutions. In some cases, COVID-19 increased the demand for franchises.

The alternative question is, what did COVID affect? It really did affect the type of concepts people have been looking for. The storefront-type franchises have slowed down. We all know that restaurants, health, fitness and beauty, all these concepts have a problem because they’re forced to close down. So that demand has gone down — not as many people looking to open those as in 2019. They’re coming to me and saying, “I really want to become a business owner because I’m working from home for nine months now and I love not having my boss watching me.”

But they’re also saying, “is there anything out there with less risk? Maybe a smaller investment? Is there anything out there that I don't have to sign a big lease? Anything that will have demand regardless of the economy?”

The non-storefront businesses have really increased, but there are so many service based businesses out there. If you talk to a lot of franchisors that are not in the storefront sector, services like disaster restoration or window framing, the majority of the high quality franchises will tell you this is a very good year. 

Every week I talk to people, I put in business last year or five years ago, and the people in service based businesses are saying it was a very good year. Business for them slowed down in April, but latent demand caught up with them. 

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

Bisio: There are so many that it’s kind of hard to list them. I think that you can say one mistake they try to make is growing too fast and the other is growing too slow. It’s like the three bears: one bed is too soft, one’s too hard.

There are brands that have sold hundreds of franchises this year, literally. They started with four and sold 250. When you grow really fast it’s incredibly difficult to keep up with the support curve. They need to go through training and marketing support. How do you prop up your support group? How do you make sure your franchisees have the best level of support? Growing really fast is really hard. It’s not uncommon for a high-growth franchise to crash at some point or go into a period of reassessing themselves because they grew too fast. 

The other one is growing too slow. People saying they’ll just sell two franchises and make sure they’re really good. When you grow too slow, the royalty stream is not large enough to cover support expenses. Going slow doesn’t necessarily increase the chance of success for franchisees. 

Plus, if you’re growing too slow and you have a really good mouse trap, somebody else is going to copy it and then grow it really fast. 

You have to grow aggressively, but not beyond your ability to support. 

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

Bisio: On a personal level, it’s the same as every year. I plan to be a great teacher, to be a great educator, to always reserve the right to be honest with people. In other words, if they’re not right, they shouldn’t be a business owner. I reserve the right to say don’t do it and to always keep people’s best interests in mind. My goal is to create highly prepared business owners who know what they're getting into before they sign. I want them to be 100% prepared to end up in the top 25% of franchisees in that system.