NFIB

Oh So Good
08/ 12/ 2002

by Doug McPherson

The most mouth-watering word for Jim Morrissey at Krispy Kreme is brand.

"Today, I think brand is the most important aspect of getting into a franchise," says Morrissey, an area developer for doughnut-maker Krispy Kreme (www.krispykreme.com) in Tempe, Ariz. "You can spend literally decades trying to build a brand or you can buy into one. That's not to say there aren't opportunities out there for new companies, but it can take a lot of money and time to build a brand like Krispy Kreme. You're already rounding third when you have a brand."

Morrissey, who has experience with five franchises including KFC and Godfathers Pizza, says after brand, the people are next. "You have to be comfortable with the people running the show," he says. "Franchising is always a parent-child relationship and the franchisee is the child. You have to understand that or things can get out of balance."

He also says employee development is important and employees need to appreciate the "culture of the franchise."

"I think it's key, too, to do your best to get the work done through employees the way you'd do the job yourself," he says. "That can take time and sometimes you can be sorely disappointed, but you can also be pleasantly pleased."

After people, Morrissey recommends looking closely at the numbers that a franchise states you can generate. "You need to research the franchise and feel comfortable about its claims. Talk to other franchisees and check with the U.S. government; it prints information on franchises."

The key to cleaning up in the franchise business is communication, according to Don Sifer at Merry Maids.

"Stay in touch and develop good communication with the headquarters," says Sifer, vice president of market development for Merry Maids (www.merrymaids.com) in Memphis, Tenn. "If you don't rely on the headquarters you won't get your money's worth. It doesn't make sense to cut yourself off from what the headquarters can offer."

Sifer also believes that franchisees need to follow the system that's in place at a franchise. It's been proven to work and can keep you from making unnecessary mistakes.

Both Sifer and Morrissey warn against trying to grow too quickly. "Even if you're part of a successful franchise, if you don't watch the books you can grow too fast and end up with cash flow problems," says Morrissey.

Sifer says another piece of advice is to "constantly take the pulse of the customers."

"Franchisees are often face-to-face with customers and that's where they need to be," he says. "You can hear for yourself what they're saying. It's vital to success."

For a franchise to deliver success to its owner, the word to remember for Stuart Mathis is system.

"Franchises are built on systems that have been researched and proven to work, that's why franchises have a higher rate of success than other start-ups," says Mathis, executive vice president of Mail Boxes Etc. (www.mbe.com) in San Diego, Calif. "And your chances of success will be higher if you learn the system and you follow it closely."

Mathis says those looking at buying a franchise also need to do their research up front before signing on the dotted line.

"Franchisees often don't realize the time or money commitment it takes to make a franchise successful," he says.

Finding out all you can before you jump can eliminate misperceptions about how much time and money it will take."

To uncover franchise information, Mathis says check out the Internet and government reports and talk with franchise owners. "Do your homework," he says.

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This article originally appeared in the August/September 2002 issue of MyBusiness magazine.

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