Franchising: war is sell – running a successful franchise business – includes related article on franchisors

Carol Steinberg

You think it’s coincidence that Kentucky Fried Chicken was led by a colonel? When it comes to running a franchise, many look to enlist the military

The cold war is long over We are in a new age of peace and prosperity. There is talk that any future wars will be waged not with tanks and guns but with remote-controlled RoboJets and enemy computer viruses. So, when our nation’s armies are disbanded and replaced by Windows 99, where can the skills of our military geniuses be best put to use?

In a word: McDonald’s.

It just so happens that the military mind excels not only at terminating the enemy with extreme prejudice but also at running a successful franchise. Consider the similarities. In any franchise there exists a proven, time-honored methodology to be embraced. An individual can command a single unit or a vast array of divisions (Men, too, there are those stifling uniforms) And if your competition advances too far, you can nuke their sorry butts into oblivion — figuratively speaking, of course.

Even more important, the teamwork and discipline instilled in the military go a long way in the process of building a successful franchise. “Military people understand what it is to take a system and make it work,” says Howard Bassuk, chairman of Franchise Network (FranNet), a franchisor-franchisee matchmaking service based in San Diego. “Military command is a pretty good model for a franchisee.”

Of course there’s much more to the franchise world than burgers and fries: home furnishings, office services, even baby-sitting. If you can think of it, someone’s franchised it. Here are some tips from the front lines on how to transfer military experience into a successful franchising career.

CALL UP YOUR RESERVES. Put those particular skills you’ve learned in the military to good use, says reserve army major Carl S. Savino, president of Corporate Placements Inc., a national search firm in Fairfax Station, Va., that specializes in finding military-to-civilian employment. “People should look back at the type of work experience they’ve had and ask, Is this a natural progression?”

Wendy Rogers took that approach. As one of the first female pilots in the air force, she’d flown six-passenger planes transporting VIPs and intelligence information across Europe as well as large jets carrying cargo and troops to the Far East. Her husband, Hal Kunnen, had worked on classified electronics surveillance and battle-management systems. After 20-year careers that spanned the globe, they wanted to give their two young children a stable home base. But at 43 and 46, respectively, Rogers and Kunnen were too young to sit rocking on a front porch somewhere. “We were looking for a business that could tap into both our talents,” says Rogers, a lieutenant colonel.

While stationed in Germany, Rogers perused a franchise directory and found HouseMaster, a home-inspection service that makes sure buildings are structurally sound before real-estate closings. “The name jumped out at me,” she says. Thinking back to the communications skills she’d developed as an aviator while radioing ground patrols during high-pressure situations, Rogers envisaged herself doing the marketing at a HouseMaster franchise. And she saw Kunnen using his electrical-engineering background as he inspected homes (“You call this a functioning circuit breaker, private?).

As it turned out, a franchise was for sale in Mesa, Ariz., where they already owned a house. In May they bought the franchise. By October they had already earned back their $19,000 investment and were on target for $45,000 in first-year sales. (Talk about allied forces!)

RALLY THE TROOPS. Each morning when Jim Burnett’s 21 employees report for work at his Merry Maids franchise in Las Cruces, N.M., he splits them into two-person teams. Instead of discharging radios and M-16s, he hands them vacuum cleaners. Then, as in the military, he inspects their uniforms, haircuts, and grooming. After 15 minutes of training, they’re off on their assignments. “Uniformity is everything,” he says.

The habit of stockpiling provisions during his experience in the military taught Burnett to anticipate his future needs so that he could increase his capability at a second’s notice. In Desert Storm, for instance, equipment was pre-positioned offshore and in Europe, and personnel, including Burnett, were rushed in later, when they were required. “It takes you to mission capability much quicker,” he observes.

So, instead of buying the two equipment kits Merry Maids recommended, he bought six and advertised for employees. Within six months, he had six teams cleaning houses: “You build the organization that has the capability you want, and it will be able to accomplish the mission — in this case, to gain and retain customers.”

LIVE BY A STRICT CODE. Burnett is quite serious about enforcing Merry Maids’s mission statement and making sure that all employees understand it. He drills military standards into them: quality, reliability, and honesty. “The strongest tools for leading people are positive and negative incentives, including sanctions,” he says. He gives employees a $10 weekly bonus if they follow seven rules designed to win customers and hold them; they range from always carrying a driver’s license to not breaking customers’ property. Among the negative sanctions are withholding praise and making less attractive assignments. (We hear that he also keeps a large barrel of potatoes in a back storeroom.)

His running his business like a military organization — despite, Burnett admits, “an incredibly negative connotation to some people” — has paid off. He prides himself on the cohesiveness and steady attendance of his employees. “They would no more come through the door without a complete uniform than fly to the moon,” he adds. And each week he fields 10 to 20 job applications. In October he bought a struggling Merry Maids franchise in El Paso, Tex., which he hopes to whip into shape.

DRILL ‘EM LIKE A SERGEANT. Remember the way your military superiors would give you “constructive criticism” — also known as “the hot wash” — whether you wanted it or not? Well, this method can be just as useful if you’re operating a franchise. Every afternoon Rogers and Kunnen put themselves through the wringer by asking clients for feedback on how they’re running their business. When referral sources like real-estate and insurance agents told them that they weren’t mentioning the HouseMaster name enough in conversations, they made a conscious effort to say it more often so that it would stick in their customers’ minds. Tip: When giving “constructive criticism” to civilian employees, it’s best to avoid language like “screw-heads,” “yellow-bellied toad suckers,” and “Did your mother have any children that lived?”

SPIT AND POLISH. Whenever Rogers makes a presentation to the real-estate and insurance agencies that steer clients her way she strives to create an image of effectiveness. That means beginning her talk by showing a slide of herself in a green flight suit on the steps of a T-38 jet: “I tell them they have the trustworthiness and integrity of two retired air force officers.”

And she holds herself to high standards that reinforce this image in addition to maintaining an impeccable dress code, she and Kunnen always address customers as “Mr.,” “Ms.”, or “Mrs.” and make a point of returning phone calls promptly. (Saluting your customers, however isn’t recommended.)

WHATEVER DOESN’T KILL YOU MAKES YOU STRONGER. Sometimes you can even use a war injury to your benefit. For example, Mark Alma joined the service to pay for his college education and served three years. But in 1992, just as his inactive duty was about to expire, he was called for Desert Storm. In Saudi Arabia his jeep ran across a land mine and flipped over, he sustained seven herniated disks in his back. After two rounds of surgery, Alma wanted to get on with his life.

“I considered a franchise because most are proven formulas,” says Alma, now 34. While discussing his options with a franchise head-hunter, he happened upon Relax The Back, a chain of stores that sells products designed to prevent and alleviate back pain (ergonomically correct chairs and the like). Alma knew firsthand how useful such items could be. In 1994 he and a partner, James Englert, borrowed $150,000 on a dozen credit cards and opened a store in North Tampa, Fla. Today they own four stores and do $2 million in annual sales. Alma says his experience using his own wares has allowed him an edge: “It has given me confidence in what we sell, and I can instill that in managers and salespeople.”

And if not — well, he can always terminate them with extreme prejudice.

RELATED ARTICLE: Franchisors Who Want YOU

Soldiers are always welcome to join the ranks at these chains. Assuming that you didn’t serve against your will, if you have a military background, you’ll probably be happier in a franchise chain where the atmosphere is soldier-friendly. Howard Bassuk of FranNet finds that veterans favor companies that emphasize the kind of teamwork and on-the-job safety that are prized in the military and particularly those firms that cultivate a “sense of contribution, family, and belonging — God and country.” For example, when Wendy Rogers, now a HouseMaster franchisee, first called two former military people who’d become franchisees in the chain, phrases and words like family-oriented approach, cutting-edge technology, support and integrity hit home: “These are all intrinsics we expect in the military.” Here are some companies that make an effort to recruit some of the 275,000 veterans who march off military bases every year.

A & W Restaurants Inc. 17197 N. Laurel Park Dr., Suite 500, Livonia, MI 48152; 313-462-0029 Description: Hamburger and hot-dog restaurants Franchise fee: $20,000 (Total investment: $200,000 to $800,000) Number of franchises: 1,000 (190 company-owned) Year established: 1919

American Speedy Printing Centers Inc. 1800 W. Maple Rd., Troy, MI 48084; 800-726-9050 Description: Shops that specialize in quick-turnaround, short-run printing Franchise fee. $50,000 to $70,000 (Total investment $198,000 to $202,000) Number of franchises: 435 Year established: 1976

HouseMaster 421 W. Union Ave., Bound Brook, NJ 08805; 800-526-3939 Description: Service that performs inspections before real-estate closings to make sure homes are structurally sound Franchise fee: $8,500 to $24,000 (Total investment $15,000 to $42,000) Number of franchises: 292 Year established: 1979

Merry Maids 860 Ridge Lake Blvd., Memphis, TN 38120; 800-637-7962 Description: Professional cleaning of homes, apartments, and condos Franchise fee: $13,500 to $21,500 (Total investment: $24,850 to $41,350) Number of franchises: 856 Year established: 1979

Rainbow International Carpet, Dyeing & Cleaning Co. 1010 N. University Parks Dr., Waco, TX 76707; 254-745-2444 Description: Service that performs carpet cleaning, dyeing, repairing, and reinstalling and also offers upholstery, drapery, and ceiling cleaning, deodorization services, and water- and smoke-damage restoration services for residential and commercial buildings Franchise fee: $15,000 (Total investment $29,000 to $86,000) Number of franchises: 550 Year established: 1980

Relax The Back Corp. 2101 Rosecrans Ave., Suite 1250, El Segundo, CA 90245; 800-290-2225 or 310-416-1077 Description: Retail stores that sell products designed to alleviate back pain Franchise fee: $25,000 (Total investment: $126,100 to $239,100) Number of franchises: 100 (15 company-owned) Year established: 1988

RELATED ARTICLE: Does This Franchise Pass Muster?

How to give a company a proper military inspection.

Even if a chain goes out of its way to cater to veterans, you need to evaluate it as thoroughly as you would a field studded with land mines. Consider these three key factors before you sign any contracts.

THE SUPPORT. Younger franchise companies are not always as carefully structured as older ones. Army major Carl S. Savino, who specializes in the placement of persons formerly in the military, suggests that prospective franchisees survey at least 10 percent of current franchisees in a system by phone or through in-person interviews. Some important questions to ask: How supportive is the franchisor? Does the company provide benefits in training that make it easier for franchisees to succeed? What is its track record?

Jerry Bergler, executive vice president at American Speedy Printing Centers Inc. in Troy, Mich., finds that although former military persons bring more discipline to their operations than the aver-age franchisee does, a lack of support can pose a problem. “What they struggle with is that they’re accustomed to having a lot more backup.” Like, for instance, the military arm of the most powerful nation on earth.

The investment. A franchise requires an up-front investment and ongoing working capital. Since undercapitalization often leads to small-business failure, franchisors like the fact that former military people have retirement income. “It gives them the freedom to build the business at a pace without pressure,” says Mike Hawkins, who oversees military recruitment for the Dwyer Group in Waco, Tex.

Nonetheless, you shouldn’t take lightly a decision to tap your retirement funds. Think hard about how much you can afford to set aside for your business and how much you need to provide for your family.

THE COMMITMENT. As in the military, anyone who goes into his own business can expect to work more than an eight-to-five shift. If that was one part of the service you didn’t like, you may want to reconsider going into the franchise business. (Hey, there are always CIA black-op missions to fall back on.)

COPYRIGHT 1998 Success Holdings Company, LLC

COPYRIGHT 2000 Gale Group

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