Franchising & You

by Ann Andrews

last updated 30/03/2020

Ann Andrews is a former franchisor and a writer, speaker and consultant on human resource issues. Her book My Dear Franchisee was first published in 2006 and has just been updated. The above extract was edited, with permission, for Franchise New Zealand's summer 2020 issue.

My Dear Franchisees

by Ann Andrews

last updated 30/03/2020

Ann Andrews is a former franchisor and a writer, speaker and consultant on human resource issues. Her book My Dear Franchisee was first published in 2006 and has just been updated. The above extract was edited, with permission, for Franchise New Zealand's summer 2020 issue.

In this extract from her recently re-published book, Ann Andrews writes a letter to help new franchisees know what to expect

My Dear Franchisees is now in its second edition

Dear Franchisee

Welcome to your new business. You have chosen this franchise because of its potential, and we have also chosen you because of your abilities. If you are committed and apply the principles and systems you learned in training, you will achieve your goals. I wish you every success.

We are embarking on a journey together which will last for years. Experience suggests that it will be by turns hilarious, frustrating, infuriating, rewarding, hard work and simple. All these things are perfectly normal in the franchise relationship. By writing this letter, I hope to help us both focus on creating the business you desire. 

Why you bought this franchise

In one of our very first conversations, I would have asked you why you wanted to buy a franchise rather than setting up a business of your own. In my experience, the reasons people have given for wanting to buy into my franchise are:

- I’ve always wanted to set up my own training business but don’t have the capital/know-how/courage.

- I’ve been a manager of teams and always enjoyed the teambuilding aspects of that job.

- I want to get away from the dreary nine-to-five routine of a job.

- I want to get away from the endless changes of boss I’ve had over the last few years.

- I want to take charge of my own destiny. I survived the last round of redundancies, but I may not survive the next.

- I’m bored out of my brain with my current profession and want to do something completely different.

- I’m getting to an age where I have outgrown the corporate environment, I’m sick of the politics and the game playing.

- I’ve gone as far as I can in the corporate world and don’t want to spend the next 10–15 years stagnating.

What you need to learn

Most people perceive that buying a franchise is a safe way of moving away from the world of ‘job’ and into their own business – and so it can be. A franchise is usually a proven system and so won’t have the same risks or start-up costs, or take quite as long as going it alone in a brand new start-up business. A franchisor will have developed their system over many years and will now be confident that not only does it work, but it is sufficiently refined and simplified that it can easily be taught.

The challenge for me as your franchisor is that because you may have come straight from a job, you may have little understanding of what being a business owner entails, and little or no experience of:

- Setting up a business for yourself: what that costs and the time it will take.

- How to deal with financial planning, and the need to set and stick to a budget. 

- How to manage cashflow over the quiet periods. The days of the monthly salary appearing in your bank account are now over. Quiet periods are great for days at the beach with the family, but not so great if you haven’t factored them in for paying your mortgage and feeding your family.

- The need to have a finger on the pulse of cash flow and credit control, and the skills to deal with slow payers yet still retain them as future clients.

- The need to have a strategic plan of your own, not just the one the franchisor has. In other words, where do you want your business to be in five years?

I once spoke at a conference where the franchisor told me, ‘Unfortunately people often buy into a franchise for the wrong reasons — some think they’ve bought a job and act accordingly. They forget that they have actually bought their own business.’

He wanted me to remind them that it’s no use sitting behind a counter in a retail business and waiting for customers to come to you, you have to get out there and hustle. In a service franchise, it’s no use sitting at home waiting for the phone to ring if you haven’t let people know what you are doing and how you can help them.

What you need to understand

I need you to understand that I am a working franchisor. I know you probably think I am a multi-millionaire, given that you have just paid me x thousand dollars to join my business. But I am not. I sincerely hope to be one day, but right now I am possibly not much better off than you because I plough virtually every cent that I personally earn, plus everything you pay me, right back into this business so we can all succeed in the long term.

I need you to let me know if you need something. I know I look really intelligent; unfortunately my mind-reading gene got lost in the post. If you don’t tell me you’re stuck, struggling or out of your depth, I won’t know and I’ll assume you’re OK.

I need you to give me time to do things for you. You may decide that you want something. Just pause for a moment and think about what it’s likely to cost, and how much time it’s likely to take; because what is desirable may not be affordable (yet).

I will do everything within my powers for you, but I have deadlines and budgets of my own, and these will impact on the greater organisation, so I may have to add your requests to my own to-do list. I will, however, give you a time frame as to when I should be able to get back to you.

What have you really bought?

I know you think you have bought your own business and, to a degree, you have. However, a franchise is slightly different from owning your absolute own business, because what you have actually bought is the right to use a system created by someone else (the franchisor).

I promise you, this will frustrate the hell out of you sometimes! Fortunately, you’ve bought a system that has been tested and proven. I’m not saying it can’t be improved; in fact I want every one of my franchisees to be considering ways that we can improve.

However, in the first 12 months of buying into the franchise especially, I need you to follow the system to the letter. Why? Firstly, because it works! Secondly, if you get caught up in trying to change things, it will take your time to do that, which in turn will take you away from sales and marketing, leading very quickly to a lack of income for you. 

What I can do and what I can’t

I can give you all the advice in the world; what I can’t do is force you to take that advice. If you choose not to take advice, then you must accept responsibility for that.

I can give you all the help in the world in setting up your business, but I can’t actually do it for you.

I can help when you make mistakes, but if you don’t let me know you are having problems, I can’t help. I promise I will not see it as a sign of weakness or failure. I will actually see it as your courage to admit you don’t know everything, along with your professionalism in asking before you make a mistake with a client. In particular, I will see it as your trust in me as your coach and mentor.

I can show you the steps to take to achieve something. What I can’t do, especially if you choose not to follow those steps, is guarantee you will get the desired outcome.

What I will do for you and what I won’t do

I take 100 percent responsibility for the system; I have used it thousands of times and it works. What I won’t do is let you go off on tangents and risk not only your business, but mine and the other franchisees.

I will support you 100 percent in creating a successful business; what I won’t do is sit back and say nothing if I think you are setting yourself, or the franchise, up for failure.

And I’m sure that if you think about it, you wouldn’t want me to run that risk either.

Ann Andrews is a former franchisor and a writer, speaker and consultant on human resource issues. Her book My Dear Franchisee was first published in 2006 and has just been updated. The above extract was edited, with permission, for Franchise New Zealand's summer 2020 issue.

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