Multi-Unit Franchisee Magazine Issue II, 2017 | Page 52

ADDING NEW BRANDS
doesn’t stop with the franchisor. A franchi-
sor’s strength (or weakness) can be found
in the happiness and financial health of its
franchisees. Speaking with as many fran-
chisees as you can is a critical, yet much
neglected step in the evaluation process.
Meeting franchisees face-to-face provides
invaluable insights into the day-to-day
life of a brand.
“They are in the same boat you are,
they see the same things, and 90 percent
of you are having the same experience,”
says Solomon. Existing franchisees can
share the pros and cons of the business,
including how long it took to reach prof-
itability, if costs are in line with expecta-
tions, training, marketing, support, and
how a franchisor resolves conflicts with
its franchisees.
“The first thing I do is go through
the franchisee list. My favorite people
to call—if you can get hold of them—
are the people who left the system,” says
Solomon. “You have to take what they
say based on perspective, but they will
tell you the good, the bad, and the ugly.
You have to read between the lines and
talk to enough people so you feel like
you have a good feeling for the system.”
Culture counts
Doing your homework before signing on
also includes ensuring that the brand’s val-
ues and culture are a good fit with your
own. This includes the corporate office
and its relationship with franchisees, as
well as the company’s social and charitable
activities. In the end, says Owens, who sits
Todd and Audra
Fetter
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MULTI-UNIT FRANCHISEE I SS UE II , 2 01 7
on Wine & Design’s franchise advisory
council, finding the right fit means more
than financial success.
“Make sure a franchise brand fits into
your lifestyle and your beliefs,” she says.
“Also, that it fits into the community or
market you want to bring it into. If you
bring something into a market where it is
needed, but it doesn’t align with how you
feel and you are not 100 percent engaged,
you aren’t going to get the full benefit of
owning a business.”
What if it breaks?
Existing franchisees also can help you
better understand many of the critical
details involved in running the business.
Common questions to ask include: Are
you making money? What is your view
on leasing versus owning? How hard or
easy is it to attract good employees in
your market? Can you share a bad sce-
nario and tell me how you and corporate
resolved the issue?
“Everything is great when it is good,”
says Fetter. “The bottled beer cooler
doesn’t break Monday through Friday—it
always breaks on the weekend. In those
situations, who do you call?”
These days, Fetter, whose business
is a family affair, is happy to say good
things about the brand to any prospect.
He’s learned a lot since opening his first
Buffalo Wings & Rings in March 2013,
when he was optimistic but realistically
cautious as he embarked on his brand
new venture.
“I was still unsure. What if we had the
one store in the history of the earth that
we open and no one comes? You have a
big loan and a lot on the line and I had
never been in the restaurant business,”
he says. “I learned it was pretty much
like any other business in that you have
to watch your labor and costs.”
His conservative approach gave the
first-time franchisee a chance to test the
waters of his franchisor’s ongoing sup-
port before adding another unit—a key
element potential investors should inves-
tigate, he says. “Do they really support
you, or is that just a sales pitch? If they
hadn’t been there for me and supported
me when I had questions, sending people
in and helping me along the way, I never
would have done a second one, much less
seven or 10.”
What if things go south?
There will be times when a deal doesn’t
work out as expected, despite all the best
intentions and due diligence both sides
invested. Whether it’s internal factors,
external ones, or both, it’s wise to have a
Plan B. Before he invests, says Werner, he
makes certain he has an exit strategy. “If I
get in, how am I going to get out?”
Werner also has developed a strategy
to increase his odds of success: he has
transitioned from the traditional multi-
unit franchisee model to an 80/20 con-
cept, in which he provides 20 percent
ownership and a guaranteed salary to a
managing owner.
“I try to recruit high-caliber talent
or someone who has been with me for
years,” he says. “The brand runs better
because I can’t focus on everything by
myself—and I don’t have to worry about
it because I know someone else is worry-
ing about it for me.”
Solomon looks for commonalities
among brands to build operational ef-
ficiencies with expansion. Yet, no matter
which brands they choose, buyers must
approach any investment with open eyes
and realistic expectations about the fran-
chisee-franchisor relationship.
“There are a lot of misconceptions
about what a franchisor does and doesn’t
do,” he says. “A franchisor is kind of like
a consultant—kind of there and kind of
not. You have to understand what your
franchisor is willing to do for you. Your
franchisor can’t balance your books for
you, and they can’t tell you whether to
hire or fire. The franchisor is someone
who gives you guidelines, but they can’t
run your business for you.”