Building a successful franchise requires not only strong, qualified leads but also a support network that helps bridge the gap between franchisors and franchisees. Setting clear expectations and providing ongoing support to new franchisees will ultimately provide greater returns to franchisors. It can be difficult for business owners to provide the kind of support that new franchise owners require, however. That’s where Rick MacLennan, founders of MACINK Consulting, steps in.
We sat down with Rick and talked about his vast experience as a franchise owner as well as a franchise consultant. He shares how to set up new franchisees for success and ways to support their ongoing franchise growth.
Rick MacLennan is a Certified Leadership Trainer and SME Strategic Coach and Consultant. He works across three areas: leadership training for executives and teams; business coaching and consulting; and sales training for individuals and teams. Following several years in the financial services sector Rick gained extensive experience on both the franchisee and franchisor side of the franchise industry. This broad experience has given him unique insights into the workings of both complex and small business. Rick focuses on creating systems, procedures and structure to help increase the likelihood of his clients succeeding and becoming profitable. Over 30+ years Rick has trained numerous sales teams and sales managers. He has also taught a variety of workshops at international sales conventions. He tends to take a firm approach, providing constant and consistent mentoring to ensure the client reaches the goals that are important to them.
Watch the full interview here:
Juliette Schmerler (00:01):
Okay, so we’ve got Rick MacLennan with us today from MACINK Consulting. Hey Rick, how are you doing?
Rick MacLennan (00:07):
I’m doing very well. How about you?
Juliette Schmerler (00:09):
I’m doing great today, thanks for asking. So I’m going to let you introduce yourself, tell me all about your vast experience in the franchise industry and how you help franchisors with network support and other areas. So go ahead and introduce yourself.
Rick MacLennan (00:26):
Juliette, thank you very much for the opportunity to be with you today. My background, as you can see by my naturally occurring highlights, potentially I have been at this for a bit. I have had the pleasure of owning two franchises and I have worked with an international franchisor, probably spending at that point, something like 15 years in the industry. And through that I came to realize just what a positive business model a franchise can be, but it also has to have some support inside of that. Currently we support franchisees and franchisors independently. I also deliver mandates for Business Development Bank of Canada. So I work for them as an external consultant across Canada.
Juliette Schmerler (01:16):
Great. Okay, well I’m going to jump into some questions. So we’re going to talk a little bit about network support. So one of the things that often attracts franchisees to a franchise system is that they’re coming into a business that’s already kind of been thought through, that has hopefully already achieved a certain level of success. And one of the draws is that there is a lot of operational support and systems in place. So in your opinion, what are the responsibilities of the franchisor in terms of helping franchisees be successful? What can they do to help prepare them and help them make their location a success?
Rick MacLennan (02:01):
Juliette, that is a really great question. One of the things I have come to realize when we were working for the franchisor is that franchisees want to be in business for themselves, not by themselves. And so for me, the first thing that I think a franchisor can do to make sure that a franchisee will be successful is to actually find and sell to the right franchisee. Too often a franchisor sees a cheque and they get really excited, as well they should be. But they don’t take enough time to truly vet that person or to just have the courage to say no.
Juliette Schmerler (02:43):
Yeah, that’s so true.
Rick MacLennan (02:45):
And that’s biggest for me, that’s the biggest thing. If a franchisor has enough prospects, has enough courage, and they can say no, that will be the, I guess that’s the number one situation. The second one we’ve seen is making sure that as a franchisor, you’re holding your franchisees feet to the fire. Are they doing what they said they were going to do? Are they following the methodology, the strategies that the franchisor has built and is really what the franchisee had bought? Or are they off doing their own thing? And I guess the last one for a franchisor is to not oversell the opportunity. Better to underplay it and have the franchisee be amazed at what they bought versus overselling it and the franchisee now is struggling or is not getting what they thought they bought, if that’s a fair assessment.
Juliette Schmerler (03:46):
Right. Yeah, I think that’s such a great point about picking the right franchisees because it can be tempting, especially if you’re in an early stage franchise where trying to grow and people show interest and you wanna bring them in. But it’s so important to have somebody who still understands that even though you are buying a system that’s got proven operations and so on, it’s still a business and you still have to make a success out of it. And it’s not all going to be handed to you on a silver platter. I mean there’s a lot of help and support, but at the end of the day, it’s still a business that you have to grow yourself. So I think sometimes there’s that misconception that there’s that term like business in a box or something that it’s just going to given to you and it’s all just going to happen. But it’s kind of balancing out those expectations.
Rick MacLennan (04:36):
It truly is. I ran the Canadian operations for an international franchisor and when we were in the meetings in Florida, everybody would go to Florida to have the tour of the plant at the time, and really the vice president in charge of our division, his final role was to talk the person out of it. And when they finally got to his office, his whole deal was to talk them out of it so that they would understand that first of all, you are going to put your back into it. There is no free lunch. It really is no low hanging fruit, it’s going to take work. But what the franchisor has done is removed all of the stumbling blocks that most entrepreneurs find for themselves and has really laid it out that, if you follow what we say and put in the time and effort, you have a extremely high chance of being successful.
Juliette Schmerler (05:39):
Right, right. Yeah, that’s a good way to approach it for sure. So on that note in your experience, where do you think sometimes go wrong when it comes to the franchisor or franchisee relationship? Because we know we’ve all seen franchise systems where you have some disgruntled franchisees and the expectations maybe are not correct in terms of what the franchisees expecting from the franchisor, or vice versa. So where do you see things go wrong and how can the franchisor remedy that?
Rick MacLennan (06:16):
Well, what an open ended question, Juliette. And yes, because I’ve been on the receiving end of both sides. I have been the franchisee that’s disgruntled, I’ve sat on the international steering committee that’s been disgruntled. And I’ve been on the other side as working for the franchisor trying to mediate those issues. I have to tell you, the number one place where franchisor or franchisee relationships break down is in communication. Communication going both ways. And when that happens, it is so easy for people to misinterpret, get their backs up and nobody wants to be the person that’s backing down. And so it continues to escalate because, “you told me this”. “No, I told you that.” “You promise me this.” “No, I never said that.” Those are the kinds of circular arguments that get really difficult. Where a franchisor can get into real trouble is if their promises are vague. “You’re going to be able to do all of this.” And well, how? “…Well it’ll come to you, it’ll happen.” Rather than a very strong detailed methodology and plan that goes, “you’re going to go here, we’re going to do this day one, day five, day 10,” whichever.
And so if they’re vague in what they’re promising, then on the receiving end the franchisee gets to interpret. And that’s not good because rarely do we interpret correctly. The other one where I’ve seen things come to play is when a franchisor changes the rules halfway through the game without again ongoing discussion as to why are we doing this? Is it a profitability issue? What is the reality? Why are we doing that? Most people are not comfortable with change. They bought this and now you want to do that. You wanna either give me a product I don’t want, or maybe you want to take away something I think is the best thing in the world. But if we don’t preface that with some ongoing discussion, then the franchisee gets word that their business is going up in smoking. “What did we buy?!” Is that sort of thing. And from a franchisee standpoint, I have also seen a number of franchisor fall fowl of poor quality. So you know, came in and something was at a certain level and they’ve either changed vendors or brought in from a different factory and the quality drops and the franchisee is now going, “Oh wait a second, I can’t sell that. This is not what we set out to be. This is not what I believe we’re going to be.” But all of those go right back to the first statement, which is bad communication.
Juliette Schmerler (09:04):
Right, for sure. So what do you think, and I know that every franchise system is a little different in terms of what a franchisor offers and so on, but in general, what do you think a franchisee should expect to receive from a franchisor and what should they expect to have to do on their own and to be realistic about what part of it they have to take responsibility for?
Rick MacLennan (09:32):
Another really great question, and you’re right, it depends on which franchise you bought into. I guess if I’m looking at buying in, one of the things I’m looking for is I’m looking for a very strong methodology that I’m going to follow. I don’t want to have to guess as to what am I supposed to do every day. I don’t want to guess as to how do I want to make a sandwich or how am I going to build a widget or how am I going to deliver this service? I wanna make sure that if I’m going to buy your system then I can follow it without a whole bunch of, I don’t need to have an engineering degree, I don’t need to have a whole bunch of other background other than my enthusiasm, if that makes sense. And so as a franchisor, depending on what your model looks like, it may include a CRM, a client relationship manager, it may include some sort of accounting software, whether it’s Sage or QuickBooks or a proprietary one.
It certainly should have anything that I need. So when I unlock the door on that first day, I’m ready to go to business. As a franchisee, I have a business to run. I need to have in my back pocket or in my quiver, I need to have a good accountant, I need to have a good lawyer. I may need a business consultant to help me if I’m new to the business world and I’ve come out of an institution of some kind but I’ve never actually owned my own shop. And so you may need some of that. The franchisor will often supply the consultant in terms of a regional director, which is the role I play.
Juliette Schmerler (11:28):
Yeah, actually that kind of leads me to my next question. So tell me about the job of a regional director and how a regional director can help bridge some of these issues between the franchisor and the franchisee.
Rick MacLennan (11:44):
The regional director is that single point of contact that a franchisee has that is really on their side. That person’s really their advocate. I’m going to go to bat for you with the franchisor, inside the parameters we can work in. The regional directors also the person that goes, “No, this is some brand requirements here. You must do this and let me show you how”. What we don’t want is somebody going, I have the franchise agreement and I’m going to make you do it. That’s not what regional director is. And so the role that we play, or the role that I played, is in this particular case, I traveled from Victoria to Halifax and we would spend two or three days with the franchisees helping them with sales, sales on the street. How are you doing it? What are you doing? Helping them with looking at their office. What are you doing?
What are your goals? Let’s see your business goals. If you don’t have any let’s help you set up, how do you create a business? How do you create a set of SMART goals? What are you going to do every day to execute on those? All of those things to help you build out your business. The goal really for us as regional directors is at the end of the day, if I can help you be more successful and sell more service, the franchisor’s going to be reaping the benefit. And so we have a very, it’s a one way street. The more I can help you, the better I’ll do. So what do you need? That to me is the real role of a franchisor’s regional director. It’s also often great to have an individual that separates often the founder from the franchise network because the founder tends to be that hardcore entrepreneur who is heavily driven. Those don’t make great franchisees. And so if you’ve got somebody in the middle, then you can keep both parties and make sure that the communication is better, that it’s the more bees with honey than vinegar, it allows a separate person to be there to help keep everybody happy, for lack of a better phrase.
Juliette Schmerler (14:06):
Right. Yeah. One of the things that I’ve seen happen a lot from a marketing standpoint is franchisees who sort of take it upon themselves to do their own marketing programs, which is great on the one hand because they’re taking initiative but they’re not necessarily following brand guidelines or working within a consistent system that sends out the proper messaging for the brand and so on. So I’ve been approached by a lot of franchises who’ve said, I’ve got different people going out and doing different advertising campaigns online and it’s a bit of a mess and we don’t have any control of it. They’ve got their own landing page that they’ve created and so on. And so I think sometimes I feel like there’s a gap in terms of, and I don’t necessarily think it’s the franchisee’s fault or the franchisor’s fault, but it’s almost like there needs to be a precedent set about okay, we’re going to help you with lead generation and this is what it’s going to look like and we have a certain ads that we want you to create that have a certain look and feel. We want to do it in a certain way. And there’s this certain parameters around it based on their success. So I often kind of see that where the franchisor, especially if it’s a smaller franchise where they, they’ve got everybody just sort of doing their own thing and then it does waters down the brand I think when people are doing that.
Rick MacLennan (15:33):
See, and I would agree wholeheartedly with you and regardless of the size so if you’re a multinational, you have your own advertising department and you’re building out the things, but regardless of that size, the ability now to have great creative done at relatively inexpensive pricing, I think eliminates any discussion about doing something on your own. I also believe that as a franchisor we need to look at things on a regional basis. Things that will work out in Vancouver in the west coast are not the same things that are necessarily going to work in the Maritimes or in the GTA or through the prairies. That needs to be brand consistency, but there also needs to be some regional discussion. So when we had franchises in the GTA, we had franchises in market size where we are today in Calgary, we also had franchises in enormous cities like Los Angeles and Houston and really little small ones like Prince Edward Island, Charlottetown.
And so the message had to stay the same, the branding had to stay the same. But as a franchisor we really had to say, okay, we have a national campaign, we have a national look, but we also want to have that regional specificity where we take into account in a small market, everybody may know me and hopefully that’s a good thing. So I have to come across different than the person who’s advertising in Calgary or in Houston or in Miami, which is different to Regina. And so again, we need that national presence with regional opportunities.
Juliette Schmerler (17:22):
Right. Yeah, no that’s so true. It’s important to create a consistent brand that will help franchisees be successful, but then attracting customers in your local area, the messaging is so different and it’s more about that location and bringing in people and it being more sort of community based. So it’s definitely a balancing act. So as far as regional directors, at what stage do you think a franchise needs a regional director? If it’s an emerging brand with say 10, 20 locations, that can be a stage where things start to go wrong and things, there’s more people come on board, it becomes more difficult. So how can someone get help from someone like a regional director and at what stage would that be appropriate?
Rick MacLennan (18:12):
That’s a really great question. From my standpoint, I ran the Canadian operation. There were five other folks that looked like me doing the American side because we had hundreds of franchises. Not, it’s not an inexpensive part of the franchise world, but it’s the one that can give you the most return or cause you the most grief. So to answer your question, for me it would be from almost day one, how do you build a franchise network? One franchisee at a time. And to do that, especially if you’ve got a very passionate franchisor, it often is brilliant to put somebody in between, somebody who has experienced either consulting with clients or being in the franchise world. We’re not there to tell you how to build the sandwich, that is part of the book that you bought and it’s there or how to do whatever the actual product.
Our real role for the most part is what are you doing to build your business? We need to keep you compliant. So “here, no you can’t do that, but we can do this”. How are you running your business? So that we get, as a franchisee, you kind of feel okay, again, it’s in business for myself but not by myself. And I see the role as somebody who comes along and they really have their arm around you, “Hey, we got you, what do you need?” And really from my standpoint, you really wanna start that at the beginning. And one of the ways to do that is through a fractional arrangement with a consultant who knows business or knows the franchise world can train up relatively quickly on your specific product and understand your methodology, but has the ability to either face to face if you’re doing regional or certainly as we’re doing with the ability now with the technology and the options that have come with video, to get in there and click with that person. But we are not corporate, we’re kind of their best friend. We’re that, “yep, I’m going to go talk to them because she really has my back.”
Juliette Schmerler (20:29):
Rick MacLennan (20:31):
He knows how I feel. He has the pulse or I really think that she cares about me. And it’s not to minimize corporate, but it’s a great way for everybody to get what they need.
Juliette Schmerler (20:48):
Yeah, that totally makes sense. It’s like having somebody who’s kind of there for them that they can speak to and feel that they are, they’re heard, right? Because sometimes the franchisor is so busy with other areas that they need someone to advocate for them. So that makes a lot of sense. And I know that in the process in finding new franchisees, a lot of times they’re wanting to speak to existing franchisees and that validation piece is so important for selling franchisees. So not only do you want your franchisees to be successful and happy, but in terms of growing your network, if you don’t have happy franchisees, it’s going to be a hell of a lot harder to sell to others. So you gotta be able to show that you’ve got happy franchisees who are feeling supported and so on.
Rick MacLennan (21:38):
What’s neat about what you say, cause it’s very true, the next step from that is if I’m an exceptionally happy franchisee in beautiful downtown Winnipeg, I may have friends or relatives who are in Fraser Valley and I’m going to them like, “I’m glad I left my such and such and I’m now on my own and you gotta come and join these folks cuz they are amazing.” Because it’s hard to find good franchisees as it is good employees. And I look at, so if I can get a referral and a testimonial that’s much better than a franchisee they call up is, I wouldn’t waste my time with these people. It’s horrible. They don’t support me. You know blah blah, blah. And perception is reality. I’ve listened to franchisees and I’ve talked to franchisors. I go, okay, they obviously are going to agree to disagree as to what the issues are. Regional directors can be good mediators.
Juliette Schmerler (22:46):
Yeah, definitely can alleviate some of those problems so that when there is someone else interested, they can feel good about that this has been really successful for someone else and they feel supported. So that definitely seems like a very important role for sure. So anything in terms of some of the tools or programs or software that franchisors can offer their franchisees to better organize and support them? Do you have any thoughts on that?
Rick MacLennan (23:18):
Yeah, and it goes back to something you and I were chatting about a few minutes ago. If a franchisor said, you know what, we’re going to use, and I’ll just say QuickBooks for arguments sake, we’re going to use QuickBooks and we’ve got it set up. And so you buy your QuickBooks program, you QB online or on desktop, whichever you want, and we’ll help you set up your chart of accounts and get it all laid out so that it works for your business. Okay. That’s another thing off my plate.
Juliette Schmerler (23:47):
Rick MacLennan (23:50):
CRMs, client relationship managers, depending on how they are selling, if they have a bricks and mortar or if they’re going directly out and talking to folks one on one in that market, then some way of keeping track of their clients and their prospects and helping them do that, it’s wonderful. If a franchisor has built a relationship with, there’s a long list of them starting at the top with Salesforce and anything else outside of that where they can offer the franchisee, your monthly commitment would normally be X, but because we’ve built this relationship with this vendor, it’s X divided by two. So, you still have to pay for it as a franchisee, it is your business, you’re committed to it. But there’s another reason to become part of a franchise, of buying power, support. And oh, you know what? And then we know how you typically should use it. So we have, here’s your 1-800 call for help if you need to talk, not to us. You’re phoning directly into the vendor and they understand our system and they will help you set it up or they’ll help you walk through it. So any of those tools, budgeting tools, marketing tools, helping them set up a marketing plan, helping them through all of the aspects of what a normal business operator would do really for me is why I would buy a franchise.
Juliette Schmerler (25:19):
Yeah, absolutely. It’s that huge learning curve when you start a business that is reduced a little by becoming part of a franchise network. Those are some things that can take someone who’s new to business such a long time to understand and to sort out what the proper supporters and providers are for all of those software tools and understanding what’s out there is definitely can be a bit overwhelming for a new business owner.
Rick MacLennan (25:48):
Oh, absolutely. And if the franchisor has this as part of their methodology, it allows them to set up, okay, here’s your operating budget. Yes, you have our fees and you have that, but you also need to have accounting, legal, CRM. You know, do you have your own laptop or were you a corporate person and the laptop was there, Do you have your own subscription to Microsoft Office? What is going to be your email carrier? Where are all of those things coming from? Right. Everything that a franchisor and the business in of box is a great phrase because the theory would be I should be able to open that and it’s all there now I have to give what I promised, which is my enthusiasm, my energy, and my time.
Juliette Schmerler (26:42):
Right, absolutely. That’s great. Well, thank you so much for talking with me today. I think this has been really helpful and I’m going to put in our show notes how to reach you.
Rick MacLennan (26:54):
Thank you for that.
Juliette Schmerler (26:55):
Yeah, I think that your experience and your knowledge of understanding both sides, the franchisor and the franchisee is so important and it’s such an important aspect of making a franchise successful and allowing them to grow and making sure that everybody’s taken care of. So it’s definitely such an important role.
Rick MacLennan (27:13):
Well, and it’s fun. One of the things that I loved was being able to travel from Victoria to Halifax, seeing so many, and it was interesting because yes, you’re in a different region, there are differences, but you walk into somebody else’s business that you happen to be selling to and you realize, you know what, you’ve got the same problems as the folks in Winnipeg or the folks in Toronto or the folks in Halifax. As business owners, we have the same challenges, and so I’m not alone and I’ve got somebody who understands that. As I say, fractional works really well. You don’t have to hire your own. There are lots of ways to do that on a contract basis that makes really good sense for a franchise or its cash flow and for a franchisee to be able to have relatively quick reaction.
Juliette Schmerler (28:00):
Yeah, absolutely. That makes a lot of sense. Great. Well thank you so much for joining me today. And like I said, I’ll be sharing all your information and your web address, everything in the show note. So if anyone wants to reach you, they can go ahead and do that.
Rick MacLennan (28:15):
Appreciate that. Thank you.
Juliette Schmerler (28:17):
Okay, thanks so much.
Rick MacLennan (28:18):