Fear And Consequences Of Failure: A True Story Retold

I’ve been asked time and again to post the following article that I’ve written about my own personal experience as a multi-unit franchisee where I succeeded at first, only to crash and burn later on. This article has been posted on several of my blogs, and picked up by numerous other blogs and online magazines. I have received numerous comments and inquiries about the article, individuals sharing their personal experiences and requests for assistance. Although I cringe at the thought of any business failing, I admire and respect the fact that franchisees and franchisors alike know when to put their pride aside and ask for assistance, and I look forward to providing my experience and expertise to help determine a practical resolve to their problems.

I’m proud to say this article has been instrumental in helping a number of businesses keep their doors open and work towards recovery. On the other hand, I’m also sad to say several businesses were not as fortunate, but at least the owners were able to exit with dignity and in few cases, with less liability than they previously thought possible. And, in one case, the owner actually exited in the black when we were able to facilitate the sale of her business when she previously thought about just walking away.

Fear and Consequences of Failure

failure-photoI can personally relate to the trials and tribulations of owning franchise businesses as I have “been there and done that” and have experiences on both ends of the spectrum from achieving overwhelming success to dealing with bitter failure. I have definitely come to understand the fine line between success and failure in trying to nail down the American Dream.

I know it is sometimes counterproductive to even mention failure which is why the subject is always avoided and never discussed. Yet, it’s out there and it’s real. Once franchisees face the possibility of failure and its very real consequences they can be motivated to understand that failure is not an option and commit 100% to a plan that addresses immediate problems and provides solutions accordingly. Even if it’s necessary for the plan to be quite drastic or aggressive due to prevailing circumstances, franchisees that unequivocally realize that failure is not an option are prepared for immediate action.

Let me emphasize one point. Franchisees should not view poor sales and disappointing profits as either potential or immediate failure and stick their heads in the sand. I made that mistake in the past and suffered the consequences. Instead, franchisees should build upon the courage it took to become a franchise business owner and recommit to success as they did when they first took the entrepreneurial plunge.

They need to remember their wishes, hopes and dreams that prompted the decision to own their own business? They need to remember the admiration of family and friends when they heard about the new venture? They need to remember the excitement when they actually signed the franchise agreement?

Unfortunately, there’s a very distinct possibility the root of the problem is embedded in the franchisee’s actions, non-conformity to the franchise system and unwillingness to face reality. However, as there was some shining light evident during the franchise award process, it may not be a totally lost cause if the franchisee is made to completely understand the implications and consequences of failure.

As franchisors are faced with the potential of closed units [during this recession] that may be the result of things out of their control, it’s imperative they don’t lose even a single unit just because a franchisee just flat out needs a snap back to reality. It’s worth the effort.

Let me clarify something. I failed as a franchisee. Not because of anything the franchisor did or didn’t do but because I put and kept my head in the sand and did not face reality. I could go on and make excuses about things that happened around me but at the end of the day I could have turned things around if I got my own head out of the sand, made some difficult decisions and took full, immediate responsibility.

Unfortunately I was scared of failing. I was afraid of what people would think. I was ashamed at what other franchisees, ones I put in business, would think of me. I couldn’t even think of facing my family. All lame excuses for not taking responsibility. Maybe a hard swift kick you-know-where would have helped.

Did I mention that I previously ran the franchise company where I failed as a franchisee? Did I mention I was elected by fellow franchisees, President of the National Advisory Council? Did I mention that I owned and operated five franchise units?

If I had clearly understood the implications and consequences that were looming on the horizon and if I was able to get my big ego out of the way and address things head on, maybe I could have survived. Maybe I could have at least implemented an exit strategy that would have, in some small way, paid back the loyalty and support of my employees, family and friends.

In the end, I may not have survived because it may very well have been too late when and if I finally took action and responsibility. But maybe I could have at least exited with some dignity. Also, I could have saved many innocent people a great deal of hardship, embarrassment, wasted effort and ill-spent resources if I did face reality. This includes my family, my employees and yes, my franchisor; all who believed in me.

Yes, it was a tremendous learning experience but not one I would bestow or wish on anyone. Now, all I can do is to offer my experience to anyone in the franchise industry that needs assistance. As we [prepare to enter 2012] in the realms of economic uncertainty, I’m certain already difficult situations have been compounded but I’m confident a snap back to reality could only help. If just one franchise business is saved from the consequences of failure, then we’ve made progress. Progress we’ll continue to build upon.

Improving Local Brand Awareness AND Driving Sales & Profitability for Franchisees!

Individuals on the buying side of a transaction in today’s business environment are more diligent and cautious than ever before. Not only are these individuals consumers, but they are also business owners, executives, and basically anyone making a purchase for personal or business use. Taking this a step further, although a decision to offer credit is not considered to be a buy / sell transaction, today’s credit providers are also exercising caution and diligence at higher levels than in the past. So, what does this mean for today’s franchisees?

Considering that people buy from people, and people do business with people, the personal aspect is paramount to establishing a relationship that evolves thru to the transaction, and many times, repeat transactions. But, who has the time to network and afford people the opportunity to learn about them and their experience? Well, the answer is, “not many”, as they also have businesses to operate and manage, and time is limited. The key, then, is to brand ones’ self in a way to create a personal platform whereby franchisees, the business owners, will be searchable by the diligent and cautious parties that want to learn more about the person behind the local business before deciding whether or not doing business with them makes sense, and is in line with their own objectives, and possibly, values.

Typically, franchisees are hesitant, reluctant and frightened to network. Even in their communities. Basically, they don’t know where to start or even know what to say beyond, “I’m a such and such franchisee, and we sell this and that.” Therefore, franchisees work hard in the business by working long hours behind the counter, serving customers and interacting with employees; both important to the business but not to the growth of the business. Or, they do the opposite and check-in at some point, pick up the deposits and then do something completely unrelated to the business. Again, things may be in order but the business remains status quo. Does this all sound familiar?

Personal Branding for Franchisees, developed specifically for retail and service B2C and B2B franchises, can change how franchisees are perceived by consumers and others desiring to do business with them. It will improve franchisees’ confidence in going main-stream into the local community. It will create a platform whereby franchisees would be perceived to be on a similar level as executives of larger businesses and corporations. It will provide franchisees with the motivation to expand his or her reach into the local business community. It will present franchisees as experts in their field and in business in general. It will open communications at various business levels potentially exposing franchisees to strategic alliances, future employees and key contracts. Ultimately, it will help improve local brand awareness and drive sales and profitability.

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Facts, not Fiction, Lead to Franchise Success

The following is an article submitted by Guest Author, Katryn Harris. Katryn is the CEO of Open Box, a company focused on helping franchisors use technology to build their franchises. She brings her background in management, business strategy and communication as well as her team of technical experts to work with franchisors, ensuring that their technology fits their business strategy and moves their franchises forward. Be sure to check out Katryn’s blog.

Feedback Loops and Franchise Success
By Katryn Harris

A few days ago, I was talking with Greg Nathan from the Franchise Relationships Institute about his software product that helps franchisors select franchisees who are the most likely to succeed.

In brief, the Franchise Relationship Institute does this by benchmarking characteristics & traits of past successful franchisees and then providing a system that compares new applicants with those traits and characteristics.

Greg is a trained psychologist and works strong in the scientific tradition; hypothesize, measure, analyze and then compare results with hypotheses. One of his current projects is the validation of the exact extent to which is product is successful in predicting new franchisee success and, not surprisingly, his results will be fact based & very precise.

Listening to Greg talk about the validation project, I was struck again by how vital these feedback loops are to franchise growth.

Successful franchises implement the best programs and systems they can come up with, but then they measure, analyze and adjust based on the numbers and results (rather than what they ‘think’ is happening). And the faster they can complete this cycle (and then start it up again), the more likely they are to be successful in the long term.

From 1-800-GOT-JUNK?’s Net Promoter measurement tool to calculation tools for attrition rates to sales performance indicators, business growth is fueled by knowing exactly what is actually happen so the best actions can be taken. One of our customers ties client satisfaction records into payroll bonuses for their employees, which is a great motivator to get everyone in the company on board in trying their hardest to keep the clients happy – you can imagine what that has done for their referral and return customer rates.

What are your best scientific tools to create feedback loops and do more of what is working & change what isn’t?


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