Tag: franchising

THE VALUE OF ON-THE-JOB EXPERIENCE AND MENTORSHIP

Posted on by Franchise Strategist

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On-the-job experience and mentorship are integral to the modern professional landscape, offering a comprehensive and adaptive path to growth. On-the-job experience facilitates practical application and continuous learning, while mentorship provides tailored guidance and access to valuable networks. Together, they create a dynamic and robust learning ecosystem that nurtures professional development and encourages personal growth.

The Value of On-the-Job Experience and Mentorship
By Gary Occhiogrosso – International Franchise Association Mentor, Founder of Franchise Growth Solutions

In the rapidly evolving world of work, the importance of on-the-job experience and mentorship cannot be overstated. As industries continue to advance and technology shapes our lives profoundly, the need for relevant and real-time learning has never been more significant. This article will explore the multifaceted value of gaining hands-on experience and mentorship in today’s professional landscape.

On-the-Job Experience: A Crucial Learning Path
On-the-job experience represents an invaluable form of education that complements traditional academic learning. Here’s why it’s so essential:

* Practical Application of Skills
Theory and practice are two sides of the same coin. While educational institutions equip individuals with theoretical knowledge, on-the-job experience provides a platform to apply that knowledge. This alignment of theory with real-world scenarios fosters a more profound understanding and ability to adapt to different situations.

* Adaptation to the Workplace Culture
Experiencing the workplace first-hand is crucial in understanding the dynamics, collaboration, communication, and professional etiquette required. This immersion promotes seamless integration and helps develop essential soft skills like teamwork, empathy, and leadership.

* Continuous Growth and Learning
On-the-job learning is permanently active. It promotes continuous growth by encouraging individuals to face new challenges, solve real problems, and adapt to ever-changing industry trends. This constant evolution ensures that employees remain relevant and contribute effectively to their organizations.

Mentorship, Guiding the Next Generation
Mentorship goes hand in hand with on-the-job experience. It represents a relationship between an experienced professional (mentor) and a less-experienced individual (mentee) aiming to develop the latter’s skills, knowledge, and understanding of the industry.

* Personalized Guidance
A mentor provides personalized support tailored to the mentee’s needs and goals. This tailored assistance ensures a targeted growth path, leading to more significant professional development.

* Networking Opportunities
Mentors often open doors to professional networks, allowing mentees access to resources, insights, and opportunities they might not have encountered otherwise. This can significantly enhance career progression and open new avenues for growth.

* Encouraging Professional and Personal Growth
Beyond professional development, mentors often foster personal growth by instilling confidence, encouraging resilience, and offering valuable life lessons. This all-encompassing support helps shape well-rounded individuals ready to thrive in various facets of life.

The Symbiotic Relationship between On-the-Job Experience and Mentorship
The relationship between on-the-job experience and mentorship is not merely complementary but symbiotic. While hands-on experience provides the opportunity to apply skills and grow professionally, mentorship ensures that this growth is guided, purposeful, and aligned with individual and organizational goals.

* Accelerating Learning Curves
Mentors can help accelerate the learning curve by pointing out pitfalls to avoid, providing insight into best practices, and sharing valuable experiences that can save time and effort. This guidance ensures that on-the-job learning is efficient and effective.

* Fostering a Positive Learning Environment
Mentors can foster a culture of learning and curiosity by providing a supportive and nurturing environment. This environment encourages exploration, creativity, and a willingness to take risks, all essential in maximizing on-the-job learning.

* Enhancing Employee Retention
A strong mentorship program, coupled with opportunities for on-the-job learning, often leads to increased job satisfaction. Employees feel valued, engaged, and invested in their career paths, leading to higher retention rates.

Summary
On-the-job experience and mentorship are integral to the modern professional landscape, offering a comprehensive and adaptive path to growth. On-the-job experience facilitates practical application and continuous learning, while mentorship provides tailored guidance and access to valuable networks. Together, they create a dynamic and robust learning ecosystem that nurtures professional development and encourages personal growth.

Organizations and individuals who recognize and embrace these opportunities position themselves to thrive in a world where adaptability, continuous learning, and personal connection are paramount. The fusion of on-the-job experience with thoughtful mentorship paves the way for success in our ever-changing global economy, enriching both the individual and the broader community.

Risk Mitigation in Franchising

Posted on by Franchise Strategist

To mitigate these risks, entrepreneurs must conduct comprehensive due diligence before entering into a franchise agreement. Research the chosen industry and understand its market trends. Engage with existing franchisees and ask about their experiences. Evaluate the franchisor’s track record of success

Risk Mitigation in Franchising

In the entrepreneurial landscape, franchising is often viewed as a more secure path to business ownership. The franchise model offers several advantages, such as established brand recognition, pre-existing business structures, and continuous support from the franchisor. However, like any business venture, it does come with its fair share of risks. Understanding and mitigating these risks is critical for entrepreneurs who seek to thrive in franchising.

Identifying Risks in Franchising
Foremost, entrepreneurs need to identify the potential risks involved in owning a franchise. A franchise is not an automatic ticket to success. It requires dedication, hard work, financial commitment, and operational expertise. Some primary risks associated with franchising include the potential for failure, unmet earnings projections, and disputes with the franchisor.
Other risks could stem from the franchisor’s performance, market saturation potential, and unforeseen business environment changes. For instance, the franchisor’s performance directly impacts the franchisee’s business. If the franchisor fails to provide adequate support or suffers from a poor reputation, it can negatively affect the franchisee.

Strategies for Risk Mitigation
To mitigate these risks, entrepreneurs must conduct comprehensive due diligence before entering into a franchise agreement. Research the chosen industry and understand its market trends. Engage with existing franchisees and ask about their experiences. Evaluate the franchisor’s track record of success, financial stability, and support system. Understanding these elements can give entrepreneurs insight into the level of risk involved.

Financial risk is another considerable concern. To mitigate this, entrepreneurs should assess their financial capabilities accurately and align them with the financial requirements of the franchise. This includes considering the initial investment, ongoing fees, and the cost of maintaining the business until it becomes profitable.

Legal risk is another potential pitfall in franchising. Franchise agreements are complex and can include various legal obligations. Therefore, entrepreneurs must seek professional legal advice before signing a contract. A franchise attorney can help understand the terms of the agreement, ensuring that they are fair and do not expose the franchisee to unnecessary risks.

Proactive Management for Long-term Success
Entrepreneurs should be proactive in managing their franchise operations to mitigate risks. Regularly monitor financial performance and identify areas for improvement. Regular training and upskilling are also beneficial for keeping up with industry standards and ensuring the business operates efficiently.

Maintaining open communication with the franchisor is vital. If challenges arise, discussing them with the franchisor and seeking their advice or support is essential. After all, the franchisor has a vested interest in the success of the franchisee’s business.

Franchising offers a relatively secure pathway to business ownership. However, like any business venture, it carries inherent risks. By identifying these risks, conducting diligent research, implementing strategic financial planning, seeking professional legal advice, and being proactive in operations management, entrepreneurs can effectively mitigate these risks and increase their chances of franchising success.

This approach will not only ensure a successful franchising journey. Still, it will also provide a sturdy foundation for future entrepreneurial ventures, thus making risk mitigation an essential skill in the entrepreneurial toolbox.

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Article written with the support of AI

GENERATION Z AND THEIR ENTREPRENEURIAL ASPIRATIONS: NURTURING THE NEXT WAVE OF INNOVATORS

Posted on by Franchise Strategist

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Generation Z, born between the mid-1990s and early 2010s, has emerged as a generation driven by entrepreneurial ambitions. Unlike their predecessors, Generation Z possesses unique characteristics, experiences, and attitudes that have shaped their desire to become entrepreneurs. This article delves into the factors contributing to Generation Z’s entrepreneurial aspirations and explores how society can nurture and support their potential. By examining their digital nativism, exposure to technology, changing work landscape, and desire for autonomy and purpose, we gain insights into the motivations driving Generation Z’s entrepreneurial spirit. Furthermore, this article highlights the importance of educational initiatives, mentorship, and inclusive opportunities for fostering Generation Z’s entrepreneurial growth.

Generation Z and Their Entrepreneurial Aspirations: Nurturing the Next Wave of Innovators
By Gary Occhiogrosso – Founder and Managing Partner – Franchise Growth Solutions

Introduction:
Generation Z, the youngest cohort in the workforce, is demonstrating a strong inclination toward entrepreneurship. Unlike previous generations, their mindset is shaped by an ever-evolving digital landscape, exposure to advanced technologies, and a desire for autonomy and purpose in their careers. This article explores the factors contributing to Generation Z’s entrepreneurial aspirations and discusses how society can support and nurture their potential. By understanding their unique characteristics and motivations, we can create an environment that fosters their entrepreneurial growth and enables them to impact the global economy positively.

Digital Nativism and Technology: Generation Z is often called “digital natives” due to their lifelong exposure to technology. Growing up with smartphones, social media, and instant access to information, they possess remarkable digital fluency. This inherent familiarity with technology provides them with the tools and resources to navigate the digital landscape, build online businesses, and leverage social media platforms for entrepreneurial endeavors. The ease with which they can create and market products and services online has fueled their aspirations to become entrepreneurs.

Changing Work Landscape: Generation Z is entering the workforce during a time of rapid change, where traditional career paths are no longer the only option. The rise of the gig economy, remote work, and the increasing demand for flexible work arrangements have opened up new avenues for entrepreneurial pursuits. This generation values freedom, flexibility, and the ability to work on their terms. Entrepreneurship allows them to create their ideal work-life balance, paving the way for their desire to be their own boss and control their professional destiny.

Autonomy and Purpose: Generation Z seeks more than financial success; they are driven by a deep desire for autonomy and purpose in their careers. They value work that aligns with their passions and allows them to make a meaningful impact on society. Entrepreneurship provides an avenue for them to pursue their interests, develop innovative solutions, and address societal challenges. By starting their own businesses, Generation Z can shape their work environment, prioritize their values, and contribute to causes they care about, fueling their entrepreneurial aspirations further.
Education and Mentorship:
To nurture Generation Z’s entrepreneurial spirit, it is crucial to provide them with relevant education and mentorship opportunities. Traditional education systems must adapt to the changing landscape and incorporate entrepreneurship programs that equip young individuals with the necessary skills, knowledge, and mindset to embark on entrepreneurial journeys. Mentorship programs and initiatives connecting experienced entrepreneurs with Generation Z can offer guidance, support, and valuable insights into the world of entrepreneurship, helping them overcome challenges and develop their ventures.

Inclusive Opportunities:
Creating an inclusive environment for Generation Z is vital for their entrepreneurial aspirations. Many young entrepreneurs need help with barriers such as limited access to capital, lack of networks, and biases. By providing equal opportunities, eliminating systemic barriers, and promoting diversity and inclusivity, society can ensure that socioeconomic factors, gender, or race do not hinder entrepreneurial ambitions. Inclusive programs, incubators, and support networks are crucial in leveling the playing field, fostering a diverse entrepreneurial ecosystem.

Conclusion:
Generation Z’s desire to be entrepreneurs is driven by a unique combination of factors, including their digital nativism, exposure to technology, changing work landscape, autonomy, and purpose-driven mindset. Understanding and nurturing their entrepreneurial aspirations can contribute to the growth of a dynamic and innovative economy. By providing relevant education, mentorship, and inclusive opportunities, we can empower Generation Z to harness their creativity, overcome challenges, and make a lasting impact as the next wave of entrepreneurs.

THE ESSENTIAL ROLE OF BRAND CONSISTENCY IN SUCCESSFUL FRANCHISING

Posted on by Franchise Strategist

Photo by Samuel Figueroa

Success in franchising hinges on delivering a unified and harmonious brand experience across all outlets. For example, if you were to walk into a McDonald’s in any part of the world, you would expect the same ambiance, service, and product quality. This uniform experience is a testament to brand consistency.

The Essential Role of Brand Consistency in Successful Franchising
By Johnny Dey

Franchising has been a critical engine of growth for numerous successful businesses, providing opportunities for market expansion while mitigating the associated risks. It presents a lucrative platform for businesses to amplify their brand’s success, extend their market reach, and maximize profit margins. At the core of this successful strategy lies brand consistency.

Brand consistency is more than just a trending buzzword; it is a fundamental strategy for ensuring a franchise’s growth and longevity. Why so? Because consistency cultivates familiarity, and familiarity breeds trust, which is the cornerstone of customer loyalty.

The essence of franchising is a replication model. The underlying principle is to replicate the parent company’s successful business model across multiple locations, ensuring a consistent customer experience. This is where brand consistency comes to the forefront.

Success in franchising hinges on delivering a unified and harmonious brand experience across all outlets. For example, if you were to walk into a McDonald’s in any part of the world, you would expect the same ambiance, service, and product quality. This uniform experience is a testament to brand consistency.

restaurant, franchise , coffee
Photo by Erik Mclean

Brand consistency not only refers to visual elements such as logos, colors, and store design but also includes communication style, customer service, and the overall quality of goods or services offered. Thus, the importance of brand consistency in franchising is paramount.

Brand identity plays a significant role in making a brand recognizable and memorable. Consistency in brand identity across all franchises enhances brand recall, leading to increased customer loyalty and repeat business.

Customer loyalty is a pivotal element for any business, but for franchises, it holds supreme importance. When customers experience consistency across different locations, their trust in the brand deepens, resulting in enhanced loyalty.

Investment in brand training is a key aspect of maintaining brand consistency. Training programs should strive to instill employees with the brand’s values and mission, ensuring they can deliver the consistent service that is expected. Therefore, the implementation of regular and comprehensive training programs is crucial for the success of a franchise.

Another domain where brand consistency plays an integral role is in digital marketing. With the surge of customers turning to online platforms for their needs, franchises need to ensure that their online presence is reflective of their in-store experience. Consistent messaging and tone across all digital channels, including the website, social media, and email marketing, can significantly enhance the brand’s reputation and visibility.

Lastly, brand consistency contributes to the franchise’s value proposition. It offers a sense of reliability to both the franchisee and the customer. A well-established, consistent brand identity can often simplify the marketing efforts of franchisees, as they can leverage the pre-existing brand recognition and customer loyalty.

In conclusion, brand consistency is a vital ingredient for successful and sustainable franchising. It is instrumental in building trust with customers, fostering brand loyalty, and ensuring the overall success of the franchise. Therefore, businesses venturing into franchising should prioritize maintaining brand consistency across all their outlets.

TOP 10 MISTAKES TO AVOID WHEN GROWING YOUR FRANCHISE

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Photo by Nicola Barts

Avoiding these common mistakes can significantly enhance the chances of successful franchise growth. Understanding the complexity, protecting the brand, selecting suitable sites and franchisees, providing thorough training and support, respecting local market dynamics, planning financially, managing growth, and listening to feedback are all integral to the successful growth of a franchise.

TOP 10 MISTAKES TO AVOID WHEN GROWING YOUR FRANCHISE
By Gary Occhiogrosso

Growing a franchise can be a rewarding journey, offering an opportunity to amplify business success by extending a proven model across different markets. However, it is not without its challenges, and various pitfalls can hinder growth and undermine the business’s potential. Here are the top 10 mistakes to avoid when growing your franchise.

Underestimating the Complexity: Franchising isn’t just about replicating a business model. It entails legal considerations, marketing, support systems, and much more. Rushing into franchising without a comprehensive understanding can lead to disastrous results (Entrepreneur, 2020).

Failing to Protect the Brand: Your brand is your franchise’s core. Allowing inconsistencies in brand representation can damage the franchise’s image. It’s crucial to establish firm brand standards and enforce them across all franchises (Franchise Direct, 2020).

Poor Site Selection: The location of your franchise can significantly influence its success. Not conducting thorough research on potential locations can lead to poor performance and risk the viability of the new outlets (FranchiseGator, 2021).

Inadequate Training Programs: Franchisees need to understand the business’s core operations and values. An insufficient or poor quality training program can lead to operational inconsistencies and customer dissatisfaction (IFA, 2020).

Overlooking Local Market Dynamics: While a franchise model may work well in one area, it’s not guaranteed to succeed in another. Ignoring local market dynamics and not tailoring the franchise offering can result in failure (FranchiseGator, 2021).

Choosing the Wrong Franchisees: A franchise is only as good as its franchisees. Selecting franchisees based merely on their ability to pay the franchise fee, rather than their alignment with the brand’s values and their capacity to manage a business, can lead to problems down the line (Entrepreneur, 2020).

Neglecting Franchisee Support: Once a franchisee is up and running, the work doesn’t stop there. Not providing ongoing support can lead to operational errors and can cause franchisees to feel isolated and unsupported (Franchise Direct, 2020).

Expanding Too Quickly: While growth is desirable, expanding too quickly can strain resources and lead to mistakes. Franchisors must have a measured, sustainable growth plan (Forbes, 2021).

Inadequate Financial Planning: Franchising involves considerable investment. Lack of proper financial planning and underestimating costs can lead to financial troubles, impacting both the franchisor and franchisees (FranchiseGator, 2021).

Ignoring Feedback: Franchisees are on the front line and can provide valuable insights. Ignoring their feedback can result in missed opportunities for improvement and innovation (IFA, 2020).

Avoiding these common mistakes can significantly enhance the chances of successful franchise growth. Understanding the complexity, protecting the brand, selecting suitable sites and franchisees, providing thorough training and support, respecting local market dynamics, planning financially, managing growth, and listening to feedback are all integral to the successful growth of a franchise.

Sources:

Entrepreneur. (2020). The Pros and Cons of Franchising Your Business.
Franchise Direct. (2020). The Top 5 Franchise Mistakes to Avoid.
FranchiseGator. (2021). Common Mistakes to Avoid When Franchising Your Business.
Forbes. (2021). 10 Key Steps To Franchising Your Business.
International Franchise Association (IFA). (2020). Best Practices for Franchisors.

HOW TO RECRUIT & RETAIN “GEN Z” EMPLOYEES

Posted on by Franchise Strategist

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It is essential to consider Gen Z key preferences and values. Gen Z employees prioritize meaningful work and a sense of purpose. They are often motivated by opportunities for personal growth, career advancement, and the ability to impact society positively. Providing clear career paths and development opportunities is crucial to engaging and retaining them.


HOW TO RECRUIT & RETAIN “GEN Z” EMPLOYEES
By Johnny Dey

Finding, hiring, and retaining Generation Z employees requires understanding their unique characteristics, preferences, and attitudes toward work. As the newest generation to enter the labor force, Gen Z comprises individuals born between 1997 and 2012. According to the U.S. Department of Labor, as of 2020, Gen Z accounted for around 9% of the labor force, which is projected to grow in the coming years.

To attract Gen Z workers, it is essential to consider their key preferences and values. Gen Z employees prioritize meaningful work and a sense of purpose. They are often motivated by opportunities for personal growth, career advancement, and the ability to impact society positively. Providing clear career paths and development opportunities is crucial to engaging and retaining them.

Gen Z employees also value work-life balance and flexibility. They seek workplaces that offer flexible schedules, remote work options, and healthy work-life integration. According to a study by Ernst & Young, 75% of Gen Z employees believe that a flexible work schedule is essential to achieve work-life balance. Emphasizing work-life balance and offering flexible arrangements can be attractive to Gen Z job seekers.

Gen Z workers are also tech-savvy and expect employers to leverage technology effectively. They are comfortable with digital communication tools, collaboration platforms, and automation. Companies prioritizing technological advancements and providing a digital-friendly work environment will likely appeal to Gen Z candidates.

Gen Z employees also value diversity and inclusivity. They seek companies that foster a diverse and inclusive culture where they can express their authentic selves. Organizations that demonstrate a commitment to diversity, equity, and inclusion through policies, initiatives, and representation are more likely to attract and retain Gen Z workers.

Moreover, Gen Z employees tend to have a robust entrepreneurial spirit. They are interested in opportunities for innovation, autonomy, and creativity in the workplace. Companies that offer a supportive environment for entrepreneurial endeavors and provide platforms for idea sharing and collaboration will likely appeal to Gen Z employees.

In conclusion, attracting, hiring, and retaining Gen Z employees involves recognizing their preferences for meaningful work, work-life balance, flexibility, technological integration, diversity and inclusion, and entrepreneurial opportunities. By aligning company values with these preferences, organizations can better position themselves to attract and retain Gen Z talent in a competitive labor market.

Please note that while the U.S. Department of Labor provides information about the labor force and various demographic trends, specific statistics on the exact number of Gen Z individuals in the labor force may not be available as of my knowledge cutoff in September 2021. It’s advisable to refer to the U.S. Department of Labor or other reliable sources for the most up-to-date statistics.

GROW LEADERS WITHIN YOUR RANKS

Posted on by Franchise Strategist

If you want to increase retention and expand diversity in the restaurant business in 2023 – especially in leadership, on boards and with founders of growing brands – start with education.
The restaurant industry has an information problem. Historically, most restaurant education is limited to on-the-job (OTJ) training, which presents numerous challenges.

Increase retention and expand diversity through employee education
By Lauren Fernandez

If you want to increase retention and expand diversity in the restaurant business in 2023 – especially in leadership, on boards and with founders of growing brands – start with education.
The restaurant industry has an information problem. Historically, most restaurant education is limited to on-the-job (OTJ) training, which presents numerous challenges.

Traditional restaurant OTJ training is fraught with issues such as a lack of budget, lack of time and no quality control standardization. Accessibility is also an issue: often we see that with OTJ training there is no way to accommodate different learning styles and languages, alienating non-English-speaking employees. A lack of training stems from many problems, such as categorically high turnover rates, high levels of attrition and a general lack of leadership training that plagues our industry.

I’m a Latina and a first-generation American, and my parents saw education as a means for me and my siblings to better our lives. They worked hard to make sure we received the best education in order to create more opportunities than they had.

While I followed a traditional educational path in law and business, my OTJ training operating our restaurants was undoubtedly the most impactful. Experience in the field as an operator taught me more about the restaurant industry than my previous education could, and it closed the information gap on what it takes to be a leader in our industry. But both my educations together – in graduate schools and on-the-job – have equipped me with a unique lens, and it informs my call to action: we as restaurant leaders can leverage education to overcome barriers and as a tool for growth.

When we champion education, we mean restaurant-specific training with a focus on operational excellence, profit and loss management, leadership development and more. Investing in people and their personal and professional development contributes to a culture where people are valued, and ultimately develops stronger leaders that will make the industry a better place to work. We must proactively nurture the next generation of restaurant workers who will see the industry as a long-term career rather than a temporary job.

And this isn’t as hard of a lift as you would think. While I was an operator, I hosted quarterly management team meetings where we not only focused on results and celebrated wins, but we focused on new leanings and sharing best practices. I taught high-level strategies like profit management, but we always-connected theory back to actual practice. These meetings created a collaborative and transparent environment where managers helped each other improve, and they were instrumental in improving the performance metrics of the group as a whole.

Restaurants nationwide employ nearly 12 million workers and account for 4% of the overall GDP in the United States. As an industry, we still suffer from very high turnover and attrition. Investing in education is one key to retention and building long-term, desirable careers in our industry. To address the challenges of turnover and retention, consider some of these additional ideas:

*Innovative incentive and rewards programs like matching payments on student loans. More than 43 million people in the U.S. owe money toward student loans, and the average federal student loan debt balance is nearly $38,000. Offering a program to help reduce that debt can be a huge incentive to draw good employees and keep them. In fact, one study noted that 86% of people between the ages of 22 and 33 would commit to an employer for five years if offered a student loan repayment program. And, through 2025, employers can offer up to $5,250 in student loan repayment benefits without paying any tax thanks to the Consolidated Appropriations Act, which was signed into law in 2020 as part of pandemic relief efforts.

*Volunteer days for a food-related cause like a community food bank. Many studies have shown that offering some sort of volunteer program can boost productivity, increase employee engagement and improve hiring and retention rates. Ask your employees to select a cause, or find something that ties into what your restaurant offers – not only are you giving back to your larger community, you’re also showing your employees that you are doing something worthwhile outside your restaurant’s four walls.

*Encouraging participation. Support your employees to seek out opportunities to learn and engage in the industry. It can also encourage them to grow and thrive in their potential hospitality career. That can be through culinary schools and events, volunteer board opportunities or speaking on panels and at conferences.

*Sponsoring conference membership and attendance. Encourage employees to attend conferences or pay for memberships to restaurant- or culinary-related organizations. This will help create networking opportunities for them, and they will bring back information that could help your business grow, too.

*Teambuilding retreats/exercises. Consider building a program that promotes your company’s mission, vision and goals while also creating an atmosphere for support and encouragement.
With education as the cornerstone of your efforts to retain good employees, expect it to play an even larger role in the future as labor challenges continue. To that end, Full Course launched a new 501(c)(3) nonprofit foundation, Full Course Learning Center, to ensure education and support are accessible to all in our industry, from back of house to operators. You can find educational tools and resources, including more ideas about employee retention, at fullcourse.com/education.

When it comes to employee retention, new ideas and approaches will continue to evolve. By implementing some thoughtful ways to address these challenges, you can make sure that not only will you find good employees, but that they stay and grow with you and your business, too.

Lauren Fernandez is the Founder and CEO of Full Course (www.fullcourse.com ), a non-traditional restaurant investment group created for operators by operators that is changing the way new businesses grow their brands. The company partners with restaurants in the early stages of development to optimize existing operations develop strategies for sustainable growth and bring the right investors or franchise partners to the table. Fernandez is a restaurant industry veteran with two decades of experience. She previously served as general counsel and head of franchise administration for FOCUS Brands, a multi-brand restaurant company with more than 4,000 restaurants (including Carvel, Cinnabon and Moe’s Southwest Grill) in over 15 countries, and was co-founder, president and operating partner for multi-unit franchise developer Origin Development Group, acting as a strategic growth partner for brands such as Chicken Salad Chick. She also is a frequent speaker in the areas of organic business growth, licensing and franchise operations across the country.

HOW TO SELECT THE OPTIMAL VALUATION TECHNIQUE FOR YOUR STARTUP

Posted on by Franchise Strategist

Revenue multiples are helpful for both private companies (which lack stock prices) and public companies (for which stock prices are readily available). They’re also beneficial for businesses with low sales because they’re less affected by fluctuations in gross margins and other financial metrics that may fluctuate based on industry trends or economic conditions during the analyzed period.

How To Select The Optimal Valuation Technique For Your Startup
By FMM Contributor, Johnny Dey

Introduction

It is simple to focus on the day-to-day operations of your business when launching a business. You should not spend too much time contemplating the value of your business or the amount you could receive if you sold it. However, valuing your venture is crucial to operating a successful business, as it helps you determine how much capital you need to raise to develop and sustain your business. When it’s time for an investor or potential acquirer to make an offer on your company, valuation is an essential part of the negotiation for the selling price.

The Market Strategy

The market approach is founded on the value of comparable businesses. Therefore, this method is optimal for entrepreneurs with a proven business model or who have already raised capital.

The market approach can be utilized to determine the value of either a startup or an established business. For example, an early-stage company has yet to achieve profitability. As a result, it may not have any revenue. In contrast, a mature company has already achieved profitability. As a result, it generates sufficient cash flow to pay its obligations and reinvest in itself without raising additional capital from investors.

Revenue Multiple

Revenue multiples are a straightforward strategy for valuing a business. The multiple revenue formulae divide a company’s annual revenue by its market capitalization, which is its stock price multiplied by its outstanding shares. For instance, if your company has $1 million in revenue and a comparable company has a market capitalization of $10 million, then your company would be valued at ten times revenue, or $10 million.

Revenue multiples are helpful for both private companies (which lack stock prices) and public companies (for which stock prices are readily available). They’re also beneficial for businesses with low sales because they’re less affected by fluctuations in gross margins and other financial metrics that may fluctuate based on industry trends or economic conditions during the analyzed period.

EBITDA Multiple

Multiples of EBITDA are based on a company’s earnings before interest, taxes, depreciation, and amortization. EBITDA is an excellent indicator of profitability because it is less affected by accounting decisions than net income.

The calculation for this multiple is as follows:
Earnings Before Interest Taxes Depreciation And Amortization (EBITDA) Multiple = (Earnings Before Interest Taxes Depreciation And Amortization) / Enterprise Value

Comparable Organizations Technique

The analogous companies method is the most prevalent method of valuation. It’s founded on the presumption that your venture is a “normal” business, so you can use other comparable companies to determine its value.

This method is very time consuming, as you must identify analogous companies and compare them to yours. In addition, this method needs to account for the risk and ambiguity related to your startup’s business model and product/service offering.

Pricing Strategy

The cost approach is a method of business valuation that compares your company to others in the same industry to determine its worth. This strategy depends on tangible and ethereal assets, such as technology, team, and brand, in addition to the customer base.

Identifying competitors with similar products or services publicly traded on Nasdaq or NYSE MKT is the first step in this process (formerly known as OTC Markets Group). Once you’ve identified analogous companies, you can compare their sales figures to determine whether yours are developing at the same rate or quicker. If they’re growing faster than you, this may indicate that there’s room for expansion in your own business; however, if they’re growing more slowly than you, investors may be able to demand better terms from them when negotiating funding rounds in the future, as they’ll know how much potential value lies within each share of stock sold today compared to tomorrow’s market price once news spreads about how well Q1 earnings season went!

Benefits Of An Asset-Based Strategy

The benefit of an asset-based approach to valuation is that it measures a company’s intrinsic value. This is because it emphasizes assets rather than liabilities. Subtract your liabilities from your assets, then divide the difference by one minus your tax rate to calculate this method (1 – T).

The disadvantage of this method is that it does not account for intangible assets such as goodwill or intellectual property rights; however, these can be factored into any potential sale price through negotiation with potential buyers or sellers during due diligence processes before finalizing the transaction.

The optimal method for valuing your venture depends on the specifics of the situation and its characteristics.

The market approach is the most straightforward and intuitive method for valuing a startup. It is based on the value of comparable companies in the same industry, so it can be used for early-stage companies that do not yet have a significant amount of revenue or earnings (if any). The disadvantage of this method is that it is challenging to locate comparable companies; you will need access to an extensive database of private company financials if you wish to employ this strategy.

Conclusion

The optimal method for valuing your venture depends on the specifics of the situation and its characteristics. If you have significant market potential and wish to transfer your company immediately, you should adopt a market-based strategy. The revenue multiple and EBITDA multiple are useful for valuing established firms. In contrast, the comparable companies method helps value smaller businesses with less complex operations. The cost approach can be used when estimating value based on assets or liabilities alone. In contrast, the asset-based approach is beneficial when evaluating a company’s goodwill value.

TIPS ON COMMUNICATING SUCCESSFULLY WITH YOUR EMPLOYEES

Posted on by Franchise Strategist

When you are in charge of anything, communication is a crucial aspect of the task, but its relevance increases if you are in a leadership role regarding employees. The method in which you interact with your employees may have a substantial impact on how they feel about their jobs and the quality of work they do. You want them to feel heard and appreciated.

Tips on Communicating Successfully With Your Employees

Introduction

When you are in charge of anything, communication is a crucial aspect of the task, but its relevance increases if you are in a leadership role regarding employees. The method in which you interact with your employees may have a substantial impact on how they feel about their jobs and the quality of work they do. You want them to feel heard and appreciated. You also want them to feel free to make mistakes without fear of censure or punishment. However, accountability for their actions should not be overshadowed by communicating in such a way that they are not aware of a mistake. It’s how you use the mistake to improve that count. This is why it is crucial to know how to communicate most effectively with them: you want them to feel heard and appreciated, but you also want them to feel comfortable speaking freely without fear of making a mistake.

Set The Tone

Set the tone by being a good example for people to follow. As your employees will mirror your behavior and emulate how you deal with them if you set a good example, it is crucial that you courteously communicate with them.

Preserve coherence to establish a tone. Ensure that every team member is aware of the expected behaviors while communicating with one another, whether through email or in-person meetings; then adhere to these standards in all of your communications. The use of proper words is critical to maintaining clear and professional communication, particularly in a workplace environment.

When dealing with employee disputes, you should set the tone by being kind and impartial (and even between managers). When there is a dispute between two individuals or teams at work, you shouldn’t let it develop into a full-scale conflict; instead, you should attempt to resolve the issue amicably before involving higher-ups if necessary. If you allow the situation to grow into a full-scale battle, you will only make matters worse.

Communicate In Person

Unquestionably, emailing your workers is an excellent way to stay in contact with them. Face-to-face engagement, on the other hand, cannot be compared to any other kind of communication in terms of delivering crucial information and managing workers’ emotions. When you are face-to-face with your employees, you can read their body language and assess how they respond to your words, and vice versa. You can also convey the tone of voice and facial expressions, which is far more complicated (or impossible), through email.

Due to recent improvements in videoconferencing technology, it is now possible for individuals on opposite sides of the globe who have yet to meet to want or need something from each other (such as comments on performance appraisals) to connect.

Ask Questions, Not Statements.

Ask open-ended inquiries. This can help you better comprehend the employee’s perspective and encourage them to respond more thoughtfully.
People sometimes do not like it when you answer a question with a question, but do it anyway. It conveys an interest in what the other person is attempting to communicate and your desire to truly understand them.

Whenever feasible, you should avoid asking yes/no questions and making “if/then” statements since these queries tend to be too binary for most situations. Instead, you should ask yourself: what else could this person possibly be thinking? What would be different from their vantage point? And what reaction would I get if I told them this?

People Should Be Allowed To Speak Openly

While communicating with your workers, you must allow them to express themselves freely. As a leader, it is crucial that you listen to what people have to say without interrupting or casting judgment on what they say. It is preferable to ask questions when something does not make sense rather than make assumptions or speculations.

It would be best to allow them space to express themselves without feeling compelled by your emotions interfering with the dialogue. For example, when a team member makes a mistake, you may feel angry or frustrated. Nevertheless, it would be best to refrain from responding emotionally since doing so will only exacerbate the problem and distract your teammates from what matters most: how effectively they execute their job.

Practice being an attentive listener (and observer)

The single most important thing you can do as a leader is to listen to the input supplied by your workers. You may decide not to execute on the suggestion, but at least it should be heard and considered

Listen to what they have to say and observe their behavior, not just in the workplace but also in other contexts. This entails studying closely how folks interact in person and through technological means such as email and text messages. You may find that some of your best ideas come from observing patterns of behavior that have not been explicitly brought up but are nonetheless significant (for instance, an employee may always respond to questions about a project with “I’m on it!”; this could indicate that she needs additional direction). Conversely, you may also discover that some of your finest ideas result from recognizing patterns of conduct that have not been expressly mentioned but are nevertheless significant.

Don’t Allow Job Titles To Distract You.

Keep job titles and responsibilities from distracting you throughout the recruitment process. Instead, please focus on the person, their achievements, and degree of competence. Focus on what they can do for your company and how they can help you achieve your goals.

It is easy to fall into the trap of focusing on resumes instead of people when filling a job quickly; this is particularly crucial for recruiting managers with limited resources and time restrictions. This is particularly critical when recruiting managers have limited money and time. Yet suppose everyone concentrates on credentials instead of personalities and character qualities. In that case, it becomes hard for candidates with tremendous potential but insufficient experience to distinguish themselves from others with more relevant expertise but less overall potential. This is because qualifications are objective, but personality characteristics and character traits are subjective (for example: if one person has worked as an assistant manager while another has worked as an entry-level employee).

Clear Communication Is King

One of the essential components of being a great leader is the ability to communicate with others, yet this can be challenging. Please remember that communication is a two-way street; if you want to get the most out of it with your employees, you must be open and honest.

Listening to what they are saying is crucial, so try asking questions such as “What do you think?” or “Can you give me some examples?” Listening more than speaking makes individuals feel more comfortable opening up about sensitive topics. Again, it is essential that you pay close attention to what they are saying. Consider asking, “What do you think?” or “Can you provide some examples?”

Not only does having clear expectations facilitate communication, but it also guarantees that everyone is on the same page regarding how they feel about any given issue or event. For instance, if you tell another individual which tasks must be completed by then, there will be a clear understanding when those dates come up again!

Conclusion

It is important to remember that communication is a two-way process. You cannot just lecture your employees; you must listen to what they say, observe their actions, and ask them questions. Doing this well helps employees feel acknowledged and allows them to provide feedback on what they think needs to be addressed at their workplace.

What To Consider When Purchasing A Franchise

Posted on by Franchise Strategist

Photo by Estée Janssens on Unsplash

Summary: To select the ideal franchise company to join, you should first find a company with a proven track record of success. A good franchisor will have been in business for at least two or three years and be able to demonstrate the growth potential of its products and services. The best way to do this is by looking at how many franchises they currently have in operation and are they profitable. A robust and growing network often indicates a successful brand.

10 Key Points To Consider When Purchasing A Franchise
Originally published in Forbes.
By Gary Occhiogrosso, Managing Partner Franchise Growth Solutions

If your goal is to purchase a franchise, choosing the right franchise brand to invest in is one of the most important decisions you’ll make as a business owner. It’s not just about finding a company with a proven track record but also finding one that fits your personality and lifestyle. Your first step, is knowing what to look for when you’re evaluating potential franchises. Here are some key areas to consider:

Franchise Fees
Franchise fees are one-time payments made when purchasing a franchise. These fees can range from $10,000 to $100,000 and are used to pay for the rights to use the name, the procedures and any systems developed by the franchisor. It is also used to cover costs for training and opening support by the franchisor to assist the franchisee with the opening of their franchise. Franchisors usually charge their franchisees up-front fee when the franchise is granted. In addition, post Covid initial “turnkey” investments may be higher than in the past due to supply chain issues, inflation, and increased cost of equipment and leasehold improvements between brands.

Royalty Fees
Royalty fees are the amount of ongoing money (usually a percentage of gross sales) you pay to the franchisor for using their brand name and ongoing support such as marketing and developing new products or services for the franchisee. As a franchisee, you are required to pay royalties based on a portion of your sales. This percentage may be fixed or fluctuate on a sliding scale based on sales.

Term Length
Franchise term length can be a good indicator of how much the Franchisor invests in their franchisees.
On average, depending on the type of franchise, home based vs a retail location, franchise brands have terms that last ten years or less. This means there’s plenty of time for the franchisee and franchisor to work together and develop a solid relationship. Still, it also means that the franchisee may not be allowed to retain the business if something doesn’t work out. If a franchisee is underperforming, the franchisor may not renew the franchise agreement once it expires, or may seek to terminate the franchise prior to the full term. In such a case, the franchisee must exit the business. In many instances, there will be a contractual obligation that the franchisee cannot open a similar business for a period of time within a certain distance from their original location. This is called a non-compete clause.

Consider Your Lifestyle.
* Consider the lifestyle you will have while running the business.
* Look at the hours of operation. You don’t want to buy an 80 work week.
* Review flexibility of franchisor with respect to new products, relocation and other variables.
* See if the location makes sense for you. You will need to manage the location or develop a team to manage the day-to-day operation for you.
* Check out the type of work needed to run the franchisee. Make sure it fits your skill set and interests, including whether it’s something you’d enjoy doing as a full-time job.
Seeking the advice of a professional franchise consultant can be an extremely useful method when evaluating if a franchise is the right business model for you. Scott Milas, a Certified Franchise Executive (CFC) and Certified Franchise Consultant (CFC) with The International Franchise Professionals Group recommends you consider these questions: “What is your “Know” and “Why?” Understanding “why” you are interested in owning your own business, and “knowing” who you are, are critical steps in choosing the right opportunity. A self evaluation and clear picture of your skill sets and eventual end game- exit strategy, will help ensure that you invest in the right opportunity. Better to “know” now then after you made the wrong decision. “Why” now?
An experienced franchise consultant can assist you in answering those questions and choosing a brand that’s a good lifestyle fit as well as one that offers opportunities to meet your business goals

Look For An Experienced Franchisor
To select the ideal franchise company to join, you should first find a company with a proven track record of success. A good franchisor will have been in business for at least two or three years and be able to demonstrate the growth potential of its products and services. The best way to do this is by looking at how many franchises they currently have in operation and are they profitable. A robust and growing network often indicates a successful brand. In addition, it demonstrates that customers value its products or services enough to pay for them again through multiple businesses.
The second thing you should look for when choosing a franchise is reputation—how well does your chosen brand stand up against its competitors? While there may be other similar businesses out there with similar business models, does you selected band have points of difference to separate itself from the competition. It’s essential that you choose one that utilizes high-quality materials, produces consistent results, and provides excellent customer service while maintaining competitive prices at all times.”

Know Your Competition
One of the steps to building a successful franchise business is to know your competition. What brands already exist in the market, and how do they compare? What is their customer base, and what can you learn from them? How do your offerings differ from theirs, and how do these differences help or hinder you as a company?
Tom Scarda a former franchisee and now a franchise coach and consultant offering advice to franchise buyers regarding evaluating the competition and what it may mean to their success as a franchisee “It’s smart to think about a product or service that is needed in your area and consider bringing that sort of business to the town. However, just because there are no batting cages in your town and you think it would do great because there are kids everywhere, you may be right. However, will it make money? Is there some reason why there is no batting cages in the area? When starting a business, you must, must do a comprehensive business plan before anything else. Learn about competition in the area. Understand the local county laws and regulations around the business you’re considering. Be real about the cost to start and run the operation. These are just a few items to consider in a business plan.”

Once you’ve got a handle on who’s out there, it will be easier for you to see where there are gaps in the market—and then fill those gaps with your unique brand identity.

Carefully Review The Franchise Disclosure Document.
Read the current franchise disclosure document (check the issuance date) and have it reviewed by a competent franchise attorney. Harold Kestenbaum, a noted franchise attorney with Spadea Law advises: “When considering the purchase of a franchise, I highly recommend retaining the services of an experienced franchisee attorney. Never contemplate purchasing a franchise without seeking the advice of an attorney who has reviewed FDD;s before. I also recommend that you do your due diligence. By that I mean that you should review Item 20 of the FDD and call all of the existing franchisees who are in your general area.”

There are additional factors to consider when reviewing the franchisor’s FDD. According to Richard Bayer, a Partner in the law firm Einbinder & Dunn LLP: “Purchasing a franchise for many first-time business owners will often be one of the top three expensive transactions the franchisee will ever go through in his/her lifetime. Given the severity of the investment, a franchisee must commit to doing due diligence. It starts with speaking with existing franchisees as well as those who left the system. Their contact information can be found in the FDD. The goals from these calls include gaining a better understanding of the economics of the franchise – is it profitable, when is break even reached, do costs (labor or otherwise) or revenues fluctuate significantly making it difficult to predict performance. Equally important is getting a sense of the franchisor’s temperament – is the franchisor supportive, does the franchisor go above and beyond legal obligations (imposed in the franchise agreement) to deliver for its franchisees, is the franchisor forward thinking and/or technology driven. The FDD is a great source of information about a system, but it is has gaps that can be filled in quite nicely by franchisees in the system and by those who left. Purchasing a franchise without speaking to as many franchisees as possible is a lost opportunity.”


Investigate The Franchisor’s Tenure And Track Record of Success
In addition to analyzing the franchisors’ financials, it’s also vital to examine their overall track record. While a strong balance sheet is an essential indicator of a business’s health and stability, it doesn’t tell you much about how they’ve fared over time. So, for example, if you’re looking at two franchises with similar books and financials, but one of them has been around for four years while the other has been operating since say, 1899, it would make sense to choose the latter in this case—even if everything else on paper looks the same.
This information can be gleaned from third-party sources such as Dun & Bradstreet or franchise trade magazines or by visiting the website of the International Franchise Association. Always go directly through your Franchisor before getting this data yourself so that they can confirm that everything is correct and up-to-date. In addition, it is vital that you speak with or meet as many existing franchisees as possible before you make your final decision.

What Are The Brand’s Training Programs And Support?
When you buy a franchise, you’re not just buying the rights to use its brand name. You also get access to training programs, mentoring, and support from the Franchisor. These must be proven and effective; otherwise, it can be challenging for your business to grow or stay profitable.
You want to ensure that your franchisor is committed to your success as a franchisee. That means offering in-person training (the better option) and or using phone or video calls if necessary. It also means regular advice on running your business and what strategies might help you reach more customers or increase revenue.

Review The Franchisor’s Marketing Plans.
A good franchisor will have a written marketing plan in place. The marketing plan should include a social media strategy and details about how the franchisor plans to use the funds provided through your advertising fees. If you ask for this document, they should be willing to share it with you.

Choosing The Right Franchise Brand Can Significantly Impact Your Success.
We’ve talked about screening potential franchise brands above. Still, there are some other factors that you should also consider when choosing where to invest your time and resources.
Tom Scarda goes on to say “We always hear the phrase, “If you love what you do you never work a day in your life.” That is true if you’re working a job. But a franchise is not a job. It’s a business that allows you to build a lifestyle. In the end, the service or product the business provides doesn’t matter. Of course, it must make sense for the community where you will operate and the concept must be something that you understand. However, you can be a vegetarian and own a burger joint. As the owner you are acting as the CEO and CFO, you’re not flippin’ burgers…well you shouldn’t be. If you are doing the tasks that the business requires then you bought yourself a job and your business will plateau and not be scalable. Scarda adds “Don’t buy a business because it has to do with your hobby. If you do, you will no longer have a hobby and you will probably resent the hobby if you’re trying to pay your mortgage with it. Instead, invest in a business that will give you the time and money to enjoy your hobby until your heart’s content.

Conclusion
It is important to consider all these factors when looking for a franchise brand. Some of them, like the fees and term length, are more straightforward than others. But, if you want to be successful in your franchise opportunity, it’s worth taking the time to research what makes each Franchisor unique thoroughly. A good franchisor will have invested in training programs and support systems that will help you understand how their business works.