At last, Isabel (previous Isabel blogs are listed at the end of this article) is getting down to the nitty gritty about franchising, and the question she asked today was so important that I’m rushing to my blog to tell you about it.

Critical components of franchising

“I’m so glad you asked that question,” I told Isabel, “because it shows me that you are paying attention to what franchising is really all about, or at least you are noticing some critical components.”

So let’s get right to it: Franchisors are “specific” and “stringent” because they need to be, they should be, and they must be if they want to succeed as franchisors, which also means they want their franchisees to succeed.

Critics of franchising won’t like this

Now some critics would jump on that statement and eloquently and heatedly tell you that I’m wrong, that I’m just defending franchisors and franchising in general, and that franchisors are “specific” and “stringent” because they want to take your money and keep it after you fail without having to do battle in a courtroom.

God bless the critics: they keep us on our toes! Mostly they keep us thinking. Happily, on this point, they are wrong.

Willy nilly franchises do not succeed

In my 30-year career, working with more than 100 franchise companies, I’ve never seen a willy nilly franchise concept succeed. Furthermore, the franchisors with the greatest problems, and the weakest balance sheets, are most lenient with their franchisees.

Somehow, some way, some critics got the idea that franchising is a democracy, and that just because this is the United States of America, where freedom rings, you should be able to buy a franchise and do what you want with it.

Franchising, even in America, is not a democracy

Wrong!

Franchising is not a democracy and perhaps that’s the most important principle to understand about it. You cannot do things your way!

Period.

End of story.

It has nothing to do with freedom. Or rights. It’s business. It’s do-it-my-way or don’t-do-it-at-all business. And it’s protected by the United States of America, where freedom rings!

The franchisor sets the parameters

Fact is, if I create a franchise, so long as I don’t violate any laws of the land, I have the right to do it my way, and do it when I want, where I want, and with whom I want.

You don’t like that?

Not a problem for me. And not a problem for you, so long as you don’t buy my franchise! So long as I don’t allow you to buy my franchise.

Franchisors test the business and create a success system

However, if you’re going to join me as a franchisee, then I know how the business works best. I’ve tested it. I’ve improved it through the years. I’ve created a marketing plan, an operations plan, a sales plan, etc. I know what needs to be done, how much of it needs to be done, by whom and when, to make it all work.

I also know that if you deviate from any of my plans, it won’t work, or it won’t work as well. It won’t work for you and it won’t work for me.

Reasons why franchisors want franchising to succeed

As the franchisor, I want it to work. Why? Lots of reasons:

• I love money! And franchising is a great way for a franchisor to get fabulously wealthy.
• I love helping people. And in business, there’s no better means of doing so than to teach people how to succeed with a franchise.
• I’ve got a huge ego and I want the world to know me and my business. Fastest way to do that is via franchising.
• I want to change the world. There really are franchisors who are do-gooders.
• It’s a combination of all of the above!

At a minimum, I want it to work because if it stops working I’ve got to go do something else!

The goal is a satisfying and profitable business

And since all of this is important to me as a franchisor, I’m going to make sure that my franchisees do things my way, the way I know that’s necessary to build a satisfying and profitable business.

“Is that unreasonable?” I asked Isabel.

“No, but that doesn’t make me feel better about the franchise agreements that I’m reviewing,” she said.

“I understand,” I told her. “Let’s continue.” I really couldn’t do much about her feelings.

“You’ll wear this funny hat and this is what you’ll say to customers . . . “

As a franchisor, I’m going to be “specific” with franchisees:

• here’s when you must open the business
• here’s when you must close the business
• here’s where the business can be located
• here’s the list of items you can sell in the franchise
• here are the marketing materials you can use
• this is what you will say when you greet a customer
• here’s how you will dress every day in the business 
• . . . and so on

I’m specific not because I suffer from OCD (though I might, and what if I do?) but because I know this is how the business works! It’s how it works for me and how it will work for each of my franchisees.

Rigorously binding, exacting and constraining, that’s franchising

I’m going to be “stringent” as a franchisor for the same reasons that I’m going to be specific. Stringent as in “rigorously binding or exacting, compelling and constraining.”

“Can I interrupt?” asked Isabel.

“Of course you can. You’re the client!”

It’s so offensive, said Isabel

“What you just said, that binding, exacting, compelling crap, is what’s so offensive about franchising.”

“I understand,” I said. “And I agree. I don’t know that the word is ‘offensive’ but I understand. It’s controlling for sure, and most people, especially those who are entrepreneurial, don’t want to be controlled. But all I can tell you is that ‘stringent’ is absolutely necessary in franchising. In fact, if you find a franchisor that’s not stringent, run! That business is not going to work. Eventually it’s going to become a mish mash and not a franchise.”

Franchising thrives on uniformity

Remember, too, that a franchise stands for uniformity. If you go to McDonald’s, you know the drill, right down to how your food product of choice is going to taste! I haven’t eaten French Fries at McDonald’s for a year or more — I’m a McDonald’s patron only when my grandkids insist — but I remember how I love those French Fries. Haven’t had a chocolate milkshake at Burger King for several years (too fattening for me, I’m afraid) but I still crave one! I had a vanilla cone at Dairy Queen as recently as 72 hours ago, and if I get a chance, I’ll buy one again today, because I love that product (see My Secret Love Affair).

“What would happen, Isabel, if these products changed, or worse, what would happen if you visited your favorite franchise, but in this unit they did things their way?”

Different isn’t always satisfying

“You’d be disappointed if you didn’t get what you expected,” she said. ”I get the point, John.”  

“I’m glad, Izz. Because that’s why franchisors are specific and stringent. You can’t do things your way in a franchise. You’ve got to work the business the way the franchisor means it to be worked. That’s how you succeed in franchising.”

“But don’t some franchises fail?” Isabel asked.

Not all do it the franchisor’s way

“Absolutely,” I said. “And in the failures that I’ve seen, almost always they occurred because the franchisee didn’t follow the system and/or because the franchisor wasn’t specific and stringent. In other words, the franchisor let people do things their way. And that does not work.”

Isabel asked, “Should I expect every franchisor to be specific and stringent?”

“Yes,” I said. “But the keyword is ‘expect’. If you had asked, ‘Is every franchisor specific and stringent?’ I would have answered: Only the good franchisors!”

Only the good franchisors do it their way

You’ll find franchisors who are lenient, who do not invoke controls, who do not watch their franchisees, who do not train and follow up and support their franchisees — in fact, there are a lot of them! And some of them manage to succeed. Until there’s a crisis. Or until a group of franchisees decides to do battle with the franchisor — that franchisor is likely to lose because the franchisor permitted the franchisees to do things their way. They set the precedent for failure.

Is there a formula for success?

“Isabel, the best franchisors will tell you upfront that they have a formula for success and once they share it with you they will expect you to follow it to the T. If you have a problem with that — and many people do — do not buy a franchise.”

Isabel was uncharacteristically silent for a moment. Then she said, “You’ve given me a lot to think about, John. Thank you.”

“No, thank you, Isabel. You asked the perfect question, one that every franchise prospect needs to consider.”

Previous Isabel Blogs:

1. Is Franchising Indentured Servitude?
2. Figuring Out What You’ll Earn As A Franchisee Even When The Franchisor Doesn’t Tell You
3. Figuring OUt What You’ll Earn As A Franchisee Even When The Franchisor Doesn’t Tell You — Part II
4. The Franchisor Spelled It All Out And Isabel Was Furious! She Screamed: “Do They Think Franchisees Are Robots?”

Photo image by: fotographix.ca

I’m talking about Isabel. Crazy Isabel! She’s back. (Previous Isabel articles are posted at the end of this blog).

The franchisor spelled it all out

“Everything is in the franchisor’s favor!” she screamed, like she had just come through a nightmare.

“They tell you everything you have to do! It’s all spelled out: When you have to work. How much you have to work. How much you have to produce. What you have to wear. Where you can operate the business. What you can sell. How you can advertise. Who you can sell the business to . . . does it ever end?”

And the problem is?

I said nothing for a moment, giving the air time to clear.

Finally, I dared to speak.

“Do you really want it to end, Isabel?

“What?” she snapped.

No time to be sympathetic

I knew she expected me to be sympathetic — or at least hoped so. But come on. Really? We’re talking about franchising.

Business.

Money.

Risk.

This is serious stuff.

No one is forced to become a franchisee

“I said, ‘do you really want it to end?’” and I gave her no time to answer because, frankly, I didn’t care and I needed to make a point.

“Look, it’s called a franchise. It means: license. It means someone is going to license you to operate their business in a specific manner for a specific period of time, and possibly in a specific location. They’re going to license you the opportunity to use their brand, their trade dress, their marketing plan — you’re going to represent them, Isabel. And they have the right to tell you what you will and won’t do. Because they grant the license!”

You can always do it on your own

“But I want to be able to make decisions. . . .”

I cut her off.

“They know what’s needed to operate their business successfully. And if they don’t, then why are you talking to them? . . . We can assume, Isabel, that you don’t know how to operate their business successfully or — you’d go do it! . . . You can’t! Or you won’t! Or you don’t want to!

This isn’t about your right to make decisions

“Meanwhile, they don’t want to license people who are going to make decisions and take the chance those decisions will turn into costly mistakes . . . and then into failures. They don’t want failures . . . they want successes, and it’s a huge challenge for them to find people who will be successful — even when they have spelled it all out for them!”

I paused even though I didn’t want to. But I remembered that Isabel is the client and while I can get as excited as she can get about these issues, I didn’t want her to think that I was a raving nutcase, simply spewing franchisor gunk.

Why do you want to make decisions?

“Do I get to make any decisions as a franchisee?” she asked.

“Izz,” I started again, calmly this time, “do you really want to make decisions? Is that your goal? To make decisions?”

“No, of course not. My goal is to be a successful franchisee, operating a business that I find — in your words — both satisfying and profitable.”

Better that the franchisor make all the decisions for you

“Very good,” I said. “You’re a terrific student. So why are you hung up on making decisions? In fact, why aren’t you looking for the franchisor to make all the important decisions for you, assuring you of your success?”

“Because I don’t want to be a robot. I want to participate in the business. I want to make it mine,” she said, starting to get excited again.

Review basic franchise facts again

“I don’t want you to be a robot, either. Neither does the franchisor. But Isabel, let’s just get down to the basics. You don’t know how to build a satisfying and profitable business — at least not the type of business that you’re looking for. Is that fair to say?”

“Yes, that’s fair. If I knew how, I’d go do it on my own,” she said.

The franchisor invents the wheel

“Very good. . . . Meanwhile, there’s a franchisor who has figured it out, or at least claims to have figured it out. They’ve already built the business. They’ve made mistakes. They’ve lost money. They’ve invented the wheel. They’ve recruited and trained franchisees, some of whom are doing very well. So far so good?”

“Yes,” she said, “that’s all true. I think they’re a good franchisor, too. I like them.”

The franchisee spins the wheel

“And I bet they love their business. In fact, they love it so much that they want to protect it. They don’t want to trash it. They don’t want start-ups that quickly fizzle into failures. They want franchisees who will succeed. And they’ve learned that they need to spell it out, they need to teach and train and support the franchisees and show them what to do, when to do it, who to do it with, etc., in order for the franchisees to succeed.”

“I get it,” she said. “But it seems so oppressive.”

Success or oppression?

“Well, it may be. But if it’s also successful, you may be able to live with the oppression, if it’s really oppressive, and I don’t know that it is. The most successful franchisees I know never tell me that they feel oppressed! But they do feel grateful that the franchisor figured it all out for them, made and paid for the mistakes in advance of them, and gave them a Cheat Sheet, so to speak, that helped them make good decisions — the decisions that eventually led to their success and satisfaction.”

Suddenly it was quiet again. Isabel was letting it sink in.

Are they all like this?

“Are all franchise agreements like this?” she asked. “Do they all spell out what the franchisee must do?”

“Only the good ones,” I told her. “I would not encourage you to buy a franchise if they only gave you part of the formula for success. . . . And again, Izz, I’ve got to go back to this point: Maybe it’s not for you. Maybe you don’t really want to be a franchisee as much as you want to be a business owner who makes her own decisions, win or lose. That’s what you need to think about. . . .

Reasons why you should buy a franchise

“I thought we had covered that ground — the fact that a franchisor has the absolute right to decide what franchisees will do, when and with whom, and all the rest of it . . . and the franchisee’s job is to listen and respond and follow — never to re-invent the wheel. . . . If you think you can’t do that, or don’t want to do that, if you think that turns you into a robot, if it’s oppression, for cryin’ out loud, then do not buy a franchise.”

“I understand,” she said. “I do want to be a franchisee. I realize I don’t have the answers and I don’t have enough money to make costly mistakes.”

Only the franchisor’s reality counts

“But you may not be willing to trade off your reality for the franchisor’s reality. And Isabel,” I concluded, “the franchisor’s reality is the only reality that counts in franchising. Think about it . . . and we’ll talk again . . . if you’re still willing.”

“Of course I am,” she said. “You don’t scare me!”

For More Franchising With Isabel Blogs, Read:

Is Franchising Indentured Servitude?

Figuring Out What You’ll Earn As A Franchisee Even When The Franchisor Doesn’t Tell You

Figuring Out What You’ll Earn As A Franchisee Even When The Franchisor Doesn’t Tell You — Part II

Photo image by: striatic