What Type of Support Should Franchises Offer Franchisees?

When a franchisor promises a prospective franchisee that they will have the full support of the brand’s corporate team, what exactly does that mean?

Is the support emotional, financial, a once-a-year seminar? The answers to this question are critical questions to a new franchise owner’s success. 

Peter Ricciardi, who has worked as a consultant for both franchisees and franchisors, has worked with a number of restaurant groups and, at the age of 25, became the youngest Burger King franchisee in history and grew from one to six locations. From both his own experience as a franchisee and his current career as a go-to-market strategist and content and ecommerce specialist, Ricciardi knows the ins and outs of franchising and stands firm that franchisee support happens even before that franchisee signs the agreement. 

“Franchisee success is going to depend in large part on the franchisor’s support,” Ricciardi said. “You're not there to be an independent business guy. You're there because you want established systems. The franchisor is going to provide you with access to the product, they're going to provide you with the marketing support, the ideas and the oversight to make sure that you're going to succeed.”

Ricciardi says Burger King’s support started at the interview process, when the franchisor wanted to make sure that the agreement was in the best interest of both parties by conducting a stringent interview process. 

“You did not get accepted as a franchisee until you actually went through a week of hands-on training in the restaurant,” he said. “Essentially, it is volunteering for a week in a Burger King. Then they evaluate you, and you evaluate them, which is brilliant. Because some realized it was way too much hands-on work or maybe they didn’t like being around food. Some people found that it was too restrictive to be part of a franchise.”

That’s why Ricciardi says “the most critical support happens before you buy the franchise.”

Pre-Signing Franchisee Support

The franchisor needs to do the due diligence to give the potential franchisee the opportunity to get to know the brand and see if it’s even a fit. 

Ricciardi also advises potential franchisees to be wary of brands looking to just sell one more location, and pointed to once-prominant brands like Quiznos and Cold Stone Creamery, which “don’t don't have half of the units that they had” as an example. However, Burger Kings and McDonald's have always lit up the U.S. map location wise and tend to stay that way because “well-run franchises rarely go away,” said Ricciardi. “If they do, it's usually because something catastrophic happened, like there was a major change on a road or the mill in the town closed down. They don't go away because they've done a very good job of evaluating locations, and they've done a very good job matching a franchisee to the franchise.”

This level of success — opening and sustaining locations for decades — doesn’t happen by selling locations just because they are for sale. Selling a location to anyone with the means to buy it is a “lack of initial support,” stated Ricciardi. “Winning franchisors want to bring on winning franchisees, and this happens through a process.”

Part of his Ricciardo’s work entails advising people on whether or not they should even pursue a franchise opportunity in the first place. When he is working with potential franchisees, he “forces them to first make sure that they understand what they're buying and the support they're going to get — that they're the right match,” said Ricciardi. “And then the second thing I make sure of is if they're buying an existing franchise. I want to know why a local franchisee is not expanding into that area. That's usually a telltale sign.”

For example, If there are three franchise locations in an area and the brand wants to open a fourth, a potential franchisee will want to know why a local franchisee already in that town isn’t taking the opportunity. 

Considering First-Unit Franchise Locations

Ricciardi notes that location-based franchises typically do best if nestled near a region of success, as that also plays into the support a potential franchisee is teed up for receiving. 

For instance, franchisees should observe if a brand is expanding to completely new regions far away from its initial area of success. This would limit the amount of franchisee support a potential investor might receive. A fast-food chain restaurant set to open its first location in Savannah, GA  that had previously been regionally based out West is bound to have some hiccups. A potential franchisee should observe if new locations were company owned before the brand expanded, and how many. This demonstrates a careful approach to expanding and a corporate team that cares about who is growing the brand with them. 

“Some franchises will not go beyond a certain footprint because they believe that they lose control,” explained Ricciardi. “In fact, some of the best franchises in the country are regional and not national.” 

Another indicator of strong corporate support comes in the form of encouraging potential investors to talk to current franchisees. This will instill a sense of trust that the corporate team wants its franchisees to know each other, build each other up and share tips on how to run successful operations. 

“A franchisor who feels good about what they're doing is not at all worried about a potential franchisee calling other franchisees to ask questions.”

Ricciardi stressed that while the most important element of franchisee support is the support that comes before buying, the close second is the support while preparing to launch. 

“There's nothing more critical than launching at the right time and doing it successfully because you never get a second chance to make a first impression. So the best franchises have a ridiculous amount of support in your first month, meaning they either have people on-site or on speed dial.”

If the location is a new territory for the brand, it is critical that the franchisee receive in-person support to train the new owner and get a feel of the new market. “It's one thing being trained in an existing location where the brand is already thriving, but it’s another thing being trained in your market and catering to new customers.” The corporate team has to be willing to put that investment and time into a potential franchisee, and a franchisee needs to know to look for these things in order to have a successful operation.