Do Transitioning Corporate Executives [Really] Make Good Franchisees?

This question was discussed on Linkedin approximately a year and a half ago, and the following is a comment from a franchise professional that I believe raises some very important additional questions about transitioning executives as franchisees.

Maybe we could ask the question another way. How have franchisors succeeded when they awarded franchises to transitioning executives? . . . Puts a little different emphasis on it.

We sometimes look at franchise success as up to the franchisor, i.e. it’s the franchisor’s job to be sure franchisees succeed, and that includes transitioning executives. But of course we know that not all franchisees, including transitioning executives, are created equal. Some are better than others! People in transition may, in fact, not make very good decisions–they may panic and jump into a franchise too quickly and they don’t do all the homework that’s necessary or they don’t at least ask all the right questions.

It would be interesting for franchisors to reveal how “transitioning executives” have fared though that’s probably asking a bit too much. Because again, even if the transitioning executives failed, it doesn’t mean the franchise system is a bad one. Now it may not be right for transitioning executives, but that’s probably incorrect. Would that be like saying it’s not right for left-handed people? I just don’t think “transitioning executive” matters. What matters is how well prepared the candidate is for franchising and whether or not the candidate picked a good franchise. Because we also know that all franchisors are not created equal, either. Some are better than others–and I bet there are some that could tell us 100% of the transitioning executives that joined them succeeded.

Any thoughts?

The Journey Continues Here for Franchise Sales Professionals

pos·si·bil·i·ty noun; plural noun: possibilities – definition… a thing that may be chosen or done out of several possible alternatives.”one possibility is to allow all to participate” – synonyms: option, alternative, choice, course of action, solution

I’ve shared this definition of possibility/possibilities as I want to emphasize two important points – ‘a thing that may be chosen’ AND ‘to allow all to participate’ as that’s exactly what is the case regarding the upcoming Franchise Brokers Association Conference & Expo. Attendance at the event has been open to franchise sales consultants, brokers and basically anyone involved in franchise sales SINCE THE EVENT WAS ORIGINALLY ANNOUNCED and with registrations continuing according to projections we’ve decided blowing away projections should be the order of the day.

Actually, we want to share our experience, education and also messaging about a very bright future of possibilities with as many franchise sales professionals as possible. As such, I want to personally bring to the attention of any and all involved in franchise sales (and also those interested in becoming a franchise consultant or broker) that this event will help you explore possibilities you may not have known existed. Personally, I’d like to see you at this event because I know it will payoff for you in multiples! But before you say, yes or no, let’s take a peek at what’s in store for event attendees…


Improve Your Franchise Skills with Techniques Presented by Industry Professionals

The way people are looking for franchises is changing. Every franchise seller in the business must learn about these changes and adapt to them. Failing to do so will only lead to trouble! Over the course of this year we’ve heard a lot of requests from our members on they can develop additional lead sources other than traditional methods. For this years conference we’ve assembled a hot list of speakers and events directly aimed at addressing this critical business need.

The mastermind session features a panel of industry professionals who have all been successful at capitalizing on social media and non-traditional lead channels. Yep, I’ll be on a panel or two along with others including a franchise professional that actually closed a million-dollar deal with these techniques! This is a session you can’t afford to miss.

Engaging Speakers & Content

Our Keynote is Nancy Friedman, the President and founder of Telephone Doctor. She’s been featured on numerous programs such as the Oprah Winfrey, Today, Fox News, CNN and CBS in the Morning. Her engaging session will be interactive with our audience and will focus on improving your telephone game and converting more inbound leads into sales.

Network, be productive and yes, have fun

  • Food, wine and entertainment await you!
  • We will take you to several entertainment filled events where you’ll be able to relax and meet the latest top producers and exciting concepts.
  • Don’t stay behind in what you did yesterday!
  • You’ll be taught real-world education on important techniques you need to know to be relevant in today’s changing world.
  • Mix and network with the elite!
  • This year we will honor the latest group of franchise consultants and concepts that have proven their commitment to excellence and achieved results.

Hey, don’t just take my word for it. See it for yourself by registering at for our great event in Orlando November 13-16.

Explore the Possibilities. Your future will appreciate it!



Success… It Starts and Grows with a Vision

In a recent interview, I was asked my opinion about why some Private Equity firms fail in their efforts at operating what was originally considered a successful franchise system, while others take the system to even higher levels of success… As you’ll see by my response below, I actually started at the end and worked backwards. But in the end there is a common theme and its built around relationships, or lack thereof. Certainly, systems play a big part in the success equation but losing sight of “people” is a sure way to create a disconnect, even within the most perfect systems. My response and theory may be too simple for many to agree, but I do feel it lends towards the foundation of any successful business in one way, shape, fashion or form.

“All too often you hear about founders buying out the Private Equity firm. I personally, know of two that have done so recently, and for different reasons. And, even though only one was a franchise company, there was a common denominator in the circumstances that had developed within the organizations that led to the founders deciding to buy out the PEs… the “parent” company lost sight of its relationship with its “employees & franchisees” and the end-users, “clients & customers”.

My opinion is that “true” mom & pop operations are typically built upon the foundation of relationships, and it’s the strength of those relationships that build the foundation of a strong organization complete with common beliefs, values and mission. It definitely becomes an interdependent relationship. I have rarely seen that occur when PEs get involved where it’s more numbers, numbers, numbers. Don’t get me wrong, numbers are important. But, it’s the lack of balance between driving towards making the numbers and building relationships that is often missing. Ultimately causing rifts in the organization with the customer or client feeling the lingering effect of diminishing service levels.

Let’s look at a similar situation that occurs all too often in a very typical mom and pop setting even without the inclusion of a PE in the equation. Mom and Pop have run a very successful business for 25 years. They have done quite well over the years, building the business very methodically, never taking on too much debt at any one time. But still progressive in growing to meet customer demands. Sure, their product or service stands out as excellent. But it’s the relationships they have fostered over the years that have truly made the business successful.

Looking ahead, Mom and Pop have structured a very strong succession plan. Junior has gotten his MBA and is primed to take over the business. In fact, Pop has insisted that Junior also work five or so years out in the corporate world so he can gain some hands-on experience, and mature. Mom and Pop have met with their attorney and CPA and have everything in place for Junior to take over the family business. What’s next is a situation that occurs all too often when Mom and Pop are no longer in the picture.

Junior, complete with new ideas, a wealth of education, and some successful business experience, begins operating the business. He introduces new technology, replacing the antiquated systems that had been in place since day one. Junior streamlined operations, improved inventory control, and basically tweaked here and there to the point that the business appeared to be transformed to a business that appeared bigger than it was – almost like it was a part of a national chain.

Initially, customers loved the transformation and the buzz within town was full of praise and admiration for the family. But what transpires over the next few years as things begin to change as the business becomes less personal and more structured is actually the beginning of the end.

Strict policies have been put in place for both customers and employees. Product and service lines have become more defined, but at the expense of some customer favorites being eliminated. Customer service, having become more automated has reduced the necessity of a large staff. In-store signage has taken over where courteous employees once stood. Well, the list goes on… to the point of the business losing sight of people and relationships. Employee turnover continues to increase. Customers’ faces are no longer familiar. And, when a true national chain opens on the edge of town, foot-traffic starts to diminish.

You see, with all the great succession planning that Mom and Pop painstakingly put into place, they missed a key component to the success of the business. And when Junior transformed the business he also lost sight of that key component. It basically comes down to WWPD… “What Would Pop Do?”

WWPD is basically the relationship part of the business. To put it simply, Pop knew when to put his arm around an employee. Pop knew when to come out from behind the counter. Pop knew how to make a customer feel special. Pop knew to carry certain items that some of his “regulars” loved. And, again, the list goes on… Pop knew, but Junior didn’t. It’s the classic example of the disconnect between WWPD and MBA, and it’s a similar disconnect between a founder-run business and a PE-operated business.

Now, I’m not saying that it can’t be done, or shouldn’t be done… meaning the sale of a successful business to a PE. Absolutely, it’s the American Way! Instead, along with the financial and legal succession plan needs to be a visionary succession plan that basically outlines and teaches, “What Would Pop Do?”

So, in addressing the original question, let’s just insert Mom and Pop for the franchise, the employees and customers for the franchisees, and Junior for the PE… and the scenario fittingly plays out.”

Culture Is A Work In Progress

Work in ProgressI do believe, in many cases, the level of business success contributes to the decision on whether or not a high performer is let go because their style is detrimental to the culture. In the case of a high performer in a business that is barely making it, that high performer probably stays. This situation works for the immediate time being but not for long-term growth. It’s difficult to build a team in this scenario. A high performer with a bad attitude in an environment with other high performers, probably should go. But not without trying to get the person in line first. Bad attitudes are detrimental to team building. However, often times a bad attitude actually develops as a result of how people are treated by management, or by a particular manager. There are various other scenarios as well.

Culture lives and breathes in all organizations. It must be nurtured – fed and taken care of. If sick, the virus causing the sickness must be addressed. In the case of cancer, it must be identified, isolated and removed – making sure to properly treat closely affected areas to be sure of total elimination. If healthy, it must continue to be fortified – an immune system built and new well-being programs developed.

At the end of the day, Culture is a work in progress! It must be fluid. It must fill in the cracks and gaps, and reach it’s own level. It must be understood by all. It must be allowed to grow. But, it must be managed. The key is whether you do so reactively or proactively!

Recently, I read an interesting article about strategy and its affect on culture. Key paragraphs and link to the article follows…

Does strategy matter?

If you do not think that it matters then you are in good company. There are many who question the value of strategy. And I see many companies where there is no formal strategy; the informal strategy is to keep doing what has worked in the past or to chase what is fashionable today.

Strategy v Execution

When it comes to questioning strategy there are two schools that are particularly prominent. First, there is the school of execution. The execution school which says that strategy is waste of time. Why? Because strategies are generic-obvious and what matters is execution. The ability to turn strategy into the daily live of the organization. Clearly, there is some truth in this school. Strategy which cannot be operationalized is waste of time-resource.

Strategy v Culture

Then there is the school that says “culture eats strategy for breakfast”. Yes, culture is powerful. Culture determines what gets done and how it gets done. A strategy that does not take into account the fit with culture will meet lots of resistance. Getting people to enact such a strategy will be like fighting a guerilla war with an enemy who is patient and cunning. What is forgotten is that culture can be and is influenced-shaped-shifted through strategy.

To see strategy and culture as being separate and distinct is a gross misunderstanding. This misunderstanding arises due to our reductionist-analytical thinking. Strategy and culture are interlinked. Put differently, if you change strategy, you will take actions that will influence the culture. And if you change culture it will eventually influence the strategy.

Read more HERE.

When Culture is Out of Alignment

Recently, in a discussion about culture on the IFA’s FranSocial site, the discussion was quite robust and included the following statement… “The challenge becomes determining where things might be out of alignment and methodology to realign.” My response was as follows:

To me, the development and management of culture is much like that of a brand…

It must be planned.
It must be nurtured.
It must be allowed to grow.
It must be invested in.
It must be protected.
It must be promoted.
It must be cherished.
It must be the center of the universe.

I believe it’s fairly easy to determine when and where things are out of alignment in a franchise organization – disgruntled franchisees, frequent franchisor employee turnover… just to name a couple that would be very apparent. Obviously, these are the results of, but not the root of the problem that caused things to move out of alignment. Mostly the problems occur (and fester) due to poor communications and lack of transparency between franchisor and franchisees. Inconsistent messaging adds fuel to the fire. Basically, similar problems to a marriage or other types of relationships that fail.

As for methodology to realign that takes full commitment from all parties to the relationship. However, in a franchise relationship it takes the franchisor to take the bull by the horns and lead the charge. It takes full commitment to open, honest, transparent communications. Even through difficult scenarios. After all, franchisees have made a significant investment and they do need to understand the good, bad and ugly. The precarious issue is, how much is too much? do franchisees need to know everything? Getting back to square one, a benchmark of sorts is critical as emotions running high will dictate more rather than less.

I talk a great deal about positively memorable experiences and I believe it applies to the franchise relationship as well. I won’t get too deep here as I’ve authored an article on the topic that is coming out in this month’s Franchising World magazine. But I will share my thoughts on what I refer to as, “The Emotion Circle”. This circle could be looked at in any transaction or relationship.

Emotion CircleThere are seven key steps within the circle. Think in terms of a clock with the top being the starting point. That’s where the relationship begins. Once something occurs that doesn’t meet expectations the first step is surprise. From there it may escalate to the next steps of disappointment and doubt. Or, it may not escalate but the next “incident” moves the needle along. Sometimes an unaddressed issue moves it. Now, it’s inevitable things happen and expectations aren’t met or even understood. Which is why open, transparent communications are paramount. If the issues are discussed openly and frankly in a respectful way, the needle can be moved back to the 12 o’clock position with no or minimal chance of fueling a fire.

However, if not addressed in a timely and respectful manner the fire burns rapidly and on occasion to the point where it’s out of control. And, just like wildfires in the forest, these fires can jump across roads from house to house and community to community with devastating results. In the case of the Emotion Circle burning out of control, the next steps, often in rapid order include frustration, anger, hostility and remorse (think “buyer’s remorse). The end result is typically broken trust and as we know, trust is the backbone of ANY relationship.

So, in order for there to be realignment, trust must be rebuilt. It’s not easy but it can be done, but it takes a huge commitment.