Beauty, health and fitness fit into this category so well.
These are growth areas in business today and the latest franchise data shows that at least 9% of all franchise groups fall here and I think it is higher because some will fall into the general services or retail categories and not be picked up. Beauty for instance is not categorised separately.
This group is only going to expand.
The thing is the franchise model – well, most business models – often require their franchisees to both make sales, deliver the product, and sometimes handle complex tech too in one way or another.
This is how the traditional franchise model works in areas such as retail or the restaurant industry where you put business orientated people in as franchisees.
‘Simple’, most prospective health or fitness franchisors say when I first deal with them. ‘I can do it – so why can’t I find franchisees who can do it too?’
The thing is, in the caring industry, we are dealing with people
But generally, those of us great at delivering a caring service to wonderful customers are not so great at business, especially marketing and sales.
Try to force it to happen and experience tells me it will be difficult to find franchisees and, if you do, the result can be uncomfortable at best for both of you.
Mix it up
However, there is hope. But you must be flexible in your approach to business to make it all work.
What we have found is you need to:
Think about the characteristics of the person you want to deliver your product or service.
They must have the skill (or at least the ability to learn the skill) to do the jobAnd they must be able to deal with your customers in a caring and empathetic way – this is a caring industry after all, and people skills will be important if you want ongoing recommendations and testimonials. Think about the business tasks you want them to do.
- Hiring and firing and managing staff
- Managing the money in and out
- Local area marketing – what does this entail and is it crucial for the growth of the outlet?
- Daily administration tasks.
- Understand the basic personality profiles
It really helps to know how people have different personality characteristics. We are not all the same.
Gentle, risk averse, caring people good at listening and empathising generally don’t like to deal with conflict, directly asking for the sale, managing business admin and they won’t do it.
Drivers, good at strong networking, difficult business decisions are not often great at the communication style needed in these industries – they are not good at listening.
- Then work out how you are going to get the work done and where. In other words, what will the people delivering your product do and which tasks need to be taken away and done by a head office marketing and sales team for instance.
- And build your business around these decisions
- Remain flexible because as your business grows you may find you have to adjust the model you choose.
The business models
There are a number you can choose from.
- A company model using staff.
- A company model using contractors.
- The franchise model using franchisees.
We find most use some kind of hybrid.
Here are examples showing journeys and the final outcomes for a couple of our clients and one who is not.
The health example…
A nurse I know came to me wanting to franchise her specialist medical care clinic.
This a medical service that must be administered by someone medically trained at least to the level of a registered nurse so my nurse client thought everyone would be like her, good at delivering the job and managing the clinic (after all this is what all good hospital nurses do – look after patients and the admin).
It didn’t happen – not in the franchise model anyway. Our nurses are careful and don’t like risk and, at the end of the day, nurses were not prepared to take on the responsibility of running their own business.
The outcome today for that business is wonderful. My nurse and her business-orientated partner now have about 25 outlets across Australia, and we are introducing them to prospective JV partners overseas.
But they have grown the group in a company-based model, each outlet being managed by a staff member who is a registered nurse responsible for running the outlet in accordance with training, carefully crafted and accessible cloud-based procedures for both clinical practices and management, and a well-designed and executed support system.
Marketing, sales, financial control, and all other business matters sit at the head office level.
A massage therapy model…
At the same time, we were approached by a business person wanting to franchise her massage therapy business servicing mainly our nursing homes.
She knew she could not franchise the massage delivery. Massage therapists are gentle souls not interested in dealing with what they see as confrontation. All they wanted was to be given the address of the job so they could go and deliver the massage. Even asking for the next appointment was often too difficult.
A hybrid mix of contractors and casual staff was one solution that worked.
However, this left a huge deal of work for her at head office managing the money, marketing, sales and especially the negotiations with the nursing homes for significant contracts, and if she was to expand she needed to find a way to delegate these tasks.
The answer lay in creating franchised regional outlets, which had responsibility for managing:
- Local area marketing and sales
- Contracts with nursing homes
- Massage therapists
- Therapist job allocation and quality
- Their own business
The thing is my client was very clear she wanted this franchisee to also have massage experience, so they understood what it was all about.
It didn’t work because the massage requirement contradicted the business requirement and they had to put in business managers.
Today, they have a thriving business with regional offices run by business-orientated managers who could just as well be franchisees.
The pool example…
Finally, I must go back to Poolwerx’ hub & spoke model as an example of the most successful flexible model I know.
They have a mix of:
- Pool shops selling pool care product – These are franchised by business people managing all aspects of the business
- Mobile vans servicing pools – Some are owned by lone franchisees who can own multiple vans. Others are owned by the local Poolwerx shop who may also own multiple vans
- Nominated suppliers who deliver pool care product to the vans and shops
The moral of the story is – be aware of your people and how they are most successful at looking after your customers. Then build your business around their characteristics so they can be as successful as they can be at that job.
Brian Keen has been involved in the franchise industry for more than 30 years and Prue has been involved with systems and business for as long. Together they founded Franchise Simply, Systems2Grow and Microloan Foundation Australia. Brian’s on-the-ground business experience as a multi-unit franchisee, franchisor and consultant helping many of the big names create their own franchise systems and growth over the years combined with Prue’s structured approach has been fed into Franchise Simply, helping today’s SMEs and Franchisors grow their business by franchising.
www.franchisesimply.com.au | www.systems2grow.com