Greg Willman has a history of getting involved with brands at the dawn of their franchising journeys. He made his mark early on at QDOBA as one of the first and largest franchisees. But his trajectory changed when he became the first franchisee of Naf Naf Middle Eastern Grill. Soon after opening his first location, he was tapped to lead the emerging franchise as its CEO.
“Spending a lot of time with early-stage companies on the franchisee side of things really informed me that as a franchisor, you have to be very picky about who you get in business with,” he said at the QSR Evolution Conference earlier this year in Atlanta. “It’s a long-term relationship that can be quite complicated, and you’re mutually dependent on one another.”
Willman took the stage alongside a group of quick-service veterans who made the jump from franchisee to franchisor. They dove into the challenges and growing pains, as well as the lessons and opportunities, that come with taking the leap.
“For a lot of brands, once they’ve decided to go down that path and put the infrastructure in place, there’s a temptation to just go try to get deals done,” Willman said. “From my perspective, that’s a mistake. You should be very patient and make sure that you’re getting in business with the right people, particularly early on. It’s critically important that the first several relationships that you put in place as a franchisor with a franchisee turn out well and come to fruition. If you do that, things can accelerate rapidly from there. If you get those wrong, you can really get stuck in the mud.”
George McLaughlin, co-founder of Vicious Biscuit, learned this lesson after McAlister’s Deli started franchising, back when it only had a total of four stores. He witnessed the system’s rapid growth and the complications that came with it as the first McAlister’s employee to transition to a franchisee role.
“Watching the franchisor really separate from the franchisees, you quickly learned that they forgot who the real customer was,” McLaughlin said. “So, when I got back into the franchisor side, I kept in mind what I went through as a franchisee and all of the pain points that we had in our operations. It goes back to the structure, training, and making sure we had systems in place before we launched franchising because I watched one almost come crashing down in the early stage.”
Interest in Vicious Biscuit has surged after the brand opened up for franchising, he added, but only a handful of franchisees have been selected so far.
“We always say that we don’t want you to be a franchisee, we want you to be a partner,” McLaughlin said. “We’re not franchising a vending machine business. We’re franchising a brand that has to be protected. So, you have to be passionate, and more importantly, you have to know how to run a business.”
Toppers Pizza CEO Adam Oldenburg, who also is part of a group that owns several locations, echoed that sentiment. He highlighted the importance of providing those passionate, business-savvy partners with the right systems, processes, and standards to be successful.
“They have this entrepreneurial mindset, but at the same time, they need to follow the system,” he said. “That’s why you get into franchising in the first place, right? You’ve got a great system that you can execute with a great brand. We’re seeking out those individuals that have the go-getter mentality and who can roll up their sleeves, but still follow the system that you lay out for them, so that they can thrive. Our best franchisees are ones that follow the system to a T. I think that’s one of the most challenging parts of franchising.”
That’s also where having experience on the other side of the relationship comes in handy, said Sharon Arthofer, founder and CEO of Sip Fresh. The priorities that guided her as Wetzel’s Pretzels’ first franchisee also influenced her approach to building her specialty beverage concept.
“A high quality of product, low cost of entry, and simple operations—that’s one, two, and three for me,” Arthofer said.
Making the jump still required a major shift in perspective, though. As a franchisee, you’re “in control of your own destiny” and running your business well is the key to success, she said. But as a franchisor, you’re responsible for helping others succeed. Instead of just managing your own store or group of stores, you’re coaching and supporting other business owners to be good at what they do.
“I think it’s an advantage today that I was the first franchisee for Wetzel’s because I learned very quickly being a franchisor to be able to pivot,” Arthofer said. “When you start a new company, they want it exactly this way, and they’re not necessarily malleable in listening to the franchisee with regard to changing things and seeing what could be better. I go into it now with an open mind as I work with franchisees. They may bring something to the party, and we should be able to quickly pivot if it’s a great idea.”
Craig Dunaway, former franchisee and current COO of Penn Station East Coast Subs, emphasized that experience as a franchisee helps foster productive relationships and open communication. That goes a long way toward avoiding the sometimes adversarial dynamic he encountered early in his career as a Papa Johns franchisee.
“When I became a franchisee at Papa Johns, I don’t think I respected the franchisee–franchisor relationship enough,” Dunaway said. “There was this ‘us versus them’ mentality. Communication is key in that relationship, so it’s an advantage when you’ve walked a mile and in their shoes and you can say, ‘I’ve felt your pain before. I’m no longer a franchisee, but I’ve negotiated 50 leases, fired people and hired people, and done all those things.’”
This shared experience adds credibility when it comes to challenging franchisees and holding them accountable, too.
“Are you doing what you said you’re going to do? Are you committed to the level you need to be committed? Are your people trained? Are you spending your ad dollars? You get to have those conversations peer-to-peer,” Willman said. “Yes, you’re the franchisor that they have a business relationship with, but you’re also a peer, and you can really have unvarnished conversations in a way that I’m not sure I would feel comfortable having, or be able to have, had I not come to this seat through that path.”
