'Cult-like culture is key'; Longtime franchisors share secrets
of success
National Post
Mon Jul 28 2008
Page: FP5
Section: Financial Post
Byline: Derek Sankey
Source: Financial Post
Cameron Herold has a knack for being on the winning side of the franchising game.
The 42-year-old Vancouver-based entrepreneur has had a string of successes, from his early days building a small fortune by opening
up the westcoast for College Pro Painters to co-founding Boyd Autobody and Glass to leading a major expansion of 1-800-GOT-JUNK as
its chief operating officer.
These days, though, he has a hand in a lot of budding franchises setting up shop. He consults with and supports franchisors he thinks
have a recipe for success through his company, Backpocket COO.
Spending years in the trenches, battling toward prosperity through franchising, you learn a thing or two.
What separates failure from success, according to those who have been there, comes down to a few critical factors.
Whether you're looking to buy into a franchise or trying to roll out your concept by taking the business to the next level, those who
have had repeated success employ some similar strategies. "You have to create slightly more than a business and slightly less than a
religion," Mr. Herold says. "That cult-like culture is key to attracting and retaining great people."
That's where it all starts in his mind: The team of people supporting you and working for you must be aligned and committed to
building the dream and executing the vision. If you work with the wrong people, disaster will likely ensue.
"Hire great people, handcuff the awesome ones, keep building the skills of everyone and cut the dead weight as soon as you know they
need to go," he says.
If you're a franchisor, success comes when everybody makes money. "That was the thing I learned most in the early days of College Pro
Painters," he recalls. "The franchisees really had to be able to make a lot [of money] as well."
But if you don't have a strong concept, it doesn't matter who you're working with. Trust your intuition, ask current and past
franchisees the really tough questions and visit their offices.
If the concept and people resonate with you, then it's likely to resonate with customers, suppliers and employees, too, he says.
One of the questions would-be franchisors often ponder is the type of structure: single locations, area development agreement or master
franchise agreement.
"Single locations are always best to start because you're really getting the people who have skin in the game, who have passion and
who are going to really represent your culture and their interests are aligned with the customers," Mr. Herold says.
Area development structures are his second choice, but he points out that you could lose some of the control to a franchisee with
grandiose visions that may not follow through.
In a master franchise agreement, the buyer essentially has free rein and could be motivated by the wrong reason: Selling as many
franchises as needed to make quick money and then disappear.
Dominic Rubino founded Focal Point Coaching in Vancouver a few years ago and has since rolled his business-coaching concept out
across North America, with 43 franchises scattered throughout Canada and the United States.
He says if people do their homework, now is a great time for franchisors because demand for franchises is on an upward
trajectory.
"One big shift that has happened is that as the larger economy goes down, franchising gets better," he says.
The ageing demographic means the Baby Boomers, who've spent 35 years in the corporate world, are getting to the point where they're
looking to pursue a passion and want to work for themselves, but not by themselves.
Added to that is the fact any economic downturn leads to more people "entering the market," which Mr. Rubino points out means
they've lost their jobs and are now looking for something new. "The word in the franchising community is this is the best time to be a
franchisor because there's huge uptake," he says.
Franchise brokers can help people find the business they're looking for because they know of opportunities in different sectors, but
regardless of whether you're buying or selling a franchise, the systems and processes can't be overlooked.
"Think about everything you're doing and which system you're in at that time," Mr. Herold says.
"If something goes wrong, don't blame the person, blame the system and fix the system."
There is also a school of thought that strays from the traditional models of franchising. Take Andrew Latchford, who worked his way up
from being a server with Cactus Club Cafes to owning a franchise and being part of the executive corporate team.
Slightly more than half of the restaurant chain's 21 locations are corporately run, with the remainder being franchised to only two
owners, Mr. Latchford being one.
"We look at it as one entity, not a collection of different franchisees," he says.
"We want to make sure we protect our brand. The concern is if we don't have qualified franchisees, that will comprise our brand."
However, the company is now at a stage where it expects to double its locations in the next three years in Western Canada and
eventually in the East.
"I think a large part of our growth will come through franchising as we move forward. It's just a pure numbers game," Mr. Latchford says.
Whatever you do, you'd better know the business. All of them agree it comes down to committing yourself fully and paying close attention to every detail.
"If you're a lawyer who decided it would be cool to get into the restaurant business, you'll learn very quickly you really need to have some experience," Mr. Latchford says.
smallbusiness@nationalpost.com
Illustration:
• Color Photo: Jason Payne, For National Post / Cameron Herold, founder of Backpocket COO, says hiring great people and enhancing employees' skills are essential in making franchises work.
Edition: National
Story Type: Business
Length: 933 words
Idnumber: 200807280013
