Terry: There's systems in all aspects of a franchise. The systems related to hiring are there and utilized because they get predictable results. It saves that franchisee time and effort in hiring and bringing on new employees. The reason systems work so well is because they're predictable. We could use the example of McDonald's having an employment situation that if I said to you, “Would you like a business that has a 300% employee turn over and there are employees in your operation 24 hours a day and typically the ages are teenagers or senior citizens, what do you think?” Most people would say, “Why would I bother?” McDonald's has created a system that allows franchisees to succeed with those kinds of variables.
Clay: That's amazing. If you're watching this. That's just one example but I mean, you spout that stuff off because you've done this for so long and to me it's like a fire hose of knowledge. It's just overwhelming. You're saying something like McDonald's has a 300% turn over. They're turning their whole staff 3 times a year and then the other things you said is they have a staff of teenage workers –
Terry: Teenagers or senior citizens. They're in that operation 24 hours a day because when they're not open there's a team in there cleaning and prepping for the next crew in the morning. You can't be there 24 hours a day. Without a system for hiring and managing those employees that business would never succeed.
Clay: That blows my mind. That's just amazing. That's amazing. Well okay. The next thing we're talking about is the point number 9 is standardized effective marketing materials. That comes with the package. You get standardized effective marketing materials. Why is that such a benefit in your mind for franchisees?
Terry: That's sort of the Achilles heal of most new business owners is marketing and investing in marketing. They sometimes miss that equation or they'll skimp on that or they'll say well, “I'll invest that level once I have business coming in the door.” What they don't realize is that there's a formula of how much you have to invest in advance of that business coming through the door. The marketing plans and marketing materials and the launch strategy of that franchise is well thought out to get that business up and running and generating dollars in the cash register a lot faster. Those materials are put together and tested. They don't just come up with an idea and throw it into the franchise system. They're actually tested and proven before they're used.
Clay: One of my friends, he's a franchisor. He owns the actually company that now sells the franchises and one of the things that he's done is he has a couple local markets where he tests the print materials on his own, on the franchises that he actually owns himself. He tests them and he finds out what doesn't work and what does work. Once it works and it's then he distributes it out to the franchisees and it's great because they don't have to go through the trial and error phase. I just don't think that people realize how awesome and how important that is. I know for me, Terry, I didn't have the money needed to auto-wrap my vehicle professionally or to do some of the graphics I needed. I hand a Mazda MPV van and it looked awful but it made the phone ring. Sometimes for the wrong reasons. Again, had I had these systems I think I could have gotten there faster. I love that. The con of that is that some franchisees may feel there's less room for creativity.
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Terry: Yes. That is one of the things that we hear frequently is there's no room for creativity in a franchise system. Depending on how creative you want to be. The beauty is that related to marketing is what I tell clients all the time. Where you get your creativity is in the marketing and business development side. There is aspects in all franchises to be creative. Especially as it relates to your local and regional markets. Getting out there. Using some of the proven materials in a creative way and customizing it to your own creativity to build your own business.
Clay: You're saying that you can be creative but in 2 areas. Can you outline those 2 areas again just so I get a better understanding of what –
Terry: How you market and do business development in your brand. Franchisors will have a myriad of things that are allowable from a standpoint of marketing. So many that not one franchisee is going to be able to deploy all of them.
Terry: They know franchisees will be creative in that result and they'll be drawn to certain ways of doing it.
Clay: Maybe if I bought a franchise, maybe I want to do billboards and mailers and maybe you want to do TV commercials. We get to choose which avenue we're going to use there.
Terry: Yeah. That's some aspects of creativity come into play that allow you to go out and do some regionalized and local campaigns within the community to really draw that community and your business together.
Clay: I've always found too in business, because I've been doing this forever, I've been self-employed since I was like 16. I have found that whenever I'm the most creative with the marketing that's when it's the most painful. I have to discover what works and what doesn't. I've come to love systems over the years. I've come to get to the point where I just, Shoot me what works. I'll do it, great. To me I like the creativity with what I can do with the money I make as a result of the profit. I like to creative with that money that I make as apposed to being creative on crazy ideas that might or might not work.
Terry: That may or may not work. Exactly.