Giuseppe Grammatico: Welcome to the Franchise Freedom Podcast. I’m your host Giuseppe Grammatico, your franchise guide, and today we have a very special guest. Today we have Mark Siebert from the iFranchise Group. Mark is the author of Franchise Your Business, the Guide of Employing the Greatest Growth Strategy Ever, and the Franchise Handbook, and has been a business consultant since 1985. Mark founded the iFranchise Group back in 1998 as an organization dedicated to developing long-term relationships with successful franchisor clientele. Mark has worked with hundreds of franchisors from startup operations to corporate giants. He’s an expert in evaluating companies for franchisability, structuring franchise offerings and developing franchise programs. The strategic planning recommendations developed by Mark have been instrumental in the growth and success of numerous national franchisors. So, Mark, very excited to have you today. And welcome to the Franchise Freedom Podcast. Mark: Well, thanks, Giuseppe. It’s nice to be here. Giuseppe: Awesome. So Mark, I always like to start out with, if you could just give our audience just a little bit of a background, you know, how you got into this business and started and what that journey looked like.
Mark’s Journey in Franchise Advisement
Mark: Well, thanks. Well, you know, when I got out of school, just as a kid, and this is going back 35 years ago, I wanted to work in a lot of different businesses. I wanted to do something where I was always being challenged and where I was always learning something and I thought that consulting would be the way to do that. And I found myself drawn in particular to small businesses, to businesses that were just launching and where there were things that were, you know, through the cutting edge oftentimes and where companies were sort of innovating and just sort of the beginning stage where they were really just starting to grow. And I found that franchising was a way to work with a lot of small businesses that were on the cusp of really explosive growth on my way into a job where I was just doing some consulting for those kinds of companies. And after about 15 years of working for that company, I ended up deciding to create a specialty company that did nothing but work with companies that wanted either to franchise or existing companies that were already franchising that wanted to find a way to do it better. And I’ve been doing it ever since. It’s been great to have a frankly, they have a business or a job, I guess, where you love coming to work every day because it’s so much fun. And I love what I do. Giuseppe: Absolutely. And from my experience, very few people can say that. And that is great. I mean, that’s what it’s all about. As far as your company goes, you had mentioned you work with existing, smaller existing franchise companies and people looking to franchise their business. Someone that may be interested in exploring that area, for example, I get calls specifically, I know when I launch my business people ask Well, I have a so and so restaurant or a retail store, I want to franchise or have become a franchise, would you be able to help individuals, you know, convert their current business into a franchise? Mark: I mean, that’s a large portion what we do is probably 60% what we do is helping companies in just that situation. Years ago I worked with Buffalo Wild Wings when they had not yet started franchising. We more recently worked with Massage Envy when they had one location that was open for three months. And they said, you know, we really want to grow fast and we want to grow through franchising. My partner was the president of Auntie Em’s Pretzels, and he grew them through franchising. When we started with them, they had six locations. I mean, we’ve worked with a number of startups that were very small locations when they started with us and they’ve had tremendous success. Not everybody has goals like that. We’ve worked with a lot of companies that have wanted to not get to 1000 locations but maybe get to 100 locations or 50 locations or whatever it was. But that is really dead center right in sort of the sweet spot of what we do is working with companies who, for one reason or another, usually time, people or money, want to grow their business through franchising. Giuseppe: That’s great. And I do get requests on occasion. So I would love to, you know, after the call, we can definitely share some names. So, one question I always ask is two people that approached me asking, you know, I would like to franchise my business. You know, I always ask the question, why? Obviously, going from one, you know, for example, one restaurant to a franchise, your roles are going to be completely different. You know, you may be the chef at the restaurant, but now you’re running a national franchise brand. So, what are some pieces of advice for that person that may be exploring it or has thought about franchising their business? What would you recommend? Maybe some recommendations or questions that they should be thinking about.
Recommendations For Aspiring Franchise Owners
Mark: Well, you know, I think that that first question that you asked is a great one. When you start by asking why, you know, just because you have a business model that is franchisable doesn’t mean that you should. Businesses are designed to meet your goals as a business owner and so you have to start by an examination with your goals are. And if you can reach your goals without having to grow aggressively then there’s no need to franchise. As I mentioned a second ago, people franchise one of three reasons, either because they perceive that there’s a market opportunity that they can’t meet because of time constraints. They can’t grow fast enough to meet the market opportunity. Second, is because they really are looking for highly motivated managers and it just can’t find enough of them fast enough. And the third is capital. You know, in a franchise environment, franchisees are typically responsible for the entire investment in the operating locations and the franchisor simply brings their intellectual property in terms of the brand and the know-how of how to run the business. And, you know, so those are the reasons why companies typically turn to franchising. It’s either time, people or money. There’s one of those three constraints, but it starts with the question of why. And, you know, why are you looking to grow your business? The second thing I think that is a real important issue for people to look at is the question of franchisability. And just because you want the franchise doesn’t mean that you’re a good candidate for franchising. And you pointed out one of the elements in your question, which was you’re changing roles. When you get into a franchise business for the first time, you are going from a business operator to someone who’s role instead of maybe making the food or maybe you’re running the location itself, your business is now selling franchises and providing training and support to franchisees and it’s a different role. So you might, now you’re going to have two different roles. You’re going to have one role as being the business owner but also a second role, owning a business that sells and services franchises. And you have to be prepared for that. And then from a franchisability standpoint, you have to make sure that your business model will support franchising. So, you know, you want to make sure that your business provides an adequate return to the franchisee. It has to be something that is going to be of interest from a saleability standpoint to prospective franchisees. That’s got to be something that you can readily duplicate from the standpoint of, you know, is it something where it takes a French chef to be able to replicate this or, you know, somebody with some unique set of skills or some unique kind of location. Maybe it’s not that duplicatable. And you have to make sure it’s something that will work in more than just your hometown or your home environment or with more than just you running it before you start trying to replicate this around the world. So there’s some questions you have to ask and one of the things we typically recommend and, you know, is start the process with an evaluation of franchisability. There’s a test on our website, which is ifranchisegroup.com and there’s a test of franchisability with 12 questions you want to ask yourself as to whether or not your business model actually is franchisable. And start with those questions. Is the business model itself franchisable? Giuseppe: Right, great point. Exactly. You know, can it be duplicated? And it has to be in line with what the owner is looking for as well, as you had mentioned. So with their goals, vision of the business. So when I, when people ask me, is franchising better or should I keep as is? I said there is no right or wrong, it’s based off of what you’re looking for. So yeah, I can help at a higher level but as far as the actual process, I know we have the same title, or use the same title of a franchise consultant, whereas I’m more of helping individuals find a franchise business where you’re actually consulting, doing direct consulting to the franchise companies. You know, you’re a great resource. Definitely going to share your website and your contact information in the show notes as well so I appreciate that. On the flip side, so on the other part of your business so, you know, I already have a franchise, things are going pretty well and I’m stuck. So kind of your second clientele, second customer, you know, what does that look like? So, you know, they are doing well as a franchise maybe they have 50, 20 units across the country. They’re kind of stuck. They’re looking to expand. What type of, you know, what type of help can you offer them and what should they prepare, you know, before that initial call with you?
When to Seek Assistance With Franchising
Mark: Well, I would say that the guys who are really doing well probably don’t need me and the people who were stuck are the guys who need me. And so a lot of times people get into franchising and they get into franchising and maybe they grow to their level of incompetence or maybe they find themselves having difficulties with quality control or they find themselves having difficulties with franchise lead generation. Or they have difficulties in closing or they, you know, closing the franchise sale or they have difficulties in terms of how to staff their organization or franchisee relations problems or problems in generating good PR or generating enough traffic to their website. So we provide a variety of services that are comparable to the services that are provided to a start-up but with really more of an approach that’s focused on trying to make sure that they’re implementing best practices as opposed to starting them from ground zero. So, for example, we have a franchise sales audit process for established franchisors where, if you have, are having difficulties with your franchise sales, we know that those difficulties come from one of the four primary areas. It’s either going to be a function of the concept itself, the franchise messaging that you are generating, franchise marketing in terms of where you’re generating your leads and how or the franchise sales process. And each one of those has different areas that you can dig down deep into to find out, Is it broken, or does it need to be tweaked a little bit? And usually, it’s not broken. It’s usually there’s some areas for improvement that could be tweaked a little bit to improve the performance. And in each one of those areas, we try and make sure that these people understand. For example, in your particular area where you’re acting as a franchise consultant, essentially acting as a consultant to franchisees, oftentimes franchisors, you know, they expect you to be able to generate leads for them. But they don’t interact with you frequently enough or they don’t provide you with the kind of information or tools that you need to be able to properly advise people on what’s a good opportunity. They don’t go to perhaps the shows that you would have, you know, at your, you know, your annual shows and that kind of thing. But, of course, if you’re not informed on what their concept is, it’s going to be harder for you to represent them to the prospective buyers that you find for them. So we try and make sure that they understand what things they can be doing to better improve their lead flow, to better improve their sales process, to better improve their messaging, to better improve, if there’s concept issues, the concept. And it’s basically a diagnostic process followed by recommendations for improvement. And we do that with quality control or with any just, you know, franchisee relations or organizational growth planning or things of that nature. So, but it’s usually it’s franchisors with a pretty specific problem that come to us and they say, we’re having some difficulties here, and can you help us? Giuseppe: Right. And you, I’m assuming, you offer an introductory call. I know we do that with each of our candidates, exploring franchise ownership. So if someone is not sure, they are a little bit stuck. They’re not sure which direction they want to move in, do you offer kind of a right fit, I call it a right fit introductory call? Mark: Yeah, sure. We’re with anybody who is thinking about franchising or anybody who has a franchise that they think might need to benefit from some tweaking or some adjustment, we absolutely would. We have a team of analysts who all they do is a first step is try and make sure that they are able to identify any issues and to try and help people find their way through whatever kind of problems that they may have. We may have two or three introductory calls like that, and, you know, with sort of escalating levels of need. And we don’t get to a point where we start building the client until we actually really drill down pretty deep into what that client’s particular needs are, and they’ve gotten to the point where we can provide some level of a solution. Giuseppe: Right, and that’s great. So essentially, what differentiates your company is you can handle essentially everything from A to Z. So it isn’t, you’re not just focusing on one area, you’re looking at the at the whole picture. Mark: Yeah, the one thing we don’t do is we don’t do legal documents, but we have relationships with all the top law firms that are out there. I think the one thing that you, that we really talk about that differentiates us, is that we really believe that we have the top team in all the franchising. And I think that if you, well I think we can prove it. Entrepreneur Magazine, which is independent of us entirely, does an annual survey of franchisors around the US and around the world and they did a survey of 500 plus franchisors and they asked those franchisors who is he best franchise consulting firm on the planet. And they came back with one answer and it was the iFranchise Group. So it’s not just our thing, it’s franchisors around the world are sitting there saying the best franchise consulting firm is iFranchise Group. Giuseppe: Yes, I can vouch for that. Mark: We don’t do the same thing. So I’m saying that as a franchise consulting firm who is not competing with you of course. Giuseppe: Correct. Yeah, same title, two different things. But yeah, I’m not sure why change as a franchise coach, I think we should change our title too. So one last question. This is, you touched on it, this is going back to the basics in our audience. We speak and we have guests, we have guests from all over the country, occasionally internationally. And we touch on franchising, but not all our guests are from the franchising world. So, instead of it just coming for me, you know, for the average listener, you know, we’re typically it’s a corporate executive looking to make a switch or potentially we’re getting quite a few inquiries of corporate executives looking to keep their job and have a franchise, semi-absentee franchise on the side. So to all the listeners what, you know, can you just talk on the, what you feel, being in the business for so many years, that the major benefit of franchising is? We’ll keep it kind of high level but just kind of maybe your three, four major points so that it’s not always coming for me. I like to always have a guest kind of give me their opinion as to the top three or four major benefits of franchising.
The Main Benefits of Franchising
Mark: Well, you know, I guess I’ve already spoken a little bit, you know, from the standpoint of the franchisor. From the standpoint of the franchisee, you know, the major benefit is that you’re getting a proven system. And you’re getting not only a proven system, but you’re getting the advice and the wisdom and the counsel of somebody who’s been there and done it. Somebody who has been down the path, who’s made the mistakes so that you don’t have to. When you think about the kind of mistakes that you could make as a startup getting into business for yourself, they could easily, easily far outstrip the cost of a franchise fee. You know, when you, if you were to get the wrong location or if you were to get the, you know, make a mistake in terms of where you should be doing your initial advertising or the kind of equipment that you should buy or the way that you should lay out something. Those kinds of mistakes are often not only game-changers, but they’re long-term fatal mistakes, that by avoiding them, that franchise fee can allow you to be successful as opposed to, you know, giving you a chance to fail. And likewise, the ongoing support that you receive from franchisors in terms of the buying power, the advertising strength, the knowledge of the marketplace, the ongoing research and development, the things that are being done that are industry-specific are oftentimes the difference between success and failure. Now there, you know, you still have to do your industry research, you still have to take a look at each particular franchise and it’s, there’s no guarantees of success, not in franchising, not in any business that you would ever get into. But I think that franchising allows you to reduce the risk and the risk-reward continuum, and gives you an opportunity to have somebody who is going to help you reduce that risk and being, you know, and be essentially a guide for you in the process of starting your business that you would otherwise potentially struggle with. And those struggles could ultimately be fatal without that guidance. Giuseppe: Right. I couldn’t agree more. And I’m glad we’re both saying the same thing. So there’s a minimum of, I always say, the two of us that are saying the same thing. So I do appreciate that. This has been great. I’m sure we can talk all day about franchising. It’s definitely a passion of mine and I love helping especially first-time business owners find their first franchise So typically, I’d ask your process. We went over that, so anything else you’d like to add before we finish up here? Mark: Well, you know, I guess what I would tell your listeners is that if they are interested, if they go to our website, which is again, ifranchisegroup.com, there are sample chapters of my book that they can download for free, whether or not their business is franchisable. There are tests on there about, they can take in terms of whether or not their business is franchisable. And if they, you know, send off some information to us would be happy to send them some information, including a free 90-minute video that is an educational video. Essentially that same question, you know, is your business franchisable. It’ll cover that, it will cover some of the legal definition or franchise, it will cover alternatives to franchising and it really is, you know, there’s, you know, I’ll admit there’s a little bit of promotional stuff at the beginning and at the end but if you skip past that stuff, there’s 90 solid minutes of just pure educational information in there that if you’re serious about franchising, do your homework, take a look at that and read the book and I think it will give them the kind of information that they need to make an informed decision. Giuseppe: Right. And people do need that. They, I know people have an idea, they start researching online and it just becomes overwhelming. And then they take note and then they say, Okay, well, what do I do with all this information? So it’s nice to have that guide or roadmap. Just even as you mentioned, the 12 simple questions to figure out if your business is franchisable is definitely a huge valuable asset for anyone to take a look at. So I will definitely put that in the show notes. So Mark’s website is ifranchisegroup.com. And Mark, I really appreciate your time and looking forward to catching up on another call. Mark: Thanks so much, Giuseppe. It was great being on your show.