Franchise Businesses: Fast Growth vs Careful Growth
If you’re considering franchise ownership as a career option, you’re probably looking through directories of franchise businesses to identify potential opportunities. You’ll notice that many franchises tout themselves as ‘the fastest growing’. What does that really mean? And is it important to your success that you choose a fast-growing franchise?
In this post, we offer you our perspective as a ‘careful growth’ franchise system. We’re sharing this information not as a sales pitch – we award only a limited number of franchises each year — but to give you some things to think about that you might not otherwise consider as you evaluate franchise opportunities. First, we’ll offer a third-party perspective.
What the Survivors Share
Recently, well-known corporate and franchise attorney Ted Pearce wrote a must-read article for BlueMauMau.com, a straight-shooting information portal for franchisees (and potential franchisees). It’s titled, “Survival of the fittest: Why do some franchise systems succeed, others fail?”
In the article, Pearce said: “Franchise concepts come in all shapes and sizes. But systems that are “survivors” have common characteristics that set them apart from the rest. Among these are strong management with a strategic long-term view, a culture that is collaborative but still controlled by the franchisor, and an emphasis on system standards and training. In short, whether a franchise system is likely to last depends in large measure on how well it is operated.”
We’ve been in business since 1959 and franchising since 1973. But you’ll never find F-O-R-T-U-N-E Franchise Corp and its FPC brand (F-O-R-T-U-N-E Personnel Consultants) listed as the fastest growing executive recruiting franchise. Our deliberate, strategic choice has been to award franchises on the long term mutual merits, rather than as part of a short term sales goal.
The Thinking behind the Strategy
The market position we’ve always adhered to is to be the right size: large enough to have brand impact in our business arena; small enough to provide our franchise network the strong support that they need for success. We never want to overload our capabilities to run a strong system.
Here’s why we made this choice:
- Because we could. We’re a privately held, family-owned business and not beholden to investors clamoring for quarter-to-quarter franchise sales results. It’s important to know what drives business decision making in any franchise system you’re evaluating. Depending on the franchise concept, you might do better with a larger or publicly-held enterprise, but at least factor in how, if at all, the ownership entity could influence your success.
- Because we’re an executive recruiting company first, and a franchise company second. Our recruiting approach was successful for 14 years before we ever began franchising it. We understand recruiting inside out – as well as what it takes to succeed. This has made us successful as franchisors — from vetting potential franchisees to developing the strongest owner and recruiter training in our industry. By the way, we’d rather hang our hat on having the best training than the fastest growth any day of the week. Determine whether the franchise company has real expertise in the business you’re buying – or whether they’re just great marketers of a concept.
- Because we’re good enough business people to understand that our financial success will not come from up-front franchise fees, but from the long term success of our owners. In fact, we pretty much plow FFC franchise fees back into owner training and support. In essence, we invest in our owners as they invest in us. As an example of how this long term view succeeds, one of our owners is well into his second twenty-year franchise agreement. This speaks for itself.
Assessing Culture and Control
We agree with Mr. Pearce that a collaborative culture is essential to a strong franchise system. Our FPC owners are represented on a peer advisory board. They report from the front lines of our industry, provide feedback on corporate initiatives, share ideas for improving the system and otherwise offer the owner perspective. We factor their input into planning and decision-making. We can more readily address system issues with this strong communication. Before investing in a franchise system, find out whether you’ll have a voice in decisions that will impact your success.
In addition, be sure that you’re comfortable with the level of control a franchise company will have over how you operate your business. We have standards of operation, ethics and brand management that we require of our owners. However, they are free to set up and run their offices as they see fit. They can establish their own office culture and policies. We have found that this works very well for recruiting offices. Again, just be sure to understand whether standards established by the franchise company are for your benefit or theirs – and whether you personally prefer greater or lesser control from the corporate office.
There for You – Thick or Thin
Whether it’s training or marketing support, a strong system has to be there for its owners through thick and thin. We speak with many of our owners daily, regardless of how long they’ve been in the system. They ask us about all aspects of their businesses. We help them hire, we train their recruiters, we help them in the moment when they’re negotiating a placement. We help them generate and share leads through our Intranet and system-wide recruitment network. If we perceive that they’re struggling or if they need help with expansion plans, we’ll jump on a plane and spend time with them on-site.
The system is the most important aspect of our business. When the Great Recession struck we put every bit of attention into helping our owners get through it, to sustain the system for everyone’s benefit. We put franchise sales on the back burner as a result. We’ve now returned to our careful growth plan, confident that it will serve our system well for another 40 years.
Depending on your interests, it may be that a hot, fast-growing franchise is just the right thing for you. But it’s good to keep in mind that there other factors to consider in evaluating franchise businesses and choosing a solid franchise system. What have you been considering in vetting franchise opportunities?
If we stirred up some interest in what exactly our FPC recruiting franchise offices are all about, download our popular recorded webinar, “A Great Career Opportunity You May Never Have considered.”