Where do I start?

Bert Cotte, National Franchising Manager, McDonald's Australia

I recently met Lisa Chelsom at the Franchise and Business Opportunities Expo in Brisbane. Lisa currently has one site, where she operates her beauty concept – Skin Naturelle. Her goal is to initially bring on board three franchisees in the next six months. Looking out to the
horizon, she’d like to see Skin Naturelle grow to a network of 150 franchisees across Australia and establish the Skin Naturelle School of Beauty in each state.

Franchising is an exciting way to grow your business and your brand quickly, but it’s not an easy journey. Setting up those first few new sites and the franchisees that operate them, is likely to be one of the most challenging times she will face. Lisa has a few questions that she’d like some advice on to help her avoid some of the common pitfalls, and bring her business growth ambitions to life as smoothly, and as quickly as possible.

What should I look for in potential franchisees? Is it attitude, previous business skills or any other areas to qualify the applications?

There are a multitude of competencies and attributes that I look for when recruiting franchisees for the McDonald’s system. After all, it’s a 20 year opportunity, so it’s crucial to get a good fit for the organisation to set us up for a mutually beneficial relationship. Missing the mark in the selection stage, can set you up for a lot of long term pain. It’s that 80/20 rule. You could find yourself spending 80 per cent of your time on 20 per cent of your franchisees for all the wrong reasons.

A strategic approach, high energy levels, strong levels of accountability, and appreciation of the need for compliance, an understanding of the numbers that make a difference, coupled with a people and customer focus are all important. In franchising, the critical factor is bringing these elements together, with a good culture fit. For me, a good culture fit wins over industry experience. Every business has its own culture. What is culture? It’s just the way you do things all the time. The key question is how well the new franchisee will do things the way the business needs them to be done, with passion. When a way of doing things is embedded in your culture, minimal effort is required to execute in that way.

I’ve just received some inquiries from the Expo. Once I’ve completed an initial screen of a franchisee application, what’s the most important part of the interview process?

The McDonald’s franchisee selection process involves working in one of our restaurants for a weekend – the busiest trading days. I mentioned culture fit earlier. Train your applicant in a basic function, and get them to interact with your customers under your observation. You get an opportunity to see them in action, and they get a hands-on view of what they are getting themselves into. This would be a few steps down the track in your selection process, to ensure that you are pretty sure that the applicant is a reasonable fit. Naturally, select some tasks that have a low risk of impacting a customer.

I can imagine that beauty treatments need a very personal approach, and some tasks require extensive training. Perhaps have the potential franchisee assist in preparing the room for the treatment, and welcoming the client. Watch them real-time, and see how well they fit in. Look out for their levels of initiative when the opportunity to take action arises.

McDonald’s is a huge franchise system, and ultimately one of the most successful systems. What marketing advice would you give a small franchise getting off the ground?

When developing your marketing strategy, understand what your core products and services are, and continue to remind the public that this is what you do well. Supplement this with a regular stream of new offerings. People love seeing new things, and old things in new ways.

Once you have your franchisees operating, how do you keep them motivated?

The word I would use is “engaged”. Franchisees should be self-starters that keep themselves motivated by a passion for the business and its financial rewards. Keeping them engaged in driving the business in the same direction as your vision is the key. Communicate frequently to your franchisees your vision and key focuses. Over-communication is OK here. Be clear on what you need from them, reinforce excellent performance and support them with addressing issues.

What types of questions should a fairly new franchisor keep in mind when putting together a business growth plan?

1. I’ve seen some business plans that were 60 pages long, that didn’t paint a clear picture to me of where the business was headed, and the steps they were going to take to get there. Keep it as simple and concise as possible.

2. The big broad statements are important to set the vision for the business. Make sure the vision is coupled with some clarity on what actions are required every day to achieve your goals. I once heard a definition of leadership that continues to resonate with me. Leadership is about making the complex, simple. It’s then about making the simple, compelling! Will the team you have working with you understand how they will help you achieve your goals through each task they perform each day, with every customer that they interact with?

3. Know your competition, and what your point of difference is. Spell out how you will leverage your point of difference.

4. Share it! Share your business plan with your team. Engage a few key advisors, and take them through your plan. Firstly, they can sanity check your ideas. Secondly, just explaining something out loud to someone else can either make it crystal clear in your own head, or lead you rethink it.

It’s extremely exciting to see a business in a growth phase. Lisa has taken some wise steps to guide her, in engaging a business mentor and seeking advice from anyone who’ll listen. The next step is documenting this vision in a business plan. For Lisa, or anyone in business, it’s crucial to collect your vision, coupled with the key steps to achieving goals in the form of a business plan. A business plan does not need to be lengthy or printed on glossy pages. It simply needs to capture your key actions, and some clear ways that you will
measure success. The key pitfall that I’ve seen in several businesses, is developing a flash looking business plan, showing it a few people, then filing it away in the bottom drawer until the next planning meeting. It has to evolve, and be a living document. Do you have a good business plan in place to keep yourself on track to achieve your goals?

Bert Cotte is the National Franchising Manager of McDonald’s Australia. Having previously worked with other franchisors in various roles, he brings to the table a wealth of experience in franchising.

McDonald’s has grown to more than 850 restaurants in Australia, with almost 80 per cent of them owned and operated by franchisees. At the heart of McDonald’s success, are its franchisees’ and their strong commitment to the business locally.

If you are interested in finding out more about franchising at McDonald’s visit:
Web: www.mcdonalds.com.au/franchisingopportunities