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The Franchise Manual Podcast

The Franchise Manual Podcast is about all things "Franchise" and the people that make it look easy.
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Now displaying: 2018
Dec 1, 2018

My Podner in this episode is Robert Bilotti and he’s going to talk to us about franchisee onboarding and training.  We will dive deep into “training theory” and then wrap it all up with a step-by-step discussion on how a new franchisor needs to set up a training program for franchisees.

 

Time Stamps

Rob Bilotti Intro

00:00:40

Segment 1

00:02:31

Get to know Rob Bilotti

Segment 2

00:18:55

Topic Segment – Franchisee Training and Onboarding

Segment 3

01:14:03

Quickdraw Questions

 

Topics discussed in this episode:

The difference between a franchise system and a collection of mom and pops is “Training”

What is the difference between onboarding and training?

When do I need to hire a full-time trainer?

What to train versus how to train

Can a start-up franchisor use the operations manual as the training program at first?

Your first franchisees will be some of the most important validators of the concept, and if you skimp on training up front, it will come back to bite you.

Your most important franchisee is the first one after the former employee, friends, and family franchisees. That is the one that will really be the proof of concept. Be sure that you have a solid training program BEFORE that franchisee starts.

Invest in a learning management system (LMS) early

What is an LMS?

How does training change when you are in growth mode?

How to select an LMS right for your system

Moodle is a free, open source LMS

Look for a user-friendly system (from the administrative perspective) and a nimble system. Learn this by doing lots of demos and talking to other companies that use an LMS. Google is a great resource.

LMS support is probably one of the most important features. Usually, the more you pay, the more support you get.

What are the different modes of training (modality)?

  • In person Instructor Led
  • Virtual Instructor Led
  • Virtual Learning
  • Videos
  • Print
  • Audio
  • Knowledge Sharing (wiki learning)

If you set up a mentoring program to help train new franchisees, be sure to invest in a training program for the mentors so they can be trained in how to train.

There is a difference between lecturing and facilitation when it comes to training.

There is not one modality that is best for everybody. There is not a “one size fits all” when it comes to training.

Survey your franchisees, and do it often, how you are doing with training. Don’t just capture “smile sheets”, rather actionable information. This should happen every 3 to 6 months.

You CAN measure return on investment in training, especially in a franchise system.

Use gust satisfaction surveys to draw training topics.

What are the steps that a start-up franchisor needs to follow to develop a training program?

Step1:

Document – document – document. What makes your business a success.

Step 2:

What can you expand on from that? Create actionable content from that documentation? This is the “what”.

Step 3:

Determine how you will take that information and disseminate it to the people who need it? This would be the franchisee and their employees. This is the “how”.

Step 4:

Determine how you will support your franchisees in their training efforts to their employees.

Step 5:

Establish a mechanism for measuring the results of the training.

 

Allow plenty of time to develop your training program. If you start developing your training program after you have signed your first franchisee then you have waited far too long.

 

Rob Bilotti

www.novitatraining.com

info@novitatraining.com 

 

Kit Vinson

FranMan Inc

www.franman.net

kit.vinson@franman.net 

214-736-3939 x1

Oct 16, 2018

My Podner in this episode is Ms. Lori Kiser and she’s going to talk to us about how to best utilize a franchise broker consultant company.  Everybody wants to know how to find the path to granting more franchises, and in this episode we definitely talk a lot about that.

Time Stamp

Lori Kiser Intro                                  00:00:40

Segment 1                                          00:04:30

Get to know Lori Kiser

Segment 2                                           00:24:19

Topic Segment – How to work with Franchise Broker Consultants

Segment 3                                           00:57:15

Quickdraw Questions

 

Topics discussed in this episode:

Franchise Broker Consultants are not business consultants in the traditional sense of the word. They specialize in producing qualified, vetted leads for franchisors.

A franchise broker consultant is not part of the sales team of the franchisor. They will not take the prospect through the franchisor’s sales process, though they will stay involved as the candidate passes through the process.

In order to be successful with a franchise broker consultant, a franchisor must have the following already in place and running within their concept:

  • An in-house franchise development staff (sales team)
  • A well-defined sales process
  • The ability to go beyond the generic 6-step sales process, and know how to learn and understand the prospects dreams, desires, and business goals
  • Unit economics that are positive and consistent
  • A leadership team with a solid understanding of franchising

 

A typical start-up franchisor is usually not a good candidate for a franchise broker consultant group because the broker consultant is paid based on successfully bringing a prospect that eventually signs a contract with the franchisor. Because start-up franchisors typically don’t have the infrastructure in place to handle the lead volume, broker consultant groups are less likely to accept them as a client.

 

How to take your startup system and get it ready to be accepted by a broker consultant group:

  1. Create a specific landing site for franchisees. This will demonstrate to the broker consultant group that you are knowledgeable and organized, and that you have a place to start a new prospect so that they don’t fall between the cracks once the prospect is delivered to the franchisor.
  2. Create a sales process that works for your team and track the performance of the sales process and the development team. If you can’t prove that you can successfully close a prospective franchisee then a broker consultant group is not very likely to burn good qualified and vetted leads with your system.
  3. Be able to show GREAT unit economics – meaning, be able to show that the franchisees are making money.
  4. Demonstrate that all of the existing franchisees will validate well. Know that all of the franchisees are happy and that they will sell that happy story to a prospect who makes the validation calls.
  5. Demonstrate that the franchise system has all (most) of the amateur mistakes out of the way so that the franchise broker group’s brand won’t be tarnished by referring leads to the franchisor client.
  6. Have an FDD that is registered in al of the required states so that the franchise broker consultant will not be limited by geography. Similarly, be ready to offer and close franchise deals nationwide, including developing a nationwide support group to service the new franchisees.
  7. Demonstrate that your system can handle the stresses of sales volume, such as being able to build out a location for multiple new franchisees while simultaneously walking a second set of prospective franchisees through the sales process, AND manage all existing franchisees at the same time. This requires a team that is in place and seasoned.

A typical franchisor broker consultant will sift through over 100 candidates before they find one that is worthy of passing on to the franchisor clients.

The Franchise Rule does apply to a franchise broker consultant, although the broker consultant shouldn’t be doing any selling of the specific system.

 

Once a franchisor is able to join forces with a franchise broker consultant group, what is the best way to manage that relationship?

  • Think of the broker consultant as a talent scout, scouting players for your team
  • The franchise broker consultant will act more like a brand ambassador to the candidate.
  • Since the franchise broker consultant already an established relationship with the candidate, the franchisor should trust and utilize the candidate’s information from the broker consultant when the franchisor is brought into the relationship.
  • Be open to adapting to the processes, nomenclature, personality, and style of the franchise broker consultant group, as well as to the type of candidate that they typically generate
  • There are different types of consultant groups as well as different types of consultants within each of the groups. You will likely only work with a handful of consultants within a consultant group. That is normal.
  • The best franchise broker consultants are not as enticed by your commission dollars as they are developing their referral network. These consultants rely heavily on referrals from happy candidates who eventually convert to franchisees. While it is important to pay consultants a fee that is competitive, understand that they need to like you and believe that your system is successful before they burn good leads on your system.

 

 

Lori Kiser

www.lorikiser.com

 

Kit Vinson

FranMan Inc

www.franman.net

kit.vinson@franman.net

214-736-3939 x1

Sep 12, 2018

My Podner on this episode is Tom Spadea. Tom and I will discuss the benefits of properly managing the FDD and the Franchise Agreement, from the beginning, making sure to keep the end in mind. The "end" he speaks of is a possible acquisition by an investment company. What will they expect to see when they look at your franchisees contracts in your files?

 

Time Stamp

Tom Spadea Intro                              00:00:40

Segment 1                                           00:03:22

Get to know Tom Spadea

Segment 2                                           00:24:40

Topic Segment – Managing Your Franchise Agreements with the End in Mind

Bonus Segment                                 00:57:15

Managing Franchisee Growth

Segment 3                                           01:02:50

Quickdraw Questions

 

Topics discussed in this episode:

Where do most franchisors get it wrong? Many franchisors and franchise attorneys focus mostly on the substantive issues of the and forget about procedural issues related to the process - managing latent defects

  • Item 23 receipt page not being properly executed and filed
  • Guarantees not properly executed
  • Individual versus LLC signing FA/lease

You can have the best FDD and franchise agreement in the world, but if you don’t manage the process properly, it can cost you a lot of money in the short term with an unenforceable contract, and in the long run, upon exit.

It’s important to understand who the real audience of the Franchise Agreement is. It is the franchisee, but it is also a prospective private equity investment firm who may want to purchase your system in the future.

 

What is the process?

Step 1: Make sure that the franchise agreement is up-to-date

Step 2: Geographical Analysis - Ensure that the franchisor is registered in every registration state where the concept will be offered. That includes where the prospect is currently located as well as where they want to open a location. Both states must be registered if required by that state.  Deliver the correct FDD for the state.

Step 3: Ensure that 14 days pass between delivery and signing of the Franchise Agreement, not including delivery day and signing day

Step 4: Spend the time to ensure that names are all spelled correctly, along with middle intials. Check the address, LLC name etc

Step 5: Prepare a custom franchise agreement based on the specific agreements made between franchisor and franchisee – do not use the sample franchise agreement that is included in the FDD. Deliver the document to all required recipients and ensure proper signatures

Step 6: Ensure that the lease includes all of the required language as per the franchise agreement

 

There are many different software packages that can help you with each aspect of the transaction, but Spadea Law has the platform that hits every element. Compliance Map helps franchisors ensure that they are only offering the franchise in the proper states. The link to the Compliance Map software demonstration is below:

https://vimeo.com/260105446

If you haven’t managed the steps of the process well, then it is not too late. Review your documents and get the documents in line now, before you are approached by an investor.

 

Books:

Exponential Organizations

By by Salim Ismail and Michael S. Malone

 

Seven Habits of Highly Effective People

By Stephen Covey

 

The E-Myth

By Michael Gerber

 

Khan

Conn Iggulden

 

Podcasts:

Dan Carlin’s Hardcore History

 

Tom Spadea

Spadea Lignana

www.spadealaw.com

610-662-0192 (cell)

 

Kit Vinson

FranMan Inc.

www.franman.net 

214-257-7685 x1

 

Kit Vinson

 

Aug 22, 2018

My Podner on today’s show is Mike Pollock and he’s going to give us tips on how to build a franchise development system for your franchise. But it was more than just that because we also talked about how to take a warm lead through the process to close the deal.

 

Time Stamp

Mike Pollock Intro                              00:00:40

Segment 1                                           00:03:15

Get to know Get to know Mike

Segment 2                                           00:22:10

Topic Segment – Franchise Development 101 (Sales)

Segment 3                                           01:18:40

Quickdraw Questions

 

Topics discussed in this episode:

How to set up an efficient process for franchise development

·         Brand Overview Presentation (45 minutes to 1 hour long)

·         Develop a solid franchise prospect application that focuses on:

o   Background

o   Financial situation

·         Have the Unit Economics Call

o   FDD introduction call (15 minutes)

o   Unit Economics (45 minutes)

o   Receive signed Item 23 (Proof of receipt of FDD)

o   Password

o   Validation instructions

·         Validation Debriefing Call

·         Discovery Day

o   Brand Overview Review

o   Meet the Team

o   Lunch and dinner are the best opportunity to visit with prospects

o   Field Visits

·         Voting Process

It is best to have multiple prospects attend a discovery day (between 4 and 5)

If you are going to hire a company such as FranLift to manage the franchise development process, then it is best to get them involved earlier rather than later.

Have a marketing budget set aside in advance. It typically costs between 8K and 15K to bring 1 franchisee in the door.

 

Mike Pollock

FranLift Franchise Experts

mikep@franlift.com

214-551-0261

 

Kit Vinson

FranMan Inc. (Franchise Manuals)

Kit.vinson@franman.net

214-736-3939 x1

 

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