Franchising: The Importance of Recruiting the Right Franchisee Team Members

franchising, five pennies, lonnie helgerson, helgerson franchise group

“Expensive Trouble” is the phrase that best describes what happens when you recruit the wrong franchise owners into your system.  Trust me (I speak from experience), you do not want any more trouble in your system than you will have on a normal basis.

What?  You thought what? Of course you are going to have franchisee challenges.  No matter how selective you are and how well you foster positive relationships you’re going to periodically hit a bump in the road.  The goal here is to minimize the risk of an incompatible franchisee (the bump) and increase the acceptance of a potential superstar by establishing a desirable profile and “awarding franchises to those that match it.

The best description I ever heard on the importance of having the right franchisees in your system was from Joe DePinto, the CEO of 7-Eleven® during his keynote at the International Franchise Association’s annual convention in 2011.

“When the relationship is good, franchisees can make a bad system succeed.  When the relationship is bad, franchisees can make a great system fail!”

While on-going relationships with franchisees can sour for various reasons, what Joe’s statement points out is that if you allow the wrong franchisees to enter your system mayhem can ensue.  The operational system isn’t followed and that leads to declining system revenues, broken system rules, and loss of franchisee profitability, plus the cost of time and money you spend to clean up the mess both operationally and legally.

Now that you know who trouble is let’s switch gears and focus on the positive side of this issue.

Brad Pitt Can Help You

I’ll be the first to admit that I have made many mistakes in recruiting franchisees over the years, and have had my share of messes to clean up.  There isn’t a franchise system on the planet that has a “perfect franchisee cloning system” or hasn’t made a few blunders along the way by allowing the wrong franchise owner or two into their system.  Again, the point of the exercise is to minimize these blunders.

Recently a good friend suggested that I watch the movie Moneyball starring Brad Pitt as Billy Beane – the real life controversial team manager for the Oakland Athletics.

His words of wisdom to me were, If you want to learn how to recruit franchisees, watch Moneyball.”  I am always a bit skeptical about these types of suggestions, but I highly respect my friend’s opinion and figured that since I have tried everything else with franchisee recruitment, why not apply a little Hollywood to it?

I must admit, he was right.  My approach to franchisee recruitment is forever changed.

I won’t repeat the entire movie, but the premise is based on actual events surrounding an extremely small-budget team trying to compete for players against big teams such as the NY Yankee’s.  It was almost impossible to do, because as soon as he groomed a decent player the bigger teams would pay more money and the player was gone.  Hence the term, Moneyball.

Having lost one too many players and games, Billy Beane decided that there has to be a “new” way of recruiting players rather than the “old” way of trusting a talent scout’s intuition and throwing money around.

If this is starting to sound familiar, it should because as franchisors we have, for years, relied heavily on the “old” way of recruiting franchisees – trusting a franchise sales person’s intuition (talent scout) and throwing money at every advertising portal (player salary).

In the movie, Billy Beane runs into a first-year analyst named Peter Brand who graduated from Yale with an economics degree.  Peter realized that team managers think of buying A- list players and that many great players with core talents were being overlooked and undervalued for a variety of reasons.

Peter convinced Billy to focus on buying “wins”, which meant he needed to buy “runs” and that meant buying “base hits”.  Billy and Peter made a monumental change in recruiting players and ended up winning 20 consecutive games that year with a bunch of perceived misfits.

The following year the Boston Red Sox attempted to recruit Billy Beane to implement his game-changing methodology.  He turned them down and they used his tactics to win the World Series, breaking an 86-year period of losing the series known as the Curse of the Big Bambino (Babe Ruth).

Billy Beane forever changed baseball with his methodology.  Will you continue the “old” way of selling franchises or will you adopt the “new” way of recruiting them?

The above is an excerpt from my book Five Pennies: Ten Rules to Successfully Building a Franchise Mega-Brand and Maximizing System Profits.

Need some fine-tuning with franchisee recruiting? Give me a shout for a free consultation.     

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