with guest Dan Castellini #FranchiseSecrets Ep 41
The Franchise industry is forever evolving. Strategies and structure pour in and out of franchises on a regular basis. How do we know what strategies to pursue? How do we know which franchises to pursue? There is such a widespread amount of business models, growth opportunities and all around focus of franchises that it can be overwhelming when trying to move forward with a franchise.
What if we could give you some personal insight that we have learned over the years to help guide you towards the right path when making a franchise decision. Dan Castellini is a friend of mine whom I have pursued many business relationships with. We have both had our fair amount of experience together in the franchise industry and were sharing it all with you this week. We have watched the franchise industry evolve from the founders, the landscape and growth strategies. Dan shares how through whatever evolvement that takes place, building a team and relationships are key no matter what stage the franchise world or how much more complex it becomes.
The Evolvement of Founders
Just recently, we have found that franchises are frequently being transitioned towards private equity. Even sometimes franchises are being built, just to be sold to private equity. Years ago, when we first started with franchising, franchises were primarily built by a founder who had a passion or some sort of background ties within the specific industry. Whereas now, it seems that franchises are being turned over at a much faster pace. Due to this it can sometimes be hard to identify if investing in a certain franchise is a smart move. How do we know what the purpose of a franchise is, how do we know if the intentions are leading towards a private equity, and is this a good or bad thing? Do not be alarmed if you hear a franchise is now owned or being transitioned to a private equity. This is not always a bad thing, but there are some strategies and ques to look for before truly knowing if this move is in the best interest of a franchise or for the franchisees. Dan helps us to identify and understand these ques before jumping into an organization.
Strategies are key within a franchise. They are key when it comes to choosing and growing with a franchise. One key point Dan helps me to uncover during this episode is the importance of building relationships with owners, franchisees and even support people or top dogs within a franchise. We discuss real life encounters on the effects that building these relationships have had on us, and the overall success of the franchise.
Dan and I have entered various types of franchises together. From each franchise we have endeavored, we have taken away strategies that we find to be successful and implement them still today. We discuss the ups and downs of the first franchise we ever bought into. Although now, we are able to identify some of the flawed strategies that came with this early franchise… we are also able to appreciate specific strategies they used and the ways that the franchise did grow. If you are having trouble identifying which strategy to take in any step of your franchise experience, this episode is definitely one that you will seek advice and mentorship with.
How the Evolvement has Taught us What Characteristics to Seek
Throughout our experience with the evolvement of franchises, one major takeaway we gained was the ability to differentiate what characteristics are beneficial. It is important to seek the characteristics when it comes not only a franchise, but the founders, the growth and the brands.
We often assume that franchise growth is a characteristic that illustrates franchise success. However, this is a big false. Now, especially with private equities being involved, the growth rate of a franchise is sped up and not always backed up with success. So, what do we look for in a private equity firm, how do we know if their intentions or outcomes will be successful? Dan shares in perfect words with his experiences, exactly what are good characteristics of a private equity being involved with a franchise. There are positive aspects of a company pivoting to a private equity firm, but sometimes it can be negative. We learn this week that this also goes for the brand, founder and franchisees… we must seek out the characteristics and insight of all of these before diving in.
Can You Align with a Franchise and Their Evolvement?
Once we learn all of the necessary characteristics, we must evaluate if we align. Aligning with a company’s focus is the only way to ease into a comfortable and successful business relationship. Do you ever question weather or not you will be a good fit? This week will help you identify if you can align with a franchise and their focus. As we discuss that getting involved and building relationships with current franchisees is a good strategy, we also illustrate that it is good to take a look at them and see if you align to the successful, or not as successful franchisee. In today’s society, sometimes it can be hard to identify which franchisee is successful or not and this is another topic that we share our experience on. Can your thought process and goals align with a company’s and their franchisees? This is an important question to seek the answers to. You must be able to align with evolvement and must be open to whatever evolvement a franchise has planned for their future.
With the rapid evolvement of franchising, there is a lot of noise in the franchise world today. If you have been struggling to sift through the noise, seek answers about yourself, the evolvement or focus of a franchise, this week’s episode with Dan will bring you the solutions you have been looking for. The purpose of this week’s episode is to alert and acknowledge the evolvement that’s taken place, the good and bad that come with it, and to teach you the characteristics and strategies from our perspective that have assisted us in reaching success. As Dan states, “The industry is in a different place, you got to go back to it quite a bit different than we did back then to be successful today.”