Mike Drumm of Drumm Law in Denver, Colorado tells us why your company’s FDD might suck. He points out issues in an FDD’s content and style that could make or break an FDD’s ability to help you sell your concept to prospective franchisees. Mike gave away most of the company secrets during this interview!
00:00:40 – Podner Introduction
00:02:24 – Segment 1: Get to know Mike Drumm
00:26:34 – Segment 2: Why Your FDD Sucks
00:55:06 – Segment 3: Quick Draw
Mike Drumm Show Notes
Why your FDD might suck:
It’s not written in plain English
You have “over disclosed”
You let your attorney or accountant write the first sentence that describes the concept
You didn’t brand the document
The FDD is not visually attractive and easy to read (pictures, charts, etc)
Item 19 doesn’t tell your story well
It doesn’t use a data sheet
Too many exhibits
Item 7 doesn’t include an average
It includes outdated technology references
During my visit with Mike, we go off topic and discuss some really important topics that every franchisor needs to know.
How to make the delivery of an FDD a memorable experience.
Cordell Riley of Tortal Training talks about Franchisee Training – the positive effects that a well-established training program can have on a franchise system. In this episode we talk about how any franchisor can design and create a franchisee training program that will maximize results to both the franchisees and the entire franchise system.
00:00:52 – Podner Introduction
00:02:38 – Segment 1: Get to know Cordell Riley
00:20:34 – Segment 2: Topic Segment
00:54:04 – Segment 3: Quick Draw
Cordell Riley Show Notes
People learn at different rates based on the modality of the training being delivered.
VAK: Visual – Auditory – Kinesthetic
What does the start-up franchisor need to think about before developing a training system for the franchisees?
Start with a solid foundation (ops manual)
Make sure that training is part of your franchise culture – written into the mission and vision statement
Measure the amount of training that is being delivered
Ensure that training is aligned with business goals
Strive for a blended solution – digital, audiovisual, classroom format
A solid training program will lead to franchisees feeling supported which leads to higher validation scores.
Great training versus good training
What do you want people to do differently after completing training?
Make training fun
Initial Franchisee Training DOs and DON’Ts
Don’t try to cover everything in initial training. Only cover the topics that they need to get up and running. Too much at once will lead to lower retention rates.
Do include those topics that have a high impact and short time to master.
Do use real world training (hands on)
Do utilize “Course of Action” – assignment for franchisee trainees where they have to present how they will use the training that they received. (FREE template available by e-mailing Cordell Riley )
Do use internal Subject Matter Experts – have multiple trainers
Conduct the initial training as close to opening as possible
Avoid an “All lecture” training program
Engage the trainees
Vendors can be useful trainers on certain topics – don’t let it become an infomercial.
Use quizzes throughout to ensure that franchisees are following what is being taught.
E-learning – online
Field support staff
Conferences and conventions
Include those topics that have a lower impact and longer time to master.
Training is not something that happens during the first few weeks of the franchise relationship. Training is a process that should last for the life of the relationship.
E-learning is a delivery method that you will use to keep a constant flow of training to the franchisees
Use prior to initial training to bring new franchisees up to speed before initial training
Use as part of your ongoing training program to promote new products or services, etc.
Short, logical chunks of training – don’t pump all of your training into one session. 10 minutes or less
Rebecca Monet of Zoracle talks about how to utilize Psychographic Analysis, or personality profiling, to assist in franchisee selection and help franchisors select franchisees who will more likely fit into the corporate culture and who are more likely to be the best performers in the system.
Time Stamps 00:02:33 – Segment 1 – Get to know Rebecca
00:21:06 – Segment 2 – Psychographic Analysis for Franchisors
00:50:30 – Segment 3 – Quick Draw Questions
Segment 1 – Get to know Rebecca Recorded on at the Franchise Expo West, Denver Colorado
Born in Au Switzerland
She is NOT related to Claude Monet
Grew up speaking High German (Swiss German) in the house. Lived on a dairy farm as a child. Parents were Baptist missionaries.
Moved to the United States when she was 14 years old.
Moved to California in 1984 as a single mother to seek her fortune.
Founded her first business in 1994, Noodle Metrics
Co-founded her second business called Proven Match in 2009
Founded Zoracle Profiles in 2013
Segment 2 – Psychometric Assessments for Franchisors How franchisors can use psychometric assessments to improve franchisee performance.
To a franchisor, granting a franchise is very much like getting married, with very little courting in order to “get to know” their partner.
Personality style questions are not used at Zoracle because there is less than a 3% correlation between personality and performance.
The science of the process is not in the questions themselves, rather how the participant orders certain words into a hierarchy of preference that is weighted on the back end. This gives clues about motivation, drive, and the decision making process of the participant.
The psychographic analysis is not fool-proof but there are mechanisms in place to report out inconsistencies in the answers of the participant.
Startup franchisors with no existing franchisees can still benefit from a psychographic analysis tool.
A psychographic analysis tool will help a franchisor in the following ways:
Better quality franchisee and faster ramp-up
Greater franchisee satisfaction, better validation and less litigation
Reduced cost to support
Reduced cost to recruit, support and train franchisees
Stronger franchisee compliance and retention
Increased franchisee performance and profitability
Segment 3 – Quick Draw Rebecca’s favorite book – The Autobiography of Benjamin Franklin
PC and iPhone
Doesn’t watch TV – doesn’t own a TV
Working on her master list of movies that her friends helped her create in order to learn more about Americana culture.
IFA – Dentate YES!
Hobbies: golf, painting, cooking
Dog person: Bernese Mountain Dog
She used to be a car collector – 1967 Cougar
In a time machine, she would go to 1955 when cars were sexy
She has wanted to be a psychologist her entire life
Jim Richardson, a franchising veteran from Pizza Hut (20 years) and Panda Express (15 years) discusses some foundational franchising theory in a “Franchising 101” segment. Afterwards Jim expands on fundamental best practices for franchisors as they develop their franchise system.
Timestamp: 0:00:41 – Jim Richardson Introduction
0:03:15 – Segment 1 – Get to know Jim Richardson
0:16:58 – Bonus Segment: Franchising 101
0:40:00 – Segment 2 – Franchising is a Partnership (Business/Branding)
1:05:44 – Segment 3 – Quick Draw Questions
Segment 1 – Get to know Jim Richardson
Recorded on location at Jim Richardson’s house in Parker, Texas – just a few miles away from the famous Southfork Ranch (Who shot JR?)
Born in Rockwell, Iowa
Jim’s first real job was as a grocery man
Studied chemistry and finance.
Small town boy makes it big – Ford Motor Company, Pizza Hut, and Panda Express
Bonus Segment – Franchising 101
Franchising allows you to expand your concept by utilizing the resources of others.
The franchisee pays his part of the investment capital that is necessary to expand in exchange for the majority of the revenue.
In many cases, people is a more constraining resource than money
The franchisee will source the people that will make them and your brand successful
A franchisee can duplicate you, working on his/her side of the expansion investment as you continue to grow your business form the franchisor side.
In this conversation, the term connections refers to real estate connections. A franchisee will have a closer tie to the local market in order to maximize potential from the real estate selection. This is particularly important with international franchising.
When is a good time in the lifecycle of a business to start franchising? How do I know it’s time?
When you attempt to franchise before you have all of your systems in place then you are asking a prospective franchisee to take bet on you when you have taken only a limited bet on yourself.
Don’t franchise until you have the answer to all of the questions:
What has made me successful? Why is my concept successful?
When you know what it is that made you successful, then you know what you need to impart to others to make them successful.
Why do customers like you?
Why do customers come back?
Can I duplicate a customer experience?
Do I have what it takes to be a franchisor?
What is your leadership style?
Command and control versus collaborative
You will be entering multiple long-term relationships. Are you ready to do your part in the relationship? Can you work well with others?
Personality profile tests can help you determine your leadership style as well as evaluate how a new franchisee will fit into the system.
Biggest myth in franchising: I don’t franchise because I want to have total control of the business. Franchisees have more incentive to follow a system standard than an employee
If you are a command and control style of manager, you can still franchise but you won’t like it as much, and neither will your franchisees.
Command and control franchisors will also miss out on many innovations that come from franchisees (e.g. paper cups at Starbucks, pan pizza, and the Big Mac)
Most franchisee relationships last longer than the average marriage.
To be successful in franchising a concept, you have to have both a business that is ready for franchising and a leadership team that is ready for franchising.
What is your growth strategy?
Fail to plan, plan to fail.
Be able to pay equal attention to both company-owned and franchise locations.
Can you remove yourself from your business for 1-2 years and still have it operate efficiently? Do you have the infrastructure to franchise?
Segment 2 – Topic Segment
Franchising as a Partnership
Franchising is an extreme relationship and your franchisees will need your attention
Franchising is a bilateral relationship where each party should be able to learn from each other.
How to find the best franchisees: When you build a solid reputation, the people that you want will come to you.
Just because a prospective franchisee has something that you want (access to prime real estate or lots of money) doesn’t necessarily mean that they will be a good franchisee.
Look deeper into a prospective franchisee before you decide to accept of decline them. It is not just about access to money. It is about character and integrity. You want franchisees with the following characteristics:
Have something to teach you
Open to learn from you
The relationship between franchisor and franchisee must be complimentary. If they knew and had everything that you know and have then why would they need you? If you knew and had everything that they know and have, why would you need them?
If all you are looking for in franchisees are carbon copies, then don’t franchise. You probably already have that in your corporate staff.
After you have brought in franchisees that are unlike you, then don’t forget that they are unlike you.
Examples of how franchisees with complementary management styles can benefit the organization:
Price: Ted Swan in Lansing, Michigan – Introduced the coupon pricing model with pizza when nobody else was doing it. Ted had knowledge that corporate didn’t have.
Place: Dick Freeland in Ft Wayne, Indiana – Discovered a method of expansion that had his future customers paying for his expansion costs.
Promotion: P-zone by pizza hut – The campaign failed because the word P-zone was dangerously close to the Spanish word for nipple. The franchisees in Latin markets knew this – corporate didn’t.
Product: Many product innovations have come from franchisees versus corporate.
Purpose: The purpose of a franchisees business may or may not be complimentary to yours. This refers to the questions, “Why did they decide to become a franchisee?”
Accept the differences. Just because differences exist between franchisor and franchisee, this doesn’t make you unequal.
Demand that your relationship with franchisees be one of equality.
Franchising is where servant leadership thrives.
Success in franchising takes more preparation than success in your own business.
Inspect your success. What is it that made you successful?
Spend time reflecting instead of projecting forward.
Determine how you are going to transfer your knowledge to franchisees.
Franchising is all about knowledge management.
Know what you know. “If HP only knew what HP knows.”
Put metrics in place that measure the activities that lead to your success.
Know your benchmarks so that you can document them into a “playbook” that the franchisees can use to replicate your success.
Segment 3: Quick Draw
Jim’s favorite book – The Hobbit
Jim would love to travel back in time to see Leif Ericson – he is fascinated with archeology
Whataburger versus In & Out – WHATABURGER WINS!!!!!! Take that Mike!
Favorite movies: The Matrix and The Jason Bourne series.
iPhone all the way – Yahoo Sports is his most used app
If Jim had $1 billion, he would give it to his wife. Go figure.
Franchise consultant Yendy Khayat speaks on the topic of how to expand a franchise system into the Middle East region. It is a complicated topic that would probably require 10 episodes in order to cover thoroughly. In this episode we attack the topic from 65,000 feet.
Segment 1: Get to know Yendy In segment one of this episode we spend a little time getting to know the person Yendy Khayat. We learn a little about what it was like growing up in Beirut, Lebanon, her multinational educational path leading to an MBA with an educational emphasis in hospitality, and how she has successfully leveraged her impressive education and work experience into a successful franchise consulting career. By the way, she is fluent in three languages.
Segment 2: Expanding a franchise into the Middle East In segment 2 Yendy and I try to logically attack the very complex topic of expanding a franchise system into the Middle East region. There are a lot of moving parts to this endeavor that would certainly be considered a “black diamond” run in franchising. However, we learn that with the proper prior planning and a good helping hand is can be a very fruitful expansion project for certain franchise concepts. The topics of discussion are:
Why the Middle East region is worth considering
Large market and growing
Young and upwardly mobile consumer market
How to move forward with expansion in the region
Expansion models with local partners
Intellectual property protection
Multinational law firm
The importance of proper infrastructure
Modification of training and support programs
Challenges that can hinder or halt expansion progress
Some concept categories experience the more success than others
Brand offering modification
Halal certified food
Reacting to leads versus logical business decision
Time zone allowances
Expansion into the Middle East region is “advanced franchising” and not for the beginner
Segment 3: – Quick Draw Questions
Segment 3 is a fun way to wind down the episode with quick, fun questions such as favorite movie, favorite book, etc. We find out what Yendy would do if she had enough money to never have to work again.
This is a FANTASTIC episode and a MUST LISTEN if you have ever considered expanding your franchise system into the Middle East region. We don’t provide all of the answers but we cover enough to get you on your way if Middle East expansion is part of your plans to grow your system.
Yendy Khayat The Franchizery
Al Wahda City Tower,
Hazza Bin Zayed the 1st Street,
P.O. Box 96115, Abu Dhabi,
United Arab Emirates
+971 2 8186736, +971 2 8186737 firstname.lastname@example.org
In this episode of The Franchise Manual Podcast we speak with Canadian attorney Joseph Adler and Alex Spiro on the topic of how to expand a franchise system into Canada while avoiding the common pitfalls that hinder many franchisors.
Segment 1: Get to know Joseph Adler In segment one of this episode we spend a little time getting to know the person Joseph Adler. We learn a little about his childhood growing up on Hamilton, Ontario, his first job, and his pathway to law school.
Segment 2: Expanding a franchise into Canada In segment 2 Joseph Adler outlines some of the common pitfalls that many non-Canadian franchisors experience when they attempt to expand their franchise system into Canada. The topics of discussion are:
Maximize the U.S. market first – maintain domestic focus
Ensure that your IP is protected
Be proactive rather than reactive
Ensure necessary supply chain – Import issues
Market analysis – Canadian taste preferences
“Canadianize” the FDD and Ops Manual
The importance of engaging a Canadian franchise attorney
Understanding the competition
Finding the right franchisee
Segment 3:- Quick Draw Questions Segment 3 is a fun way to wind down the episode with quick, fun questions such as favorite movie, favorite book, etc. We find out what Joseph would do if he had $1 billion to make the world a better place. We also find out if this Toronto attorney is a closet spaghetti western fan.
This is a FANTASTIC episode and a MUST LISTEN if you have ever considered expanding your franchise system into Canada, or if you just want to get to know Joseph Adler a little more than you already do.
Canadian franchise attorney Joseph Adler talks about the similarities and differences between the Canadian and American franchise landscape.
0:00:50 – Joseph Adler Introduction
0:03:50 – Segment 1 – Get to know Joseph Adler
0:33:25 – Segment 2 – How to expand a franchise system into Canada
1:11:07 – Segment 3 – Quick Draw Questions
Doc Cohen was an absolutely fantastic guest on The Franchise Manual Podcast. If you miss this podcast you will be missing one of the best ones yet.
If you already know Mr. Cohen then I’ll bet that you will still learn something about him that you didn’t know in the “Get to know Doc Cohen” segment. If you didn’t already know Doc Cohen then you will definitely learn a lot about one of the finest men in the world of franchising. Find out why they call him “Doc”. Find out what Mr. Cohen has in common with Ray Kroc and Dave Thomas.
In “The Fun Questions” segment you will learn what Mr. Cohen’s favorite movies and TV shows are. You will be surprised when you find out. I surely was. (Did he say that he wants to be a zombie?)
Most importantly, in the topic segment, “Being the Best Franchisor from the Perspective of the Best Franchisee”, find out what advice Mr. Cohen gives to all franchisors in order to help their franchisees flourish and reach their success potential.
Special thanks to Jerry Darnell for introducing me to Mr. Doc Cohen.
Doc Cohen is a multi-unit and multi-concept franchisee, and he talks about how to be the best franchisor from the perspective of the best franchisee. Doc Cohen is the only franchisee ever to be inducted into the IFA’s hall of fame.
Anthony Owen, president of Manalto Inc. talks with me about how franchisors, both big and small, can better manage the daunting task of social media. Obviously the topic of social media is much too vast to cover thoroughly in such a short period of time but you will find some really good takeaways in this episode.
Anthony Owens discusses how franchisors should and shouldn’t use social media in their franchise system.
00:00:48 – Anthony Owen Introduction
00:02:19 – Segment 1 – Getting to Know Anthony
00:20:43 – Segment 2 – Social Media for Franchisors
00:51:00 – Segment 3 – Quick Draw Questions
Nick Gugliuzza of Empire Business Brokers shares with us his knowledge and experience as he teaches franchisors what to look for in a franchise brokers, what to expect from a broker, and how a franchise broker can help any franchisor efficiently achieve their growth goals.
Did you know that Niagara Falls dried up once, and Nick was there to witness it? Did you know that Nick was drafted by a major league baseball team? Did you know that Nick was almost alligator food once? All of that is in this episode as well.
Podcast Segment Timestamps:
03:13 Segment 1 – Get to know Nick
28:20 Segment 2 – How to select a franchise broker
This episode of The Franchise Manual includes an interview of the host, Kit Vinson, by Henry Lopez of Levante Business Group. In the interview several topics are covered such as how Kit co-founded FranMan Inc. with his brother, what Kit believes to be the keys to his success, and much more.
The host of The Franchise Manual Podcast, Kit Vinson, is interviewed in this episode.