It may sound counter intuitive, but this attitude is one of the marks of a good, strong franchise company.
There are plenty of franchise companies where the only requirements to become a franchisee are that you can fog a mirror and your check for the initial franchise fee doesn’t bounce. Take a minute and consider which one sounds like the more effective approach to you.
Successful franchise companies want any new franchisee to do well. They have developed a set of standards, based on their past experience, that they know new franchisees should meet to maximise their likelihood of success.
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They will not accept any new franchisee unless he or she meets these standards, because they know it’s not fair to either party to do otherwise. Though these standards vary from franchise to franchise, there are four main categories all these standards seem to fall into. These are:
Everyone understands that going into any new business without the necessary capital resources is a recipe for disaster. One of the things any good franchise company will do is require a new franchise to have sufficient net worth and liquidity, to avoid this becoming an issue.
When a prospective franchisee looks financially tight (but otherwise attractive to the franchisor), they will often require that the new franchisee obtain any necessary financing prior to approving them as a new franchisee.
Good franchisors assume you will act in the same manner if you become a new franchisee as you are acting while you are a prospective franchisee. They will be making judgments about you based on your behaviour while you are investigating the franchise.
They will be asking lots of questions like:
- Are you serious?
- Are you focused?
- Are you diligent?
- Are you a great person to deal with or are you a pain in the rear?
- Can you set goals and meet them?
- Can you make a decision when you need to?
These are attributes that successful franchisees tend to have, and they will be watching you to see if you have them as well.
3. General skills and experience
These are the characteristics that virtually all franchise opportunities need from their franchisees. How strong are your leadership skills? How much business experience do you have? What types? Have you effectively managed employees (or other comparable groups, like children) in the past?
How good are your communication skills? Since a franchisee will end up being the “boss”of his or her new business, these general characteristics are vital to a good franchisor.
4. Specific skills and experience
This is the category that is typically least important to a good franchisor. You may think it’s an advantage if you already know a method to deliver the product or service in an industry you’re considering, but usually the opposite is true.
Many franchisors feel getting a new franchisee to unlearn specific skills that don’t match their operating system is much more difficult than just starting from scratch and teaching the necessary skills to someone with no experience in their industry.
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They’d rather have a blank slate to write on when it comes to this factor, though there are certainly a few exceptions to this general rule.
As you consider any franchise opportunity, a wonderful and telling question to ask the franchisor is, “What is the profile of a successful franchisee in your business, and what are your requirements for qualification as a new franchisee?” If the franchisor doesn’t seem to have this answer readily available, watch out.
In all likelihood, they are just throwing darts to see if they get lucky and hit a balloon. Don’t play this game unless you are prepared to lose – look for the franchisor that can tell you exactly what a person needs to be successful in their system.
Are You On Your Team’s Wavelength?
Success means being a team player as well as a team leader.
Remember that old interview question, “Are you a team player?” When you run your own business you are the team leader – the captain and the coach rolled into one usually. But on top of that, you also need to be a team player.
That means more than squeezing into your bulging To Do list automated, one-size-fits-all birthday messages or the occasionally staff party. Yes, staff lunch out, a braai at the office or a few drinks after work are good ways to put the work stresses aside and get to know your staff better.
Those basic bonding exercises are taken for granted now. In reality, any wow factor was fleeting in the first place. The days since the automatic birthday greeting impressed any employee are at least one generation back and Victorian industrialists had extensive staff entertainment programmes.
What never goes out of fashion, though, is proving to staff that you are an active part of the team, not just a figurehead. I have now been with Cash Converters for almost 25 years and nearly every day, I say a thank you for the fact that I learned the business from the ground floor up by launching our first pilot franchise.
That quarter-century of experience has shown me that leading a team proactively means you need to be:
This is more than rushing through the shop floor late for your next meeting and focused far away from the employees you are passing by. It is more than just being spotted in the hallway between your office and the carpark or even waving or nodding a greeting to an employee.
In the know
Taking the easy route here is initiating a conversation about the latest sports scores. More personalised is to ask how a staff member’s house move has gone or a child is settling into a new school. It is good for you to be reminded why your employee works for you and for your employee to know that you are aware of him or her having a life beyond a work role.
The time-and-motion pioneers who emerged after the Second World War to translate regimented army mentalities into greater industrial efficiency and productivity have long since been discredited. It rapidly became obvious that workers object to being treated like different parts of a machine.
Staff want to be treated like the human beings they are by someone who has the courage to show their own human side. In your conversations with staff, this also means showing how you are aware of the work they are doing and what they are contributing to your business.
Staff respect a boss who gives the team motivational talk and then rolls up his or her sleeves to spend some time helping accelerate the push to a new goal. As team leader, ideally you should understand and be able to carry out any job within the team. Some of the tasks might not be your speciality but keeping up to date with new techniques, materials or needs in each area means that you can make better strategic decisions.
This is about more than the capital, skills and time you have invested in growing the business. It is about sharing key goals as well as daily tasks so that your staff feel they are investing their working lives in a shared project – and so share the insights and inspirations that could be the next important key that makes your business run more smoothly and productively.
Meet Jan Grobler: Serial entrepreneur, Advocate, And Job Creator
It is the authors’ sincere hope that young South-African entrepreneurs will learn from wiser business men such as Jan Grobler and co-create a vibrant and legacy driven entrepreneurial environment in our country.
Jan Grobler has either directly or indirectly created 10 000 jobs and he is not done with forming a lasting legacy. The author can call on various titles in an attempt to describe this serial entrepreneur: Advocate, Founder, Franchisor and Project manager, yet no label can fully embody his unique skill set, experience, and entrepreneurial spirit.
As a highly enthusiastic observer of business leadership traits in others, I noticed Jan’s’ strong willed and passionate intent to create more businesses, ignite exponential growth within them, and ultimately deliver numerous job opportunities to South-Africans, from the onset of the interview.
As an advocate and MBA graduate Jan had a solid academic foundation that served him well on his entrepreneurial journey. “Working back” the bursary he had from Sanlam he values the learning he received from older and wiser entrepreneurs that he had established trusts for. He learnt to be a good listener and increase his emotional intelligence by making mental notes when the older entrepreneurs imparted some of their wisdom and experience and then taking action on the accumulated learnings.
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The value of being a “Global Citizen”
Jan is a global citizen and has “back packed in 46 countries” accumulating cultural and business learnings as he travelled. He shared an example of waitresses in a South-American country “doubling up” as secretaries offering additional services such as fax and the recording of minutes of meetings thereby adding more dimensions, services, and income streams to a coffee shop operation.
The words rolled of his tongue with enthusiasm as he described how modern times has provided multi-dimensional opportunities for an entrepreneur such as being in your office in Centurion, South-Africa, purchasing products online from China , and then selling online to purchasers in Italy. Jan sees the future of franchising in South Africa as moving more and more towards “mobile outlets”. He has extensively researched the international “mobile franchising market” and is very excited about the possibilities for growth in South-Africa with regards to this market segment.
He is one of the founders of Fit chef and is currently developing the franchise system “Cafe2go”(Mainly a mobile concept) of which there are currently twenty five outlets. On his entrepreneurial journey Jan has developed eighteen brands of which he was a cofounder and as a contracted project manager he has assisted in facilitating the exponential growth of hundreds more companies.
Channels and revenue streams
As the aroma and taste of another Cafe2go Cappuccino held my attention Jan elaborated on four more revolutionary franchising concepts that he is co-developing. He said that success in business is highly dependant upon doing things better than others and offering a unique service and product.
Jan pointed out that he sees himself as a “channel creator” and it was clear to the author that through his vast experience and entrepreneurial acumen he has a high vantage point from which to see opportunities for the creation various funding models, sales channels and revenue streams, that combined causes exponential business growth.
This entrepreneur is very proud of his first start-up company of which he is still the CEO called Curator. Curator was started to, and still does assist entrepreneurs to grow their businesses, whether it be through growth interventions or for example raising capital or franchising the business.
Jan has never stopped learning whether it be from learnings accumulated from engaging other entrepreneurs or knowledge obtained from books. More importantly he continues to apply this learning in helping businesses to grow and create more and more jobs. Jan is building a legacy that any entrepreneur can be proud of. It is the authors’ sincere hope that young South-African entrepreneurs will learn from wiser business men such as Jan and co-create a vibrant and legacy driven entrepreneurial environment in our country.
Growing A Successful Trappers Franchise Into A R300 Million Business
When Grant Ponting took over the Trappers franchise in 2003, he faced one overriding challenge: 16 franchisees who were used to doing things their own way. To build a strong, cohesive group geared for growth, he needed to win their trust and prove that business is better when you work together. Today, Trappers has 34 stores and a turnover of R300 million. Here’s how.
- Players: Grant Ponting (MD) and John Black (Head of Retail)
- Company: Trappers
- What they do: Lifestyle and outdoor retail franchise
- Turnover: R300 million
- Number of stores: 34
- Visit: www.trappers.co.za
Every business has strengths and weaknesses. Successful companies learn to recognise and mitigate their weaknesses, while building on their strengths.
When Grant Ponting and his brother Mark bought the Trappers franchise group in 2003, their first priority was to determine the business’s strengths and weaknesses, and what it would take to build a strong cohesive franchise group.
At the time, Trappers’ turnover was R25 million with 16 franchised stores. Today, it has 34 stores and a turnover of R300 million. Not only has the number of stores doubled, but average store turnover has quadrupled.
This didn’t happen overnight. It took careful planning, patience, building up trust and delivering on promises — and above all it required clear and focused goals.
Finding the strength in weaknesses
Both Grant and Mark were familiar with the Trappers brand before they invested in it. Having grown up in Nelspruit and attended university in Kwa-Zulu Natal, they knew the Pietermaritzburg and Nelspruit stores, and their owners. It was a strong brand that filled a niche in farming communities, but it didn’t have a retail footprint in larger South African cities.
“My family were consulting for the Nelspruit store,” explains Grant. “The business had three separate shareholders. The franchised stores were loosely affiliated, with no strong head office system guiding the brand’s strategy or overall positioning.
“We believed that the brand had legs, and that we could leverage its strong heritage and grow it beyond 16 stores through a franchise model,” he says. “We realised that we may lose stores who did not buy into our vision at the time, but we also knew that making these necessary changes at that time was critical for the business to grow.”
“One of the strengths of the brand was how well each store owner knew and engaged with their community,” says John Black, who bought shares in the business in 2011. “These were community stores run by entrepreneurially-minded people. But they were not used to being told what to do by a brand head office.
“All 16 stores operated independently. Our goal was to centralise the company, create a clear strategy and disseminate it to our franchisees, bringing all the benefits of a franchise with it, including economies of scale.”
Developing relationships with your franchisees
The idea seemed simple. The reality was not. “There was pushback,” says Grant. The store owners Grant and John were attempting to woo to their way of thinking hadn’t joined a fully formed franchise. “They were there because they were good entrepreneurs. We needed to use that, not fight it; that’s what had brought the brand to where it was, and we liked the brand. But we also knew that any real growth would only come if we were able to forge a strong, unified franchise business.”
The very thing that gave Trappers its strength was also the biggest barrier to its growth as a brand. “We knew we needed to win them over. They had to trust us if this was going to work. If we could harness their entrepreneurial spirit and also create a consistency in the brand and its offering, we’d build an incredibly strong business.”
Grant and John’s mission was simple: Find a way to create a balance that encouraged individual store owners to take guidance, input and leverage what head office put in place but still maintain their individual, entrepreneurial spirits, running competitively in their towns, understanding their markets, and responding to local needs.
“We lost a few at the beginning. Some because the model was never going to work for them. Others because we recommended they de-franchise their stores. We were too far away from them, and didn’t believe we could give them proper support while we were consolidating the business. It was in both of our best interests to part ways,” says Grant. “We also knew that those remaining would have our full support.”
They needed to convince their franchisees that their strategy and credibility would change each store owner’s business for the better.
“We started by providing them with exclusive product ranges via a head office-owned wholesale business, in addition to exclusive deals and product ranges in partnership with key suppliers to the group,” says John. Today, John heads up the retail operations of the business.
“As the business grew, the group was not only achieving better pricing, but opportunities to expand into exclusive ranges presented themselves more regularly, which in turn resulted in the development of a centralised merchandising and IT model,” explains Grant.
“We also needed to create a consistent marketing message. There had been no consistent strategy or brand identity. Everything was localised. While that’s good — you want strong, focused localised marketing — you also need a unified brand message. The key is to be consistent and centralised.”
As these started to improve, there were economies of scale, which brought with them cost savings, service enhancements, banking benefits and gift vouchers. “We could do cost-effective group SMS campaigns, packaging, staff uniforms — these are all costs that add up,” explains Grant. “They’re also small brand touchpoints that don’t massively shift brand experience alone, but together create a consistent and recognisable brand experience.”
“Once you get everyone swimming in the same direction, you enter a safe haven,” adds John. “There’s comfort and support that a franchise brings its members. As a group we are far more powerful together, which is critical in this economy.”
“In a competitive market, the more leadership we can provide, the better,” says Grant. “Retail 20 years ago was simple: You just had to be a good retailer. Now you need a social media expert, legal experts, marketing — all of these are specialised services. It’s tough for a single store operator. Then, if you bought well and delivered good customer service, you did well. Now, there are so many complexities. You might be a good retailer, but you’ll still have gaps. A strong head office can fill these, either internally or with service providers, and costs and learnings are shared.
“There’s a lot of information that can be shared between franchisees through workshops and conferences. We also play a key role when it comes to third parties — landlords and suppliers are more accommodating and trusting of a store that’s part of a group.”
Fostering trust and transparency in your value chain
Trappers’ success has been based on trust and transparency throughout the value chain. “In the beginning, we gave more than we took,” says Grant. “Sometimes this was to our detriment, but it empowered our franchisees. We wouldn’t be where we are today if we hadn’t. We couldn’t afford to lose franchisees, and so we took our time building their trust. We listened to them, and slowly put what we needed in place.
“We ended up compromising a lot, but it was necessary. As we proved ourselves and earned our franchisees’ trust, we were able to put more wide-reaching systems and processes in place, working with their knowledge of their communities and shoppers. Our compromises cemented a culture of working together. We’ve centralised the business, and costs and efficiencies are streamlined, but we’ve also got an empowered group of franchisees.”
According to Grant, if a franchisor is providing more than franchisees are paying the franchisor, you’re in a good position. “If it reverses, that’s incredibly short-sighted — especially if you’re trying to maximise something in the short-term, to the detriment of your future relationships with your franchisees.
“At the end of the day, we won our franchisees over with an increasingly trusting relationship; this has been the critical success factor in our relationship with our franchisees.”
Refocusing on what matters
Alongside the franchising growth strategy was a retail strategy. From the beginning, Grant focused on building franchisee trust while shifting from a wholesale to a retail model.
When the business was acquired in 2003, it had no head office-owned stores. Under Grant and John, this has grown to ten head office stores and 24 franchised stores.
When Mark exited the business in 2012, John’s role was to focus on the growth and management of the retail side of the business, having come from a major corporate retail background. “This has always been an important element of the strategy,” explains Grant. “Head office stores are necessary for scale. You need both. Corporate stores allow you to influence the overall direction of the business, experience what your franchisees are experiencing daily, and they are revenue generators.
Finding the balance when dealing with franchisees
“You also need to secure products at competitive prices, and for this you need scale. We needed to expand corporate store space to strengthen our buying power, which was essential when we were winning the trust of our franchisees and proving the benefits of a strong franchise model.”
But there’s a balance too. “In this, as in everything else, transparency is key,” says John. “We don’t dictate to our franchisees. We encourage them to test products within predetermined boundaries, and we do the same in our corporate stores. When they test a product that works they let us know, and vice versa. Not all tests are successful. Retail is a mix of art and science. We don’t want to do anything that negatively impacts all 34 stores, which is why tests are important. This is a benefit of a franchise system — you can learn from each other.”
True to the Trappers ethos, the brand follows a mixed system of autonomy and franchisor support. “It’s not a cookie-cutter template,” explains Grant. “What works in Joburg’s northern suburbs doesn’t necessarily work in Upington. We cater to local communities.”
Slowly but surely, Trappers developed into a strong, successful franchise group, but another hurdle loomed. “In the early 2000s retail in South Africa was easy,” says Grant. “Our focus was on building the franchise, but the retailing side was slightly easier. Loads of trends (like hand held GPS units and wearables) were taking hold at the time, and with a lack of focus our range assortments and the company’s reliance on a few very successful brands became a concern.”
And then the world changed. The 2008 recession reached local shores, impacting retailers. “Some of these trends slowed down or dried up completely, and we realised that we needed to refocus. We had to ask: What are we not doing, that we were doing ten years ago?
The importance of brand heritage
As a business, Trappers needed to refocus on its original and core customer profile, understanding that a brand’s heritage is often imperative to its success.
“We had followed trends and forgotten our customer base, which left us exposed,” says Grant. “You need to know who your customer is, and focus on that niche first.
“We don’t follow competitors. We focus instead on the true Trappers customer. That’s our north star. Who is our customer and what do they want? That’s the question at the heart of our retail strategy, and we ask it daily. Our core customers don’t change, but their needs do, and so it’s important to stay abreast of those changes and check in with them; listen to them.”
“This requires communication between us and the franchisees. “The more we share about our customers, the stronger we are as a brand.”
Where to next?
Trappers is currently in eight of the nine provinces. “We initially focused on areas close to our base, but once we strengthened the franchise and corporate store base, we branched out,” says Grant.
“We’re now looking to grow in the Eastern and Western Cape, and as far afield as Namibia. We’ve consolidated our base. The next phase is to continue to identify geographical and financially sensible pockets of our market that we are not currently located in and place either a franchise or a company owned store in these areas that best satisfy our core customer needs.”
Use strengths to your advantage
Every business has unique strengths — are you using yours? For Trappers, the entrepreneurial nature of its franchisees means store owners who really understand their local communities. Individual stores who cater to their communities isn’t the usual franchise model, but Trappers is making it work to their advantage.
Don’t lose your north star
Every brand needs a guiding principle and an ideal customer profile. If you lose sight of this, it’s easy for your products and services to stray away from your core. In today’s competitive environment, knowing your core is a key differentiator.
Compromises earn trust
Whether you’re working with clients, employees or franchisees, trust and transparency are the building blocks of a good relationship. Sometimes you have to give more than you get to build that trust, and prove that you’re willing to put the relationship and others needs ahead of your own.
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