Page 135 - Entrepreneur - USA (January - February 2020)

RAY KROC ONCE SAID of his McDonald’s franchisees, “My best ideas Those top-performing franchisees can also hold the key to
came from my franchisees. Why? Because my franchisees were expanding a system’s footprint—and to do that, they need to
talking to my customers every day, and some of them were listen- feel particularly supported. For many business owners, the big-
ing to what they have to say.” gest step they ever take is not when they first open for business.
Kroc knew that the way to succeed in fran- Instead, it’s when they grow from their first
chising was to make his franchisees success- unit (where they can oversee the business
ful. Top franchisees, on paper, require less directly) and open their second.
support than other franchise owners in their For many business This leap will require franchisees to under-
system. That may lead a franchisor to visit owners, the biggest stand that they are going to take a step back-
their locations less frequently and shift sup- step they ever take ward—hiring and training a manager to
port resources toward franchisees who are is not when they replace them in the first location, incurring
struggling. first open. It’s when additional cost—so that they can eventually
It might sound like a sensible instinct, they grow from take two steps forward when they open their
but it’s a mistake to neglect top franchisees. their first unit and second location. Franchisors can help them
The highest-performing franchisees are also open their second. recognize the trade-off. Yes, they may sacri-
paying more royalties and advertising fund fice short-term profitability, and perhaps will
contributions, and because they’re strong need to put off buying that new house, car, or
operators, it’s likely they have the potential to boat. But in the long run, the franchisee will be
continue growing their business. If their franchise generated building something more substantial that can run without their
$1.5 million last year, the franchisor should help them grow the day-to-day involvement.
business to $1.6 million and beyond next year. They may need a But for now, they’ll need to make a commitment to training.
different kind of support than other franchisees, but they don’t They’ll need to secure additional financing. And they’ll need to
need less of it. understand that their own skill set will need to grow and evolve