Why Franchising Needs To Be "Profile-Based"

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®Profiling. Strategy. Results.

How do you really know if someone is a good fit

for your business and franchise model?

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Using A “Profile Based” Strategy to

Grow Your Franchise System

Craig SlavinPresident/Founder

Franchise Navigator Business Navigator, Franchise Central,

Franchise Architects and ConnectMe

Since 1980

Because franchising is all about people doing business with people!

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Every franchisor has questions that need to be addressed:

1. What specific skills do you require of your franchisees?

2. Do you know what differentiates your high performing franchisees from the rest?

3. Do you know the best profile for your franchise?

4. Do you know how to reach the right profile?

5. Are you using the right media/medium to reach this profile?

6. Are brokers sending you the right profile?

7. What percentage of your franchisee population are high performers? Mid? Poor?

8. Do you even care?

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We are going to address these six questions:

1. What does it mean to create an “ideal” franchisee profile?

2. Can you use a generic personality profiling tool? Are they

effective at predicting success as a business owner vs. an

employee?

3. Is it beneficial to benchmark existing franchisees?

4. How can a profile be used to recruit new franchisees?

5. Is a profile beneficial for training, support and relationship

purposes?

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OPERATIONS

MARKETING

and ADVERTISING

LEGAL

SALES and

CUSTOMER SERVICE

FINANCIAL

ORGANIZATIONAL

/HUMAN

RESOURCES

IT/INFORMATION

TECHNOLOGY

IMAGE, IDENTITY and

BRANDING

Assumption 1: Your Business Is Like An Eight Cylinder Engine

Franchise Architects Eight Cylinders

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What does it mean to create an “ideal” franchisee profile?

• Franchising is all about people doing business with people.

• Not all individuals are alike. Think of the vegetable section of the

grocery store.

• Their needs are different.

• Their skills are different.

• Their values are different.

• Just because they can afford to buy the airplane does not mean

they can pilot it!

• The “ideal” profile of a single-unit franchisee is very different

than that of a multi-unit franchisee.

• Investment criteria is not a profile.

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Question: Which skill and core competency is the most important for your franchisee to possess for operating your franchise?

Sales and Marketing

Customer Service

Skills

Business

Administration

and Management

Skills

Product/Technical

Skills

Answer: A franchisee should not be expected to be proficient at all three.

In fact, people who are good at all three do not buy franchises.

Every franchisor has to pick which one skill is the most critical!

1 2 3

Assumption 2: Your Business Requires Three Distinct Skills

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Most, if not all, existing “instruments” are designed for the

employer/employee relationship and employee screening.

Franchisees are not employees. They make decisions and live their

lives differently than employees do. Owning a business or a

franchise is completely different than working on a job.

Interpretations of the results, from these generic, employee-oriented

tools, is very subjective for business ownership purposes.

What needs to be measured for business ownership is very different

than selection of an employee. The instrument needs to be business

and franchise ownership specific.

Can you use a generic personality profiling instrument?

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Is it beneficial to benchmark existing franchisees?

• Understanding what you did in your past and how that affects your

future is critical.

• You could have a strong business model but if it is not sold to the

right person the performance will not produce the results you are

seeking.

• Most likely, every franchisor has High, Mid, and poor performers. Do

you know what differentiates the High performers from everyone else?

• Imperative to find out the “why” now so that you can focus

your efforts on making sure you recruit the right candidates.

• Having locations open then close decreases shareholder value.

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Benchmarking will show a very clear distinction between your High,

Mid, and Poor performers.

If you do not benchmark you would not have the “why” and most

likely would be making arbitrary changes to support, training, and

marketing strategies.

Benchmarking will enable decisions in marketing, support, and

training based on solid data.

Benchmarking will clearly show what differentiates why your High

performers do well and why your Mid and Poor performers do not.

Benchmarking and statistical analysis should be done by

Independent statisticians.


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This graph illustrates the average scores of one

company’s franchisee population.

The three bars indicate the Top, Mid and Poor Performing franchisees in the system.

Left Bar - Average Scores of Top Performers

Center Bar - Average Scores of Mid Performers

Right Bar – Average Scores of Poor Performers

0%

10%

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30%

40%

50%

60%

70%

80%

90%

100%

CONTRIBUTORASSOCIATORINFLUENCERACCOMPLISHER

74% 74%

70%72%

62% 63%

80%

74%

72%72%

68%

65%

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Food Service – Mid Sized Chain Service Business – Mid Sized Chain

For many years Franchisors would claim their distribution system performance

was always divided into thirds: 1/3 HIGH, 1/3 MID and 1/3 POOR performers.

We have scientifically proven this just is not true. It is a myth.

Here are documented results.


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How can a profile be used to recruit new franchisees?

There is not a “one-sized-fits-all” solution to franchise recruitment.

Each company has its own culture and operating model.

Each profile needs to be communicated in very different methods.

Some are motivated by income. Some are motivated by security,

Some are motivated by prestige. Some are motivated by what they

can contribute.

If you have a franchisee population comprised of differing profiles

there is no way your operations, training and field support personnel

can be trained fast enough on how to be a Psychologist and

communicate effectively with each franchisee. It is impossible!

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How can a profile be used to recruit new franchisees?

“ Once we knew who our target profile should be, we set out to refocus our

franchise sales materials and presentations to communicate directly with

this profile.”

“By profiling our existing franchisees and then creating a segmentation

model that defines High, Mid and Poor Performers, we were able to clearly

see who our audience members are and how to better communicate with

them.”

• If you know your profile you can tailor a step-by-step review of your

systems, culture, vision and market niche of your franchise offering.

• That includes the right marketing materials, with the right colors,

verbiage and messaging.

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Is a profile beneficial for training, support and

relationship purposes?

• Understanding your profile gives you:

• A better understanding of your candidates needs and learning style.

• The ability to identify the training and support required.

• The ability to structure the right level of support to fit the

profile of the franchisee based on their Skills, Values and Behavior.

• The ability and opportunity to design communications and training

programs to better communicate with your franchisees.

• The ability to know what works with one profile not with others.

•

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Why is this important to you?

• Utilizing a “profile” based strategy give you:

• The ability to target the right profile and not have a “generic’

recruitment strategy.

• The ability to be selective so you attract “like-minded” people who can

execute your business model.

• Selling a franchise is not an asset. There is no value to a franchise

agreement. There is, however, value in market share.

• The ability to create a sustainable Indirect Channel of Distribution.

• The ability to “own” markets and not fragment your own efforts.

•

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Financial

Resources

Skills, Values

and Behavior

Market/

Location

Business

Systems

Connectivity

How does this affect your franchising success?

Creates

Connectivity

amongst your

entire

organization

and distribution

system!

Why is this important to you?

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6th

CylinderObjective: Identify who can

execute your business model.

“The right Stuff.” Franchise Navigator

SkillsSales and

Marketing Skills

Business

Administration and

HR Management

Skills

Product/

Technical

Skills

1 2 3

Values

Behavior

Beliefs of a person or social group in which

they have an emotional investment. These are

an individual’s own core set of rules.

Behavior that is congruent to one’s values

Franchise Navigator quickly (less

than 10 minutes) and effectively

identifies and quantifies an

individual’s:

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The Four Behavioral Profiles

ACCOMPLISHER INFLUENCER ASSOCIATOR CONTRIBUTOR

Everyone has all four profiles. What the Franchise Navigator does is

identifies, instantly, which are the dominant and subordinate profiles.

FranchiseNavigator

LEADERSHIP AND DRIVE SALES/COMMUNICATION PEOPLE ATTRIBUTES LEADERSHIP ATTRIBUTES

Results appear in percentages

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ACCOMPLISHER

• Big Picture

• Can multi task

• Strong business skills

• Strong drive for

accomplishment

• Does not need accolades

Single and Multi Unit

Operators

INFLUENCER

• Narrow focus

• Cannot multi task

• Strong sales skills

• Needs instant

gratification

• Needs a lot of

accolades

Single Unit–

Area Territorial

ASSOCIATOR

• Broad focus

• Cannot multi task

• Has a need to belong

• Works with family and

close friends

• Needs a lot of

attention

• Wants routine

Single Unit–

Small Staff

CONTRIBUTOR

• Caring focus

• Can multi task

• Has a need to

contribute

• Wants a steady

business

• Loves to enrich others

Single and Multi Unit –

Larger Staff

LEADERSHIP AND DRIVE SALES/COMMUNICATION PEOPLE ATTRIBUTES LEADERSHIP ATTRIBUTES

FranchiseNavigator

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Behavioral Profiles – 3 MeasurementsOverviewStep 1:1

80%

65%

70%69%

1. Which profile is the DOMINANT 2. Which profiles are the SUBORDINANTS 3. Combinations

These scores are for illustrative purposes only!

The results appear within 2 seconds

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Result of Benchmarking – Results appear within 2 seconds

Step 1:1 Overview

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10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%These scores are for illustrative purposes only!

Our statisticians will create a statistically range based on your High Performers.

An individual’s results are then compared to the high and low ranges of your High performers.

These results appear within 2 seconds upon completion of the survey


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• Values are personal.

• Our actions and behavior point to what we really value, instead of

what we think we value.

• Values can change as experiences change.

• Often feelings are more accurate value indicators than thoughts.

• When faced with alternatives, our values determine our choices.

• Our values give a particular direction and consistency in our

behavior.

• Our values, attitudes and beliefs condition our perceptions.

Importance of ValuesFranchise Navigator

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Overview

Sales and Marketing Business Administration and

HR Management Product/Technical Skills

ASSOCIATOR

ACCOMPLISHER

INFLUENCER

CONTRIBUTOR

HIGH

MID

POOR

COMPETENCY

Skills

We know which skill(s)

each profile performs

best!

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ResultsUsing the Science of Franchise Navigator

• In 2000, based on performance we sorted the owners as high, mid and poor performers,

• Franchise Navigator helped attract candidates that matched the DNA of the top tier owners

(Sears immediately started rejecting approximately 33% of the candidates that they would

have selected in the past),

• According to Sears the results were amazing:

- Average store sales went from $1.2 - $1.8M in approximately 18 months

- Average ticket improved by $75 in Home Appliances

- Service contract ratio sold doubled

- Failure rate of stores went from 10% to 6.4% (35% improvement)

- This lead to a great deal less legal activity against their P & L –

- Saved Sears $3M - $4M each year in legal fees.

This chain of stores, which replaced their Catalog Stores, is now Sears Golden child!

Over 1000 stores delivering $2B in sales and Low to Mid double digit EBITDA

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Real gain was in store growth ---

(perspective owners called the

existing owners to see if they liked the

program, made enough money and

trusted the company),

Sears had much happier owners -

and the word of mouth helped

propel them to increasing store count

by 100 - 125 a year for 5 straight

years,

We had to do the same thing with their

DMs and RMs -- they were not used

to managing/coaching such a

strong owner base,

Sears started putting round pegs in round holes for the first time on a consistent

basis and the results spoke for themselves. We also created their recruitment tools.


http://www.wencelworldwide.com/clients/cs/sears/

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• “Average unit sales (AUV) increased by 38% in the first 18 months of

using Franchise Navigator.”

• “Our unit level store increases averaged 18% - 22% using Franchise

Navigator to select the right franchisees!”

• “36 % of all inbound candidates are disqualified because they don’t

resemble our High Performer Profile.”

• “People coming through training are definitely a higher caliber than

previously.”

• “Closing rates are much higher than ever before.”

• “Franchisee retention has now exceeded 95%.”

• “Franchise Navigator stopped the bleeding. New franchisees are now

opening more locations and faster than ever before.”


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Because franchising is all about people doing business with people

Thank you.

We trust we have demonstrated why creating the “ideal’

franchisee profile for your franchising efforts is so critical.

It is not about franchising.

It is about people doing business with people.

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250 Parkway Drive, Suite 150

Lincolnshire, Illinois 60069 USA

1-847-465-0111

www.franchisecentral.com

www.franchisearchitects.com

www.franchisenavigator.com

www.businessnavigatorsurvey.com

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Why Franchising Needs To Be "Profile-Based"