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Franchisees share tips, lessons learned in surviving year 1

Success is knowing as much as possible before the first year in business, and then being prepared to work long hours and sharpen networking and marketing skill sets.

Photo: iStock.com

June 27, 2017 by Judy Mottl — Editor, RetailCustomerExperience.com & DigitalSignageToday.com

Launching a franchise, whether it's a travel agency or custom apparel shop or a niche jewelry store, isn't a small undertaking, no matter what the size or scope of the business. And, as with any business, the first year is a tough one with many lessons learned.

For Alicia Thompson-Healy, her first year operating a Smallprint/Silver Pet Print franchise (a fingerprint jewelry concept that creates a range of silver keepsakes capturing a loved one's, or pet's, fingerprint/pawprint forever) brought an unexpected challenge: networking, networking and more networking. She quickly learned that sitting in her workshop in Rochester, New York wasn't doing anything to draw business.

"I can't say it enough. You have to get out in the community and be everywhere and anywhere, from local events to joining the local chamber to doing home shows," she said during a panel discussion during the International Franchise Expo held this month at the Jacob K. Javits Conference Center in New York City.

"People have to see you, you have to build relationships as word of mouth and referrals are critical and valuable. You have to be top of mind," she added.

Such intense networking activity was an immediate lesson during the first year for Jackie Pierce, who operates a Big Frog Custom T-Shirt franchise in Texas. Networking and marketing were top priorities to getting the custom apparel business growing.

"I was most challenged with marketing the image of the brand as it doesn't really indicate it's a custom apparel operation," she said with a smile. The former CPA said she had to get marketing skills in place and honed as marketing didn't come naturally.

Her success at marketing resulted in a 48 percent repeat and referral base, which is extremely high for an individual franchise, she said.

Yet for Janet Harris, who has been operating her Dream Vacations franchise in Indiana for seven years, marketing was already a big skill in place as she and her partner and husband are "born sales people."

One of her first-year challenges was the compensation stream in the travel industry – agents only get paid after clients have traveled or made the final payment.

"So, in the beginning, the cash flow was slow. It's not until the funnel fills up with booking that you have a consistent business cash flow going," she said.

One good strategy in that first year is to establish a long-term plan, even as long as a 10-year road map, said Pierce, and the franchisor should be eager and willing to do that with a franchisee.

"If they don't do that, they don't have any high growth goals or strategy," she said, adding both goals and strategy are vital to franchise success.

Thompson-Healy said her first year was a bit rocky given she didn't hire the right accountant and CPA resource at the start, and that created some stress. She also wasn't aware of how much time she would work in the first and early years.

"Be aware that the first year you have no life, the business is your life, lots of hours, especially weekends, as that's when you're networking and marketing and getting the business up and going," she said.

The big key to success, the panelists said, is knowing as much a possible beforehand – even before that first year, and spend time talking to current operating franchisees about pain points and lessons learned. Then, with all that insight, take time to plan, plan and plan.

In looking back, none of the franchisees would reverse course and undo the franchise decision.

"There are a lot of roadblocks in the first year, but with passion you can hurdle and hit your goals," said Thompson-Healy.

Looking for more great insight and expert discussion on franchising? Attend the upcoming Restaurant Franchising & Innovation Summit (RIS) taking place July 18-20 in London. This event will feature innovative chains and their strategies in growth, from menu innovation and beyond. The Restaurant Franchising & Innovation Summit will help franchisors be more progressive in many areas of their business to attract both investors and customers.

About Judy Mottl

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Judy Mottl is editor of Retail Customer Experience and Digital Signage Today. She has decades of experience as a reporter, writer and editor covering technology and business for top media including AOL, InformationWeek, InternetNews and Food Truck Operator.

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