Growth for the Right Reasons

Important lessons learned and shared from a short-lived franchisor.

By Nancy Friedman

Awhile back, I received a call from two ex-franchisors who had heard about Telephone Doctor Customer Service Training; and they were impressed with the idea. Our business was "replicable," they told us.

The two young men came to our St. Louis headquarters, in Bridgeton, Mo. They gave us their history in the franchise industry; it was impressive, and we listened with excitement. They had a good story.

When they opened the spreadsheet, we got really excited. We could, they thought, become second only to other brick-and-mortar learning centers. Again, they repeated to us, our model was extremely “replicable,” a key factor in the success of any franchise, we were told. 

My husband, son and I deliberated for a long time, and decided to sign up. The two ex-franchisors pulled together a dinner party and invited several prospective franchisees to hear the story of how Telephone Doctor Customer Service Training was created, our mission, our passion and our philosophy – a Discovery Day of sorts.

On a one-to-10 scale, the dinner was about a six. I personally was not impressed with the prospective franchisees, but I listened. The first two prospects were easy to get on board. They were Telephone Doctor training clients who saw great value in our content; they knew and loved our training.

Then we made one of the biggest mistakes: We delegated the selection of our new franchisees completely over to the ex-franchisors. We took a hands-off approach… so we could run our business successfully.

Stay Involved

This brings up an important point: The founder, or founders, of a franchise should be involved with selecting franchisees from the beginning. No one knows your business like you do. Those who create a business are the most knowledgeable.

New franchisees can be “nice” people, but nice doesn’t equal sales, nice isn’t technical, nice isn’t a manager, and certainly, nice doesn’t mean good. It can be worrisome when someone is described as “so nice.” You know what? People are supposed to be nice. That’s standard operating procedure. Soon we had five franchisees, and early on saw it wasn’t working successfully.

This was during the time when brokers and franchise consultants were not around. Or at least not as popular as they are today. If we had used a successful, knowledgeable broker or franchise consultant, it’s likely we could have made it. But we didn’t.

For your franchise to be successful you need at least three separate individuals in distinct roles, each with a different skill set:

A manager who doesn’t want to train;

A salesperson who only wants to sell; and

A trainer who only wants to train.

We didn’t see one person doing all three jobs. The two former franchisors felt differently – a critical disconnect. We ended up with five franchisees, four we let go very quickly and one we kept too long. Watch out for the following:

Know your consultant or whoever is selling your brand. Know them well. Know they most probably won’t know everything you do.

Let them do the heavy lifting in finding new franchisees and the initial intense job of checking them out. But be there to interview new candidates; they represent you.

It’s very difficult to be good at everything. People need to know what they are good at and know where they have trouble.

Everyone is not a good candidate. Don’t fall in love too fast just because they play golf too. Or love your business. Or say the right things. Be on the lookout for things you know are needed as an owner.

Can they, or will they, follow the recipe of your success?

Reach out to others who understand employee hiring and retention.

Sometimes people hire folks because they’re breathing. You want fast … you want more. You should want good first.

Can they or will they follow the recipe of your success? 

As for life after being a franchisor, we are doing well. We are not a franchisor pulling in $15 million or more, but we are very happy and have a growing, thriving business. David, our son, created serviceskills.com, and best of all, we’re happy. There are advantages to staying small. Seek out others who have gone through something similar before finding yourself on the wrong end of a big mistake.

It was one of the best things we ever failed at. It worked out for us. We’re lucky.

The cautionary lesson: While multi-unit franchising may be your dream, expansion should be given a complete examination of all angles before proceeding. There are plenty of reasons why a small business doesn’t make it. Watch out for the few reasons mentioned in this article, and seek out others for advice.

Nancy Friedman is a former franchisor and President of Telephone Doctor Customer Service Training.