Franchise News Release: Citrus Heights, CA - (Jun-9-2008)


Franchise Study


As published in: Franchise Times
June-July 2008
By Wendy Webb

Franchisees are less likely to fail if they have been trained effectively by the franchisor. This is the conclusion of a recent study, "Entrepreneurial Failure: The Case of Franchises," by Steve Michael, a professor of business administration at the University of Illinois at Urbana-Champaign.

Michael and Florida State University professor James Combs took a look at 90 national franchise chains with an eye toward whether those franchisors help their franchisees to succeed or contribute to their failure. The study concluded that Franchises with the best, most robust training programs have the most successful franchisees.

Michael was interested in the franchise industry specifically because becoming a franchisee increases the odds of success for the entrepreneurial businessperson who is looking to open his or her own business. Yet, some franchisees fail. Michael wanted to find out why. So he analyzed the data from those 90 national franchise chains.

"The big surprise to me was, I found that the length of the training program was significantly tied to the chance of failure," he explains. "Those franchises with the shortest franchisee training programs were more likely to fail. Those with longer programs were more likely to succeed."

Now, that's not exactly a "Man Bites Dog" headline, right? Of course franchises with great training programs succeed where others might fail. It's not exactly big news. Or is it?

I say it is big news because until relatively recently, training was viewed as the Rodney Dangerfield of the corporate boardroom – it got no respect. Sure, training was viewed as important, just not vital to bottom-line profits. This study proves otherwise. It highlights the value of training as it relates directly to a company's bottom line.

Michael's study focused on fast-food Restaurant chains, giving a nod to McDonald's Hamburger University and Dunkin' Donuts University as standouts.

Although this study spotlighted restaurant franchises, its conclusions can be extrapolated across all types of franchises.

Michael Newman, president and founder of Always Best Care Senior Services (ABC), based in Citrus Heights, California, agrees. He began Franchising his company 15 months ago – he now has 11 franchisees and 19 territories nationwide and is actively expanding that number – and says training of franchisees was paramount from the word "go." 

"We realized very early on that everything is about training," says Newman. "Franchisees need good training in order to be successful out in the field."

ABC's training is multi-layered and robust, encompassing classroom, online and in-the-field experience, along with careful follow-up. It all begins with pre-training – training before the training actually starts.

It sounds a little like a tongue-twister, but training-before-training is the key to having successful classroom sessions. Trainees get homework – basic marketing and sales modules they can do on ABC's corporate intranet and on paper. They must complete these modules before attending the training sessions. By the time franchisees sit down for their training at the corporate office, they are ready to build on what they've already learned.

Newman's trainers take franchisees through the basics of running their new companies, from making sales and marketing calls to setting up meetings with elusive clients. Not all of the training is done in the classroom, either. Trainers take franchisees into the field, showing them exactly what needs to be done from a sales and marketing perspective to help generate the revenue that will make their businesses grow.

"That way, we're building their confidence, showing them what it's like to run this business in the real world," he explains.

After that initial training at the corporate office, franchisees are sent back to their new businesses ready to hit the ground running. But the training doesn't end. For the next 45 days, franchisees must complete an additional six training modules online, talking to the corporate sales training director daily. When those six modules are complete, the training director visits the franchisee's site to work with them further, one-on-one.

"After that, we do an evaluation," Newman explains. "We tell them where their strengths are, and where they can improve."

With that completed, the franchisees follow up with weekly sessions for another 45 days to reinforce what they've learned.

And that's just core sales and marketing training. Once franchisees are fully trained on the core topics, they receiving additional online training on the nuts and bolts of running the office – accounting, payroll and the like.

"Every Friday, we do a group online session on a different training topic," Newman says.

The result, for Newman's company, is a well-trained group of franchisees who are succeeding in their own businesses.



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