Franchising and Licensing

I was an Area Manager for a Popalock franchise.

The distinct difference between licensing your business and franchising it is control.

If you are the Franchisor you actually setup a business model that is replicated from city to city and country to country. Every area of the business performs under a predetermined set of systems.

These systems are literally set in stone so that no matter what area of the country I'm in and I need the services of Popalock I the consumer should receive the same service and procedures performed.

Right down to the signage on the vehicle, the logoed uniforms, the type of tools used, the verbiage used when talking with customers and the way the service is rendered.

All of the systems are typically laid out through a daily operations manual, which does get updated twice a year. And yes the franchisor does send people into the field to see if their latest policies or procedures are being followed and used by franchise owners.

If the franchise owner does not operate their business per the franchise model they can have their business taken away.

That's what happened with the franchise I ran. When I was hired the franchise had been recently taken from a franchisee who repeatedly violated their contractual agreements and the business was failing miserably.

Another franchise owner bought this territory but 6 months after the purchase the old staff simply wouldn't come on board and comply with franchise requirements.

That's when I came along. By this time in my career I had already owned and operated 3 successful locksmith and door servicing companies of my own and built several businesses for others in different industries.

This franchise owner had his Chief Operating Officer do a deep and extensive background check on me to verify I had built other businesses and through his search also learned I was a vendor for the Department of Defense with a pretty high security clearance back then.

So I was hired as a locksmith and in less than 3 months became the Area Manager and Locksmith Director for 8 Popalock franchises in 3 states: Florida, Georgia & Alabama.

The first thing I did was bring in new people. The old staff needed retraining so I worked with them for 6 additional months. By the end of their retraining and the monthly personnel evaluations I performed, the old staff still would not comply with the franchise business systems. That's when I had to terminate their employment.

I was also given a 2 year window to turn one location around and make it profitable, but I managed to do it within a year. Under my management and working hand in hand with my new technicians we were able to increase both gross and net profits by 140% year after year.

I also had to do a lot of damage control from all the bad customer relations the previous franchisee and their managers did to customers. I made it a matter of personal responsibility to regain the trust these others threw away. It took time and a lot of going into businesses and apologizing for past management behavior.

We regained many accounts and even though many customers said they would never use our services again, I was able to convince them to give us one last chance and made sure they had my personal cell phone number.

Once I had the staff working in compliance with the franchise systems I fired up the franchise's "Thank You" system with a challenge.

One of the systems that is part of the franchise daily operations is rendering such good service that when asked the customer would be so compelled to call our national call center and provide honest feedback.

Our franchise location never had good feedback. That's when I pulled the staff together and said we have a goal and I found out no one thinks we can start getting good feedback.

That's all it took. Everyone got fired up and poured on the charm and then all of a sudden feedback started coming in. First it was a couple of good comments. Then it turned into a dozen, then 2 dozen and then we hit 100 and just kept growing. When my challenge came to an end we had somewhere in the neighborhood of about 700 positive comments and a ton of feedback.

What's important here is that every franchise in every territory gets emails each time a positive comment is posted in the system. I had managers and franchise owners from around the country emailing how I did it. My answer was always the same. "We decided to give better service and it paid off".

My staff liked customers thanking them so much that they found themselves going out of their way to over deliver on service. This triggered customers digging into their purses and wallets to give out tips. Which that region of Florida people don't typically tip a service provider.

I was given 2 awards for this and a monetary bonus. As for my monetary bonus, the technicians never new I would be rewarded like this, so when I had the monthly meeting with all of them at the restaurant each was given an equal split of the bonus.

Then there is the twice a year trek to Orlando, Fl to meet with other franchisees, their managers and the franchisor. These were annual events and typically they lasted a week with additional management training, business profit and loss meetings and new technology coming into the whole franchise system.

Now I said all that to show you just how in depth a franchise runs. It's so deeply thought out and covers every base that when a perspective buyer wants to buy into a franchise they are buying into a complete business life.

Licensing I don't think gets this in depth.

On the flip side of Franchising is the barrier of entry
to competitors due to legal and money investment.

One of Warren Buffets company buying criteria is having
a high hurdle to keep out competitors.

In the field of business coaching Action Coach has many more
franchisees than those that went the licensing path.

Founder was playing golf when one was sold for a million bucks.

Best,
Ewen