Franchising 101 For Restaurants

We continue to see the impact of e-commerce on the Metro New York retail community. Many believe that this will create opportunity for restaurant operators to expand their businesses via franchising.

We asked one of the nation’s foremost franchising experts, Franchise Marketing Systems co-founder Chris Conner, for his perspective.

Can you share a little about your background?

My background has been pretty centrally focused in franchise development for about 17 years. I’ve worked as a consultant representing brands to help them transition from corporate owned entities to franchised businesses. 

In my humble opinion, I’m fortunate to have one of the best jobs on the planet working with entrepreneurs who have great vision and dreams for how they can bring value to the market, it’s fun, inspiring and always an opportunity to learn.

How did you get into the franchise business?

I had the good fortune to have a good friend I grew up with in the Chicago suburbs whose grandfather had started a franchise development firm.  He had franchised a variety of different brands and I went to work for him as a low level analyst and really didn’t have much of an expectation other than a better paying job opportunity. 

Once I had the opportunity to work with entrepreneurs was when it clicked that I had passion for the business. The reality is that I really enjoy franchising, but I LOVE working with entrepreneurs.  Again, in my humble opinion, entrepreneurs put more on the line than anyone, rarely get the recognition for their efforts and typically contribute the most to our economy. They drive growth, innovation and job creation and I really found passion supporting and working with those entrepreneurs.

You have had the opportunity to guide a number of companies successfully through the franchising process. What are the common characteristics of those that succeed?

The successful franchises have some common traits, which can be somewhat logical in that they have strong financial models, a good prototype business and a big consumer market, which they serve. Ultimately, a franchisee wants to see that they have the potential for a solid financial return and that the product or service they will sell in the franchise is going to be in high demand.  But what I’ve found in doing this for some time now is that there are intangible variables that play an even bigger role in the success of these systems. 

The vision and passion of the leadership behind the franchise plays an enormous role in how successful the brand is in a franchise development plan. It takes time, energy and consistent focus to roll these brands out effectively, the ones that work have a powerful engine driving them in the leadership that just doesn’t stop until the brand pushes into that point of critical mass.

How about those that fail?

The ones that don’t make it don’t have the characteristics mentioned for the successful brands. It usually can come down to two factors; first they don’t sell effectively and can’t communicate that value proposition to the prospective franchisees they market to.  Second, they don’t replicate success with the units they sell.  The franchisees brought into the system have to be successful and validate, if they don’t, the growth is hollow and not long term.

Why are restaurants and food such a popular category for successful franchising?

Food service and restaurants have and seem to always be the top category for franchises and sometimes it’s mind boggling how many people come rushing into the market to invest in food service franchises.  I think this can be connected to two key factors, one, the franchise market was essentially invented by brands in the food service category and certainly have brought the most exposure and notoriety to the franchise market segment, so people just associate franchises with food. Number two, everybody has to eat and with the right business system, menu and brand, food service can work in just about any market making it as scalable as it gets.

How has the process evolved since you came into the field?

The process for franchising has changed a lot in the time I’ve been in franchising, which is surprising to me. Digital has changed the franchise business significantly. Everyone is on the web. Franchise marketing has been completely changed with the incorporation of digital mediums. 

Franchise advertising happens in a big way online and a brand’s value is gauged by how that branding looks. This means that when a brand is going into franchising they need to embrace the web entirely in order to successfully scale.  Digital has also drastically impacted and changed the food service market; every food service brand is doing bigger and bigger volume online and offsite. This plays a role in franchising and how the model is duplicated.

How has the definition of branding evolved with the growth of social media?

Social media is an enormous part of branding, marketing and business development today, particularly in the food service business.  If you are like me, you didn’t pay much attention to the social media segment for a long time, but that’s changed in the last few years. Social media is a legitimate and necessary part of every business’ market strategy that needs attention, budget and focus.

Once you’ve determined the restaurant is ready to be franchised: How does the franchise marketing system make it happen?

The Franchise Marketing Systems model is to work closely with a brand from concept development to execution of the development model.  When we first started the business, we realized that most new franchisors were having difficulty in establishing their first 5-10 units and getting the validation they needed to get real momentum in scaling their brand. 

We start with the strategy and define processes needed to:

• Put the franchise model into action
• Work with great attorneys to get the FDD and Franchise Agreements in place
• Develop the training processes and operations manuals
• And then develop the marketing plans

The unique element to FMS is we then execute the model alongside the clients we work with to market, recruit and develop the initial sales.    

Please talk about your team and what makes FMS unique?   

The FMS approach to the market was to become a strategic partner with the brands we worked with.  The model started with Alan George and I seeing an opportunity to support businesses at the early stages of franchising. 

The market had great resources. But a gap existed. No businesses really supported the franchise development efforts for a brand looking to sell units 1-20.  Most times, these are the toughest to achieve for a new franchisor and the FMS value proposition was designed with this need in mind. FMS today has a team of 27 people who provide a wide range of services; all focused on helping brands become a sustainable franchise system.

What’s the next step for an operator that wants to utilize Franchise Marketing’s expertise?

Start with a call, we LOVE speaking with entrepreneurs. We want to have the opportunity to review the model, and discuss your vision. Then we can help provide objective advice on whether expansion could be a viable model. Visit the FMS website and book a call with one of our consultants.

Christopher Conner is the co-founder of Franchise Marketing Systems. He works with business owners to oversee and implement sales and marketing campaigns. This includes product, service, and business opportunity sales. Conner has been in the development arena for almost ten years. He has worked within a variety of different business segments and types of systems. His experience ranges from sales and marketing work to strategic planning and business development background. Conner currently focuses in the license sales segment of the industry.