Franchising your business for long-term success (pt 3)
2007-07-19 15:13:30 -
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Founder of O’Briens Sandwich Bars, BRODY SWEENEY, continues his series on how to cope with the stresses and strains of starting a new enterprise 

Put franchisees’ profitability before your own
In the early days, I was – strange as it sounds – delighted to see some of our franchise partners making a lot more money than me. Apart from the pride I took in the fact that they were doing it under our brand, I knew that, in the long term, their success could only be good for the company, because the demonstrable success of the concept would help attract bigger and better-quality franchisees into the system.

Too many fledgling franchise companies get this bit wrong, and put their profitability before that of their franchisees. Of course, franchisors need to survive while they build up their chain – it’s just that this shouldn’t be done at the expense of franchisees’ profitability.

Love your franchise partners
I want my business associates to know that I would lay down my life for them. I don’t mean this literally, but in the sense that I have an absolute commitment and loyalty to them and will do everything I can to help them – and O’Briens – achieve a common goal.

I know that many of the people who work with me would do almost anything for me. It’s a lovely feeling. And I’m sure that the fact that my colleagues know that I would do almost anything for them makes them feel better about themselves. It’s a mutually reinforcing arrangement.

Having that kind of relationship with some of your key franchise partners – and not necessarily the biggest ones – is one of the most powerful forces you could have in a franchise. Of course, it’s not possible to have that kind of relationship with a huge number people, and as the chain grows, the percentage of franchisees with whom you can have this type of relationship will fall. Nonetheless, instilling this ethos in your staff, in your corporate culture, and in the way you conduct your business dealings sends an extremely strong message throughout your network.

Earn your royalty
Our job as a franchisor is very simple. It’s to grow the sales and profits of our franchisees and, by extension, the brand. If we do this successfully, we will make a good profit. We don’t do things the other way round: getting our profits first and then doing a good job delivering sales and profit growth to our franchisees.

Franchisees will be generally content when their businesses are growing – but when the growth stops, even if this is for reasons that are outside your control, they will find reasons to be resentful of the large sums of money they are paying you. It is very important for the franchisor to understand this.

We are always dreaming up new ways of improving the business, and we never stop thinking of ways in which we might be able to increase the sales and profitability of our franchisees.

Most of our new ideas don’t work, and some people think we make a lot of mistakes and are rather accident-prone. But I think you have to be willing to try a lot of different things in order to get a few things to work for you.

The need to impose discipline and not turn into a democracy
This is where the ‘iron fist in a velvet glove’ quote comes in quite nicely. No one likes to work in too disciplined an environment. In fact, many of our franchise partners come to us because they have promised themselves that they will never again work for someone else. They want to be their own boss and control their own destiny, not be ordered around any more.

But a brand like O’Briens is built around some clearly defined ideas. For example, we sell good-quality fresh foods in an upmarket Irish-themed environment. Some of our franchisees don’t like the colour of our logo; in fact, if they had the chance, they would probably change it. We won’t allow that. Some franchisees would like to play the radio as background music, instead of playing Irish music (of which they are free to play whatever type they want). Again, we don’t allow it. Others want us to sell chips or French fries alongside sandwiches. Chips or French fries will be sold in O’Briens only over my dead body!

We have had a policy, ever since we started the business, of taking control of all our retail properties. This gave us the ultimate say as to how one of our franchises is run. The downside to this is that if a store closes for any reason, we are ultimately responsible for the rent. But I think that, as our own money is on the line, we are much more careful about a particular location before we ask a franchise partner to make a big financial commitment to it. You have to stand up for what you believe in, even if that means attracting the anger of some your franchisees.


Next week: Franchising your business for long-term success continued


n Taken from Making Bread – The Real Way To Start Up and Stay Up in Business by Brody Sweeney, published by Liberties Press – buy at www.libertiespress.com and get a 10 per cent discount
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