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Franchisee Advice

Setting Goals for Franchise Success

Before you buy a franchise, it’s important to set goals so you can reach your financial and personal dreams.

Joe Matthews

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Before you research any franchises, you should set three- and five-year goals. Goals must be both financial and ‘quality of life’ (or non-financial) in nature. Financial goals should take into account cash flow, savings, net worth, equity build-up and spendable income. Quality of life goals should consider lifestyle issues that are important to you, like having dinner at home three nights a week, being able to take vacations, attend soccer games, make a difference in the community, and so on.

Don’t overlook quality of life goals or you’re setting yourself up for dissatisfaction. Quality of life goals are more important than financial goals. Why? Because many people who invest in a franchise have already made a decent living in the past. Aside from earning a pay cheque however, they couldn’t find a compelling reason to go to work in the morning. Money alone wasn’t enough to keep them going, and money will not hold your interest long either. While you will have some minimum threshold of earnings which you won’t dare to venture below, once that threshold is exceeded, you will find that quality of life becomes the driver.

Virtually all franchisors have key performance criteria that help you and the franchisor to determine whether or not your business is winning. You will be taught how to track sales, labour costs, cost of sales, and other statistical measures. Franchisors design their business and support systems to help you structure your business to achieve these measures and monitor results.

Following the Money

However, we know of no franchisor who measures how many meals you’ve eaten with your children or how many of the kids’ soccer games you’ve attended. Franchisors measure your success by their definition, not yours. Most franchisors have no clue as to whether or not their ‘successful’ franchisees are living the life they originally desired when they invested in a franchise. Franchisors follow the money. And as we’ve already stated, money won’t hold your interest long.

Additionally, in order to secure loans, bank financing, financial support from your family, or other forms of financing, chances are you will need to write and submit a business plan or cash-flow projections to the parties from whom you’re seeking financing. In your plan you will detail the tactics and strategies you will execute to drive the sales, contain the costs, maximise the cash flow of your business, and repay your loan. To succeed in business, you have to generate money.

Imagine that you’re in business, money is tight and you are two months late on loan payments. The loan officer calls you to see what happened. You tell the loan officer that while you don’t have the money to pay the two instalments, you did attend all your kid’s soccer games this month. Most likely the loan officer will sarcastically reply, “Congratulations. I’m nominating you for parent of the year.

Where is my money?

Like banks, franchisors also want their money on time. They are as focused on achieving their own financial goals as you are on achieving your complete and total definition of success. We’re not saying this is right or wrong, it’s just the way it is. If you were to list and prioritise the many reasons you’re looking to start a franchise, where does ‘helping the franchisor exceed its corporate objectives’ show up on the list? So you want yours, the franchisor wants theirs, the bank wants theirs, and the world turns.

Defining Your Goals

It’s solely your responsibility to create a clear definition of the goals that define what winning looks like for you. Use your definition of winning as your criteria to compare various franchise opportunities. The franchise where you have the highest probability of attaining both your financial and quality of life goals is the franchise you make an investment in.

It’s easy to lose sight of your goals. Prospective franchisees often get caught up in their perceptions of the problems and challenges of the business rather than whether or not the franchise can help them achieve their objectives with a high degree of probability.

For instance, you may be investigating a residential home-cleaning business and from talking to franchisees you hear there is a high employee turnover. Afraid that you might get stuck cleaning houses, you think, “I didn’t go to college so I can clean toilets and vacuum carpets.” Your knee-jerk reaction is to dismiss the opportunity. However, whether or not there’s employee turnover isn’t the real issue at hand. Given employee turnover, your focal point should be whether or not you can still achieve your goals with a high degree of probability.

Dig Deeper

Goal-focused prospective franchisees will dig deeper and ask questions such as:

  • What are the franchisor’s hiring and retention strategies?
  • What is the impact of turnover on the business?
  • How long does it take to find replacement help?
  • What training programmes are in place to train replacement labour?
  • How long does it take a new hire to become productive?

Every franchise has its unique challenges to overcome. Franchisors either have proven systems and a demonstrated track record for overcoming these challenges or they don’t. Dismiss those who don’t. Investigate those who do by asking questions like the ones above.

Creating Your Goals

Clear goals, whether financial or quality of life in nature, must pass the SMART test.

Specific

Goals need to be clearly articulated and written down. ‘Making a lot of money’ isn’t specific. Making R800 000 is specific. ‘Having more control over time’ is not specific. ‘Going to ten of my son’s soccer games and ten of my daughter’s dance recitals this year’ is specific.

Measurable

You have to be able to create a tracking system; a method of keeping score. This lets you know whether or not you are on track and whether you’ve achieved your goals. If your goal is to make R800 000 by the end of the year, on 30 June, you should have earned R400 000 or you may not be on track. On 31 December, you’ve either hit your income goals or you haven’t. It isn’t open to opinion or speculation.

Using the previous example, if you attend 11 soccer games, you’ve won. If you only went to six, you fell short. It isn’t open to interpretation or opinion.

Attainable

Goals must be considered both possible and worthwhile pursuits, or you won’t be motivated to achieve them. For instance, you may say your goal is to make R4 million a year, but if you have never made more than R400 000 a year, you may not really see this goal as possible and may not take aggressive steps toward achieving it. As a franchisee you may experience a 20% increase in sales, but if you think it’s going to take working 90 to 100 hours a week to achieve that goal, you may not consider it a worthwhile pursuit. And you won’t be motivated to hit this goal.

Realistic Timetable

Goals have to have a deadline, a ‘by when’ date. Goals without a deadline don’t inspire commitment. It’s human nature not to take action on anything you wish to achieve some day. Think of how long you have thought about starting a franchise. Have you set a deadline as to when you will open? If not, other more urgent activities will take precedence and your dream will be pushed further and further back.

If you don’t have a deadline as to when you are going to start, then you may have a good intention, but you don’t have a plan or a goal. A wise man once said, ‘The road to hell is paved with good intentions.’ Good intentions don’t make a difference; committed action does. You will never be called forward into committed action without a specific, measurable, attainable, and time-limited goal that’s worthy of being achieved. Activities with deadlines attached to them grab your attention and create a sense of urgency and action. For instance, you know you have to get your taxes done by 15 April. If your goal is to get your taxes done on time, 14 April will be a very productive day for you!

Goals with deadlines that are too far out also don’t inspire action. Think about something in your life that you wish will occur within the next 20 years. Are you taking action now? Think about when you bought your home. Did you think, ‘here is where I’m going to live for the next 30 years!’ or did you think, ‘this home is ideal for now.’ You aren’t wired to think more than three to seven years out. Goals with extended timelines are as useless as goals that you want to achieve ‘some day’ because they don’t inspire action. Consider setting long-term goals with a three- to five-year time limit. l

Joe Mathews has 20 years' experience in franchising, including management roles with Subway, Blimpie, Motophoto, The Entrepreneur’s Source and other national chains. He is co-author of Street Smart Franchising with Don Debolt and Deb Percival, from Entrepreneur Press. He is based in Litchfield, Conn. Follow him on Twitter: @joematty.

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Company Posts

Col’ Cacchio: A Passion For Pizza

Greg Mommsen left the IT industry to join the restaurant trade and set up Col’Cacchio Bryanston in 2003. Greg is now a director at the Col’Cacchio group and shares the success of the 25-year-old brand and his journey as both franchisor and franchisee.

Nedbank Franchising

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Greg Mommsen

Vital stats

  • Player: Greg Mommsen
  • Franchise: Col’Cacchio
  • Established: 1992
  • Visit: colcacchio.co.za

What are your daily challenges and advantages, as a franchisor, in both corporate and franchisee stores?

col-cacchio-pizza

With the ownership of corporate stores we have the opportunity to test and trial new products, IT upgrades and new innovations within our corporate structure upfront. This way we can gauge the success of these initiatives without disrupting the franchisees.

Due to the hands-on nature of Col’Cacchio restaurants, it’s proven to be successful when restaurants are owner-operated.  This becomes a challenge with the corporate stores where reliance is placed on managers to run the restaurant.

Catering to the individual needs of corporate and franchisee stores from an operational support point of view can also be challenging.

Related: Col’cacchio Holdings Launches First Base

What contributes to the success of Col’Cacchio as an iconic Italian franchise?

Italian franchise

We have taken our time to expand the brand and have rolled out new stores at a slow and steady pace. Choosing the right franchisee partners and the right sites has been key to our success and sustainability. It always remains a major focus for the brand to produce products that are best in its class, and we take great pride in having a hand-crafted and exclusive product offering.

How do you continue to stay relevant in a niche market?

pizzeria-niche-market

To ensure that we are on trend with the market, we constantly reinvent ourselves through innovation. Our menu items are updated every six months and we continually broaden our offering to ensure that we evolve to stay ahead of the curve. We strive to be the consumer favourite in Italian food and offer a premium product that is of the best quality, value and overall experience.

Col’Cacchio has a great application-based loyalty programme that puts us at the forefront of change. On-demand purchases and deliveries have become a major trend in the market and we are currently evolving our online ordering solution to accommodate this need.

Related: Col’Cacchio Launches Mio

What qualities do you require your franchisees to have?

pizza-franchise-south-africa

Our franchisees have to be resilient entrepreneurs with good business acumen. However, too much entrepreneurial flair is not ideal, as franchisees need to understand and be willing to work within the brand’s guidelines and standards.

To be a restaurateur, you have to be comfortable with non-traditional trading hours and be customer service focused.

With ample new pizza brands entering the South African market, how has this affected your business?

new pizza brands

In general, the food industry has been active with the development of new brands in South Africa. We embraced this as an opportunity to develop a smaller Col’Cacchio offering with a slightly limited menu and more focused on takeout and delivery in order to cater for this segment of the market.

We continue to focus on leveraging off the strength of our existing brand by offering the best quality handcrafted products.

The menu has expanded to include light meals and breakfast in a wide range of healthy options, including gluten- and wheat-free bases and pastas, as well as carb conscious, low calorie and vegan-friendly dishes. We’re also in the process of revamping many of our restaurants, to ensure that our stores have an updated, fresh look to increase our appeal to a wider audience across the various parts of the day.

Related: The Pros & Cons Of Owning A Restaurant Franchise

Why is it important for successful franchises to have a strong relationship with their banking partners?

v-and-a-pizza

Funding is critical to the development of new restaurants. Having a great banking partner that understands your business, the industry as well as its risks is pertinent. This plays a big role when it comes to specialised funding solutions and ensuring the application process is quick and easy.

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Company Posts

Leading SA Franchise Group Cash Crusaders Continues On Its Growth Path

The company is growing from strength to strength thanks to its recession-proof business model that is built around three profit centres – specially imported new goods, secondhand trade and secured financial lending.

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National franchise group Cash Crusaders continues to show positive growth results despite a rollercoaster economy. The 1,7-billion-rand company saw an impressive 13% year on year same store growth between 2015 and 2016 with figures remaining favourable in 2017.

The company is growing from strength to strength thanks to its recession-proof business model that is built around three profit centres – specially imported new goods, secondhand trade and secured financial lending.

New store openings

The results speak for themselves. This year, the brand opened its landmark two-hundredth store in Soweto (the second store for the area), with ten new store openings following in quick succession including Mayfield Square, Robertson, Raslouw, Vryheid, Tembisa, Parow Station and Lydenberg.

Related: What Franchise Model Is Right For You?

By the end of the year, the total of new stores is expected to reach 214.

Cash Crusaders is South Africa’s largest secondhand retailer – three times the size of its closest competitor- and hasn’t stopped growing yet, with new store openings scheduled well into 2018.

A sure thing for franchisees

The brand is seen as a lucrative business opportunity for franchisees, most of whom own more than one store.

“The investment that the franchisor makes on innovation, research and development ensures we stay ahead of competition, remain relevant in the industry and persist as a strong player over the long term,” says Franchisee Damian Ohajunwa

With a successful track record of more than 20-years, Cash Crusaders is seen as a ‘sure thing’ business opportunity by potential franchise owners who see to  benefit from a proven three-tier profit system and an existing customer base.

3 Customer drawcards

Cash Crusaders’ unique business model incorporates three distinct product offerings, namely private label new goods, secondhand goods and secured loans, all of which translate into good sales figures.

Cash Crusaders’ directly-imported private label goods include home theatre systems, home and car audio, DJ equipment, musical instruments and household appliances. For value-conscious consumers, these quality products present a less-expensive alternative to big brands, a trend that’s becoming more pronounced in South Africa’s tough economic climate.

A reliable business partner

Cash Crusaders unique business model ensures franchisees have the support they need. A highly-experienced team are on hand to offer advice, planning, training and ongoing support from day one. It’s a symbiotic relationship that benefits everyone.

Business owners form part of the Cash Crusaders network, and are equipped  with a proven system of operation, thorough training and all the tools needed to succeed. The Projects Department work closely with franchisees, giving them the full benefit of their expertise from day one.

Related: Savvy Sales Skills To Grow Your Franchise Footprint

“Set up was assisted greatly by Operational Management who was involved from the get-go, from lease negotiation to build out costings and contractor sourcing. The final quality of workmanship was exceptional,” franchisee Christo Burger.

Dedicated to raising the industry

cash-crusaders-capitalThe proudly South African brand is dedicated to empowering entrepreneurs to be in business for themselves and helping them grow every step of the way.

Cash Crusaders has also shown its commitment to raising and changing the public’s perception of the secondhand  industry by advocating honest trading and regulating secondhand trade in South Africa through its association with National Association of Franchised Secondhand Dealers (NAFSHD).

The group is also a member of The Franchise Association of South Africa (FASA) and proudly subscribes to the FASA code of ethics and business practices.

“Make no mistake, Cash Crusaders is not just another secondhand business. We maintain the highest standards and ethics, and have gone above and beyond to change the public’s perception of the secondhand trade by proudly demonstrating our honesty, integrity and legitimacy,” says Cash Crusaders CEO  Sean Stegmann.

R300 000 start-up assistance

Cash Crusaders is the only franchise group that offers financial assistance to help entrepreneurs find their feet. If a potential franchisee has R800 000 in unencumbered capital, Cash Crusaders will give them R300 000 start-up assistance to cover initial running costs. T&Cs apply.

“Franchising is our passion, and our network of Franchisees are our family. From the outset, we pledged to partner with entrepreneurs who share our vison – innovative thinkers as committed as we are to building this brand. We want to do business with you and work together to ensure the success and profitability of your business. You’ll soon come to appreciate our “Make It Happen” attitude,” says Stegmann.

dont-take-chances-on-your-store

For more information about the franchise opportunities available, please visit www.cashcrusaders.co.za

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Franchisee Advice

Want To Leave Customers Grinning And Vowing To Return? Do The Following

These five quick tips will keep your customers coming back for more.

Basil O’Hagan

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happy customers

1Admit when something has gone wrong

Customers will respect your willingness to admit a mistake and effort to rectify things.

2Focus. Pay attention to customers

Don’t go into autopilot when serving them.

Related: Zappo’s Customer Service Excellence Comes Down To Company Culture

3Aim to be an expert

Don’t just be an expert salesman – be an expert in whatever your customer is interested in. The ability to offer genuine advice (instead of a generic sales pitch) is something customers will come back for.

4Pay attention to new customers

Aim to make new customers regulars by offering the sort of service they don’t receive anywhere else. A free gift can be a good idea as well.

Related: Go Above And Beyond With Your Customer Service

5Make customers feel valued

There’s nothing worse than being ignored by staff when you’re in need of service. Always be on hand when help is needed. Never chat on the phone when a customer is waiting.

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