I joined Right at Home in 2008 to lead the franchise development team and increase Right at Home’s share of the in-home senior care market. As I conducted my research on Right at Home, it became clear that what I was looking for in a franchise company was very similar to what prospective business owners are seeking in a franchise opportunity. First, there were the usual criteria such as a low initial investment, proven resistance to recessionary times, and a business that truly fulfilled a need and made a difference in the lives of others. But after moving beyond those “prerequisites,” I started thinking about the various different companies I was familiar with after having worked in franchising for so long. I realized that there are three primary indicators that most strong franchise systems have. Below you’ll discover what those three indicators are, and what you can do to find out if the franchise you are considering indeed has a strong system in place.
Effective Leadership. An effective leadership team will realize that it must justify the royalty dollars being paid by its franchisees by providing a successful business model. Do they give their franchisees the value they expect for their valuable royalty dollars? If the answer is no, those franchisees will tell every prospective franchisee in the future about it, and that particular franchise company will find growth to be very difficult, which hurts everyone.
Prospective franchisees will only join a franchise system when they believe in the mission of the company, and in the executive team’s ability to help them build and grow their business, both short and long term. What you want is a leadership team that is strong enough to make the tough decisions, even when everyone is not in agreement. At the same time you also want a franchisor to be open to the new ideas presented by current franchisees, because many of the good ideas in any franchise system come directly from its franchisees. It’s a delicate balance, but when it’s done right great things happen.
Effective leaders are also vigilant in their defense and protection of the brand and systems. You want a franchisor with the authority in the franchise agreement to assertively enforce brand standards on anyone who jeopardizes the brand and systems. This will be especially meaningful if you are ever in the unfortunate situation of having a neighboring franchisee that is negatively impacting your business because they are doing something inconsistent with the system standards.
As you consider different franchise opportunities, be sure to ask the current franchisees about the management team and their ability to lead effectively. Then, meet with the management team directly to confirm what you’ve heard – prior to signing a franchise agreement.
Happy Franchisees. Universally, the best way to assess a franchise system is to talk to its franchisees. Are they successful? Is the franchisor trustworthy, and did they hold up their end of the deal? Would they do it again? These are all valid questions you should ask of current franchisees of any system that you are considering joining.
Also worth asking the franchisor is the number of franchisees that were directly referred to the company by other franchisees who knew the business very well – from the “insider’s” perspective, so to speak. It doesn’t have to be many, but when existing franchisees refer their friends and family they are providing an indirect endorsement of the system. They wouldn’t refer the people closest to them unless they felt the system was a good one. Right at Home has added six franchisees this way in the past 3 years alone. Grant Hamilton referred his sister Julie Burket in Bend, OR; Kristen Carlson referred her former brother in law Marc Weiss in Austin; Spencer Grimm mentioned Right at Home to his former boss, Greg Germany, who now owns a Right at Home office in Kansas City along with his wife Amy. We’ve also had two franchisees referred as a result of vendors in the industry, another strong indicator.
With all of the unknowns and fear that may be surrounding your decision to join a franchise, it may be helpful to see the model validated by current franchisees and their referrals.
Founder’s Experience. It is crucial that the founder has been in the drudges doing the actual work themselves. When the founder has hands-on experience, he/she can personally relate with the franchisees and provide firsthand expertise to them. Allen Hager, CEO of Right at Home, worked in hospital administration for many years, paying close attention as seniors were admitted to and discharged from the hospital time and time again due to not receiving adequate care when they returned home. So he set out to solve the problem. The best way to understand the issues families faced was to immerse himself in serving them to gain firsthand knowledge. He became a certified nursing assist so he could experience the needs of people who were still living at home but who needed some help to remain independent. Once he understood the need, he was able to build a business model that effectively addressed that need, and he created a system for everything in the business. For the next five years, he fine-tuned and evaluated every checklist, every process, every procedure – making sure the business model was ready for others to invest in. He then carefully expanded Right at Home from his own locally-owned and operated business in Omaha, Neb. to the franchise system that you see today with over 200 offices in 40 states in the U.S., and throughout the world.
Ultimately, every franchisor must be able to justify the royalty dollars being paid by its franchisees – in short, they must earn it. The industry knowledge of both the founder and the staff is an integral aspect of a strong franchise system, and you can look for signs of this within each company you are researching. For example, at Right at Home all new employees attend our new franchisee training class. Not because we are training them to be franchisees, but because we want them to understand our business model, and because we want them to sit, shoulder to shoulder, for two weeks with those that have gotten over the fear of the decision to take control of their future by investing in a business.
Conclusion. These three core organizational strengths have allowed many companies, including Right at Home, to grow and remain strong during uncertain economic times. They allow for a solid foundation upon which a strong franchise system can be built. That’s not to say there aren’t strong franchise systems that don’t have all three of these. But, pay close attention to those who do. Their franchisees are likely successful individuals working as part of a cohesive franchise network.