John Nickleby, like so many other franchisees, broke free of a long-term corporate career when he opened a Dunn Bros. Coffee Shop in Hudson, Wisconsin, in 2007 at age 56. With previous experience at American Security and Northwest Airlines, Nickleby was able to funnel his past ventures into his new investment. Since he had little franchising knowledge, Nickleby partnered with his close childhood friends, brothers Rick and Chris Swanson, in the venture.
Three years later, the trio opened an Erbert & Gerbert’s sandwich shop next door to the Dunn Bros. unit. Nickleby and his team have since experienced a 50 percent increase in sales from the sandwich shop, becoming successful entrepreneurs together, despite the old adage warning against mixing friends with business.
Nickleby discusses how entrepreneurs can successfully switch careers and join with friends in the franchising world.
1. Make a conscious switch
I was tired of the same-old, same-old. Working for others, corporate missteps kept adding up after the years. I knew I could do well in a business of my own. Along with the independence that comes with franchising, I knew and loved the product.
Erbert & Gerbert’s really allows you to be creative as a business owner, even under a franchised brand. For any prospective franchisee, it has a to be a smart move and not simply wanting to do something else, especially if you’re on the downside of your working years. Even with the many years of corporate experience I had, there were still challenges I had to overcome.
I was used to corporate structures and routines and waiting on answers from others to get things moving. Once I got into franchising, I was the one making those decisions, and it was a big adjustment. I went from a rigid structure to a more flexible working schedule, handling matters directly when they arose.
2. Establish a partnership on trust
I always thought of franchising as being an affordable investment, especially with Erbert & Gerbert’s. I figured I would be able to use my customer service, quality control, and management skills at previous positions in the quick-serve industry. I made the decision to partner with Rick Swanson when opening up the store in Hudson. Having known Rick for a long time, we had a very strong friendship based on trust and similar core values. This is perhaps the most important part when it comes to potentially doing business with friends: trust. There is always a little worry that if something goes wrong, if some aspect of the business falls short, it might hurt your working relationship and friendship as a whole. For Rick and me, this has not happened, but it is always a risk if you’re partnering with friends.
We are always there to help one another, but the trust allows Rick and others to manage our two Dunn Bros. stores, and me to handle most of the Erbert & Gerbert’s business. Without this level of trust in the friendship, there is no way either of us would be able to operate successfully.
I am a very lucky business owner to have this situation work out and to continue to be profitable. Having said that, I do not recommend this for everyone. Small businesses, regardless of the industry, have a low success rate. Franchisees have a better fighting chance because of proven practices, models, support, training, etc., but it is still an investment that will either pay off or be unsuccessful. The partnership allows each of us to contribute with our strengths and pull together for weaknesses that we all exhibit eventually.
There needs to be a successful, longstanding history when you are thinking of a business partner with a friendship attached. If something happens, there is no telling when the business flows over into the friendship aspect of the relationship, which can lead to some unfortunate results.
3. Work strategically with your partner
My experience as a franchisee is unique, but while others might not have the exact same start, each franchisee has his or her own way of becoming successful. Regardless of the “how,” my partnership and friendship is successful because of our attention to detail and hands-on management. This business needs to be followed like a program or a guideline. We follow paths laid out for us in so many other areas of life and business needs to have the same mentality. Sometimes it goes in a different direction, but with a great brand and good partners, you can limit your problems. We apply all the same principles and hard work to both brands in our portfolio. For us, it is about the passion of continually being successful.
The fact that we are also friends is an additional blessing. We knew that we had to plan out smart and not start too soon. Prospective franchisees need to be aware of diving into anything quickly and being undercapitalized. Rely on your partners and work together as a team. Again, it all goes back to trusting in your partners. Go through the challenges together. For example, we have had the challenge of finding quality employees with good values whom we can rely on consistently. By working together, we are tweaking our training program to get a better level of trust between our employees and management. It’s a work in progress, but working through this particular issue, and others, builds the working relationship we have and will lead to more success as business owners.