Why Franchising Needs To Be "Profile-Based"


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This Franchise Navigator presentation demonstrates why a growth strategy needs to be a targeted "profile" based strategy and not a hit or miss blunder.

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Why Franchising Needs To Be "Profile-Based"

  1. 1. How do you really know if someone is a good fit for your business and franchise model? 1 Profiling. Strategy. Results. ®
  2. 2. 2Because franchising is all about people doing business with people! Using A “Profile Based” Strategy to Grow Your Franchise System Craig Slavin President/Founder Franchise Navigator Business Navigator, Franchise Central, Franchise Architects and ConnectMe Since 1980 2 Profiling. Strategy. Results. ®
  3. 3. Every franchisor has questions that need to be addressed: 1. What specific skills do you require of your franchisees? 2. Do you know what differentiates your high performing franchisees from the rest? 3. Do you know the best profile for your franchise? 4. Do you know how to reach the right profile? 5. Are you using the right media/medium to reach this profile? 6. Are brokers sending you the right profile? 7. What percentage of your franchisee population are high performers? Mid? Poor? 8. Do you even care? 3 Profiling. Strategy. Results. ®
  4. 4. We are going to address these six questions:1. What does it mean to create an “ideal” franchisee profile?2. Can you use a generic personality profiling tool? Are they effective at predicting success as a business owner vs. an employee?3. Is it beneficial to benchmark existing franchisees?4. How can a profile be used to recruit new franchisees?5. Is a profile beneficial for training, support and relationship purposes? 4 Profiling. Strategy. Results. ®
  5. 5. Assumption 1: Your Business Is Like An Eight Cylinder Engine Franchise Architects Eight Cylinders OPERATIONS IMAGE, IDENTITY and MARKETING BRANDING and ADVERTISING LEGAL IT/INFORMATION TECHNOLOGY SALES and ORGANIZATIONAL /HUMAN CUSTOMER SERVICE RESOURCES FINANCIAL 5 Profiling. Strategy. Results. ®
  6. 6. What does it mean to create an “ideal” franchisee profile? • Franchising is all about people doing business with people. • Not all individuals are alike. Think of the vegetable section of the grocery store. • Their needs are different. • Their skills are different. • Their values are different. • Just because they can afford to buy the airplane does not mean they can pilot it! • The “ideal” profile of a single-unit franchisee is very different than that of a multi-unit franchisee. • Investment criteria is not a profile. 6 Profiling. Strategy. Results. ®
  7. 7. Assumption 2: Your Business Requires Three Distinct Skills 1 2 3 Sales and Marketing Business Product/Technical Customer Service Administration Skills Skills and Management SkillsQuestion: Which skill and core competency is the most important for yourfranchisee to possess for operating your franchise?Answer: A franchisee should not be expected to be proficient at all three.In fact, people who are good at all three do not buy franchises.Every franchisor has to pick which one skill is the most critical! 7 Profiling. Strategy. Results. ®
  8. 8. Can you use a generic personality profiling instrument? Most, if not all, existing “instruments” are designed for the employer/employee relationship and employee screening. Franchisees are not employees. They make decisions and live their lives differently than employees do. Owning a business or a franchise is completely different than working on a job. Interpretations of the results, from these generic, employee-oriented tools, is very subjective for business ownership purposes. What needs to be measured for business ownership is very different than selection of an employee. The instrument needs to be business and franchise ownership specific. 8 Profiling. Strategy. Results. ®
  9. 9. Is it beneficial to benchmark existing franchisees?• Understanding what you did in your past and how that affects your future is critical.• You could have a strong business model but if it is not sold to the right person the performance will not produce the results you are seeking.• Most likely, every franchisor has High, Mid, and poor performers. Do you know what differentiates the High performers from everyone else?• Imperative to find out the “why” now so that you can focus your efforts on making sure you recruit the right candidates.• Having locations open then close decreases shareholder value. 9 Profiling. Strategy. Results. ®
  10. 10. Is it beneficial to benchmark existing franchisees? Benchmarking will show a very clear distinction between your High, Mid, and Poor performers. If you do not benchmark you would not have the “why” and most likely would be making arbitrary changes to support, training, and marketing strategies. Benchmarking will enable decisions in marketing, support, and training based on solid data. Benchmarking will clearly show what differentiates why your High performers do well and why your Mid and Poor performers do not. Benchmarking and statistical analysis should be done by Independent statisticians. 10 Profiling. Strategy. Results. ®
  11. 11. This graph illustrates the average scores of one company’s franchisee population.100% 80%90% 74% 74% 74% 72%80% 72% 72% 70% 68% 62% 63%70% 65%60%50%40%30%20%10% 0% ACCOMPLISHER INFLUENCER ASSOCIATOR CONTRIBUTOR The three bars indicate the Top, Mid and Poor Performing franchisees in the system. Left Bar - Average Scores of Top Performers Center Bar - Average Scores of Mid Performers Right Bar – Average Scores of Poor Performers 11 Profiling. Strategy. Results. ®
  12. 12. Is it beneficial to benchmark existing franchisees? Food Service – Mid Sized Chain Service Business – Mid Sized ChainFor many years Franchisors would claim their distribution system performance was always divided into thirds: 1/3 HIGH, 1/3 MID and 1/3 POOR performers. We have scientifically proven this just is not true. It is a myth. Here are documented results. 12 Profiling. Strategy. Results. ®
  13. 13. How can a profile be used to recruit new franchisees? There is not a “one-sized-fits-all” solution to franchise recruitment. Each company has its own culture and operating model. Each profile needs to be communicated in very different methods. Some are motivated by income. Some are motivated by security, Some are motivated by prestige. Some are motivated by what they can contribute. If you have a franchisee population comprised of differing profiles there is no way your operations, training and field support personnel can be trained fast enough on how to be a Psychologist and communicate effectively with each franchisee. It is impossible! 13 Profiling. Strategy. Results. ®
  14. 14. How can a profile be used to recruit new franchisees?“ Once we knew who our target profile should be, we set out to refocus our franchise sales materials and presentations to communicate directly with this profile.” “By profiling our existing franchisees and then creating a segmentation model that defines High, Mid and Poor Performers, we were able to clearly see who our audience members are and how to better communicate with them.” • If you know your profile you can tailor a step-by-step review of your systems, culture, vision and market niche of your franchise offering. • That includes the right marketing materials, with the right colors, verbiage and messaging. 14 Profiling. Strategy. Results. ®
  15. 15. Is a profile beneficial for training, support and relationship purposes?• Understanding your profile gives you: • A better understanding of your candidates needs and learning style. • The ability to identify the training and support required. • The ability to structure the right level of support to fit the profile of the franchisee based on their Skills, Values and Behavior. • The ability and opportunity to design communications and training programs to better communicate with your franchisees. • The ability to know what works with one profile not with others. • 15 Profiling. Strategy. Results. ®
  16. 16. Why is this important to you?• Utilizing a “profile” based strategy give you: • The ability to target the right profile and not have a “generic’ recruitment strategy. • The ability to be selective so you attract “like-minded” people who can execute your business model. • Selling a franchise is not an asset. There is no value to a franchise agreement. There is, however, value in market share. • The ability to create a sustainable Indirect Channel of Distribution. • The ability to “own” markets and not fragment your own efforts. 16 • Profiling. Strategy. Results. ®
  17. 17. Why is this important to you? Creates Connectivity Financial Skills, Values amongst your Resources and Behavior entire organization and distribution Connectivity system! Market/ Business Location SystemsHow does this affect your franchising success? 17 Profiling. Strategy. Results. ®
  18. 18. Objective: Identify who can execute your business model. “The right Stuff.” 6th Cylinder Franchise NavigatorFranchise Navigator quickly (lessthan 10 minutes) and effectivelyidentifies and quantifies anindividual’s:  Skills 1 2 3  Values Sales and Business Product/ Beliefs of Administration and Marketing Skillsa person or social group in which Technical HR Management Skills they have an emotional investment. These are Skills an individual’s own core set of rules.  Behavior Behavior that is congruent to one’s values 18 Profiling. Strategy. Results. ®
  19. 19. FranchiseNavigator The Four Behavioral Profiles ACCOMPLISHER INFLUENCER ASSOCIATOR CONTRIBUTORLEADERSHIP AND DRIVE SALES/COMMUNICATION PEOPLE ATTRIBUTES LEADERSHIP ATTRIBUTES Everyone has all four profiles. What the Franchise Navigator does is identifies, instantly, which are the dominant and subordinate profiles. Results appear in percentages 19 Profiling. Strategy. Results. ®
  20. 20. FranchiseNavigator ACCOMPLISHER INFLUENCER ASSOCIATOR CONTRIBUTOR• Big Picture • Narrow focus • Broad focus • Caring focus• Can multi task • Cannot multi task • Cannot multi task • Can multi task• Strong business skills • Strong sales skills • Has a need to belong • Has a need to• Strong drive for • Needs instant • Works with family and contribute accomplishment gratification close friends • Wants a steady• Does not need accolades • Needs a lot of • Needs a lot of business accolades attention • Loves to enrich others • Wants routine Single and Multi Unit Single Unit– Single Unit– Single and Multi Unit – Operators Area Territorial Small Staff Larger StaffLEADERSHIP AND DRIVE SALES/COMMUNICATION PEOPLE ATTRIBUTES LEADERSHIP ATTRIBUTES 20 Profiling. Strategy. Results. ®
  21. 21. 1 Step 1: Overview Behavioral Profiles – 3 Measurements 100% 100% 90% 90% These scores are for illustrative purposes only! 80% 80% The results appear within 2 seconds 70% 70% 60% 80% 60% 70% 69% 50% 65% 50% 40% 40% 30% 30% 20% 20% 10% 10% ACCOMPLISHER INFLUENCER ASSOCIATOR CONTRIBUTOR 0 01. Which profile is the DOMINANT 2. Which profiles are the SUBORDINANTS 3. Combinations 21 Profiling. Strategy. Results. ®
  22. 22. 1 Step 1: Overview Result of Benchmarking – Results appear within 2 seconds These scores are for illustrative purposes only! These results appear within 2 seconds upon completion of the survey 100% 100% 90% 90% 80% 80% 70% 70% 60% 60% 50% 50% 40% 40% 30% 30% 20% 20% 10% 10% ACCOMPLISHER INFLUENCER ASSOCIATOR CONTRIBUTOR 0 0 Our statisticians will create a statistically range based on your High Performers.An individual’s results are then compared to the high and low ranges of your High performers. 22 Profiling. Strategy. Results. ®
  23. 23. Importance of Values Franchise Navigator• Values are personal.• Our actions and behavior point to what we really value, instead of what we think we value.• Values can change as experiences change.• Often feelings are more accurate value indicators than thoughts.• When faced with alternatives, our values determine our choices.• Our values give a particular direction and consistency in our behavior.• Our values, attitudes and beliefs condition our perceptions. 23 Profiling. Strategy. Results. ®
  24. 24. COMPETENCY HIGH MID POOR Overview SkillsWe know which skill(s)each profile performs Sales and Marketing Business Administration and best! HR Management Product/Technical Skills ACCOMPLISHER INFLUENCER ASSOCIATOR CONTRIBUTOR 24 Profiling. Strategy. Results. ®
  25. 25. Results Using the Science of Franchise Navigator This chain of stores, which replaced their Catalog Stores, is now Sears Golden child! Over 1000 stores delivering $2B in sales and Low to Mid double digit EBITDA• In 2000, based on performance we sorted the owners as high, mid and poor performers,• Franchise Navigator helped attract candidates that matched the DNA of the top tier owners (Sears immediately started rejecting approximately 33% of the candidates that they would have selected in the past),• According to Sears the results were amazing: - Average store sales went from $1.2 - $1.8M in approximately 18 months - Average ticket improved by $75 in Home Appliances - Service contract ratio sold doubled - Failure rate of stores went from 10% to 6.4% (35% improvement) - This lead to a great deal less legal activity against their P & L – - Saved Sears $3M - $4M each year in legal fees. 25 Profiling. Strategy. Results. ®
  26. 26. Results Using the Science of Franchise Navigator Real gain was in store growth --- (perspective owners called the existing owners to see if they liked the program, made enough money and trusted the company), Sears had much happier owners - and the word of mouth helped propel them to increasing store count by 100 - 125 a year for 5 straight years, We had to do the same thing with their DMs and RMs -- they were not used to managing/coaching such a strong owner base,Sears started putting round pegs in round holes for the first time on a consistentbasis and the results spoke for themselves. We also created their recruitment tools. 26 Profiling. Strategy. Results. ®
  27. 27. Results Using the Science of Franchise Navigator• “Average unit sales (AUV) increased by 38% in the first 18 months of using Franchise Navigator.”• “Our unit level store increases averaged 18% - 22% using Franchise Navigator to select the right franchisees!”• “36 % of all inbound candidates are disqualified because they don’t resemble our High Performer Profile.”• “People coming through training are definitely a higher caliber than previously.”• “Closing rates are much higher than ever before.”• “Franchisee retention has now exceeded 95%.”• “Franchise Navigator stopped the bleeding. New franchisees are now opening more locations and faster than ever before.” 27 Profiling. Strategy. Results. ®
  28. 28. Because franchising is all about people doing business with people Thank you. We trust we have demonstrated why creating the “ideal’ franchisee profile for your franchising efforts is so critical. It is not about franchising. It is about people doing business with people. 28 Profiling. Strategy. Results. ®
  29. 29. 250 Parkway Drive, Suite 150Lincolnshire, Illinois 60069 USA 1-847-465-0111 www.franchisecentral.com www.franchisearchitects.com www.franchisenavigator.com www.businessnavigatorsurvey.com 29 Profiling. Strategy. Results. ®