FBR Issue 2 - 2018

FBR SPECIAL REPORT
Multi-Unit Franchisees
by the Numbers
67%
22%
male/female
10% partnerships
19% own 5 or more units
have a Bachelor’s
degree or higher
22% have an advanced degree*
20% have no college degree
1% did not graduate high school*
*(overlap with above)
33%
67%
83 %
would recommend
their franchise brand
to others
76 %
would
“do it again”
have been knowing what
an owner they know today.
for 10 years
or more 15% have been an
owner for less than two years
90 %
enjoy operating their business
“The relationship between the franchisor
and franchisee is essential for success,” says
Mark Crayne, a multi-unit Fazoli’s Restaurants
franchisee from Lubbock, TX.
“When both parties have a shared culture,
listen, and value the ideas of each other, there is
a greater potential for achieving a common goal.”
The abrupt Manning exit from Papa
John’s is a great example of just how fragile
the franchise relationship can sometimes be.
Papa John’s founder John Schnatter stepped
down as CEO in December, after he made
controversial comments regarding the NFL’s
handling of the anthem protests.
Schnatter’s comments kicked off a social
media barrage, with many calling for boycotts
of Papa John’s restaurants, and accusations
that the company is racist. Fast forward three
months…Manning exits as a franchisee just
days before the NFL officially dumped Papa
John’s as the official pizza of the NFL.
Clearly Manning and the NFL no longer
have a shared culture with Papa John’s.
HITCH YOUR WAGON
TO WINNING PEOPLE
Manning’s franchise experience holds a valuable
lesson for all of us: Do your homework and
be very careful to whom you hitch your wagon.
Understanding the business opportunity
and potential local market for the product or
service of a franchise is just step one. More
importantly, who are the people behind the
brand you are considering as an investment?
What are their beliefs, their values, and the
company culture? How do they approach the
franchise relationship? And most importantly,
what do their current (and former) franchisees
have to say about their experience?
While no brand or team is completely
immune to missteps, the very best franchise
companies have a long track record of doing
right by their franchisees.
“I would not have made this leap of faith
without knowing that the company andthe
people I was going to be partnering with were
trustworthy and supportive,” says Scooter’s
Coffee multi-unit franchise owner Ali Dreher.
“Scooter’s corporate has been amazing at their
training, support, and the time that they give
you as a franchise owner.”
Franchising is a people business. Before
you invest in any franchise opportunity, take
your time and really get to know the people
behind the brand. Most multi-unit franchise
agreements are 10–20 years long…longer than
many marriages. Be sure your values, as well
as your business interests, are aligned.
“The collaborative culture between franchisor
and franchisee at Fuzzy’s starts at the
top with Mel Knight,” says Tampa natives
and brothers Ian and Adam Lieberman, who
along with Adam’s wife J-Ray, are multi-unit
Fuzzy’s Taco Shop owners. “Mel is accessible,
approachable and passionately embodies the
spirit of the brand every day.”
Knight is the President of Fuzzy’s Taco
Shop, which was acquired by NRD Capital
in 2016. NRD founder and Managing Partner
Aziz Hashim and his team are a shining
example of financial partners that “get it”
when it comes to the franchisor-franchisee
relationship.
Before founding NRD Capital in 2014,
Hashim was a very successful multi-unit franchisee
himself, investing in such high-profile
franchise brands as Popeye’s, KFC, Taco Bell,
Dominos Pizza, and many others.
IDENTIFYING THE BEST OF THE BEST
There are many factors to consider when
investing in any franchise: business model
profitability, growth opportunity, long-term
industry trends, brand innovation, company
culture, training and ongoing support, and
more. And especially when you are looking
to commit to being a multi-unit franchise
owner, all of these factors become even more
important.
To help you narrow your search for the
best multi-unit franchise opportunities, we
surveyed and interviewed over 6,600 multiunit
franchise owners representing nearly 250
of today’s leading franchise brands. We asked
them the critical questions that any prospective
business owner would want to know.
A proven business model, solid profitability,
and long-term growth opportunity were
certainly important factors with the franchise
owners we surveyed. However, the franchise
companies that rose to the top shared many
other characteristics in common. Strong leadership,
an inclusive culture, excellent support,
and a franchisee community that feels more
“like family” than a business partnership.
“There are so many franchisors out there
that disappear as soon as they get business
owners to sign on the dotted line,” said Chris
8 | For more information on this report, visit: www.FranchiseBusinessReview.com