Lauren Fernandez’s Post

The major appeal of franchising is that an established brand and business model exists, drastically reducing an owner's start-up risk. BUT, a franchisee's ability to succeed depends on their personality, leadership style, and desire for creative control. Read the article by Corey Nicholson, CFE published by Elite Franchise Canada: https://lnkd.in/eMnwzgXZ

The recent struggles of Papa Murphy's under MTY Food Group's ownership exemplify a broader, troubling trend in the franchise industry: the detrimental impact of private equity ownership on established brands. MTY's approach to Papa Murphy's mirrors the typical private equity playbook. When growth stalls or brands face challenges requiring significant investment, PE firms often lack the will, cash, or strategic insight to nurture long-term growth. Instead, they focus on short-term value inflation and loading brands with debt to facilitate a quick, profitable exit. Papa Murphy's declining store count and MTY's search for new acquisitions rather than reinvestment in existing brands highlight this shortsighted strategy. The company's readiness to "pounce" on new opportunities while its flagship brand struggles is telling. This pattern is endemic in PE-owned franchise systems. The model prioritizes rapid expansion and cost-cutting over sustainable growth and brand health. When faced with necessary brand refreshes or renovations, PE owners often balk at the required investment, leading to brand stagnation and franchisee dissatisfaction. The franchise industry has tolerated this elephant in the room for too long. PE ownership threatens to collapse more iconic, long-standing brands before moving on to "greener pastures." This cycle of acquisition, value extraction, and disposal leaves a trail of weakened brands and disillusioned franchisees. As a franchise attorney, I've witnessed firsthand the aftermath of such strategies. Franchisees often bear the brunt of these decisions, facing declining sales and support while still bound by franchise agreements. The industry needs a paradigm shift. Franchise systems require patient capital and leadership committed to long-term brand health. Until then, we'll likely see more stories like Papa Murphy's – established brands struggling under the weight of short-term financial engineering rather than thriving through genuine operational improvements and strategic investments. It's time for franchisors, franchisees, and industry regulators to seriously reconsider the role of private equity in franchising. The current model is unsustainable and threatens the very foundations of the franchise business model. #franchise #franchising

What do prospects think qualifies them for franchise ownership? In our latest survey, almost two-thirds (66.3%) of respondents claimed  “willingness to follow a proven system”, an essential characteristic for succeeding at franchise ownership.  Grit, or “persistence towards a goal despite obstacles” was cited by over half of respondents (50.6%) of respondents, followed closely by “team leadership experience” at 47%.

What are the secrets driving franchise success in 2024? 🤔 Curious about the industry leaders? Dive into Entrepreneur’s Franchise 500® and Discover them here!🚀

This is one of our favorite success stories to date. Let’s talk about @Burger King’s bold move! Even giants like Burger King encounter challenges in the franchise world. Let's dive into their recent shift acquiring franchise locations. 🍔 Many brands like Burger King rely heavily on franchisees, minimizing physical asset ownership. 🍔 Unlike McDonald's, Burger King's purchase of franchise locations raises eyebrows at potential struggles. 🍔 What's behind this move? It might suggest a push for more control and brand revitalization. 🍔 Implications for the Franchise Landscape: Burger King's strategy prompts smaller franchisees to assess their own operations. 🍔 Speeding up store renovations aims to elevate customer experience and regain competitiveness. 🍔 Parent company Restaurant Brands International juggles innovation and franchisee relations. Enjoyed this fun case study? Follow us for more!

Veterans excel as franchise owners, and our latest blog post reveals why. From leadership skills to resilience, discover the unique qualities veterans bring to franchising. Explore how these strengths contribute to success in the business world: https://lnkd.in/eWPWup2J

Imagine dedicating your career to successfully building a thriving empire of 37 restaurants, doing so with the dream of leaving a lasting legacy for your next generation. A situation currently unfolding with McDonald's franchisee, George Michell, throws a spotlight on the challenges faced by many entrepreneurs when they attempt to turn this dream into reality. Michell is presently locked in a legal battle with the McDonald's corporation. He alleges that the company is manipulating its revised franchising standards to coerce him into disposing of his lucrative outlets at undervalued rates. As a franchise attorney, situations like these are not as rare as one might think. Often, first-time franchisees nurture a vision of establishing a family business legacy. They invest sweat, tears, and countless dollars with an eye on future generations. However, complexities lie hidden in many franchise agreements that can threaten this vision. Usually, these agreements necessitate that the succeeding owner or generation must be fully trained and approved by the franchisor. There’s more - the franchisor often retains a right of first refusal to any transfer to a new owner, even if it is a family member. These conditions often pose significant challenges for franchisees hoping to pass on their businesses. In Michell’s case, this took the form of allegations from McDonald's that he failed to have his daughter approved as a franchisee. However, he asserts that this is a tactic deployed to pressurize him into selling his restaurants at below-market prices, thereby disrupting his succession plan. As surprising as it sounds, Michell's outlets generated an impressive $158 million in revenue last year alone. Yet, McDonald's is allegedly trying to undermine his success. Michell’s ordeal is a wake-up call for all franchise owners and budding entrepreneurs. As we nervously await the verdict in this case, it's pertinent to understand that business success and power are dynamic. Regardless of the size or stature of a business or the franchise, the legal landscape is often more intricate than it appears. Stay tuned for more updates on this evolving story. In the meantime, I'd love to hear your thoughts about this case and other similar franchise-owner relations matters. #franchise #franchising

The franchise industry in the United States has evolved in recent decades, setting the path to a new way of doing business under this model. Thus, today's growth strategy is based on multi-unit franchisees, private investment firms are behind the big brands, and Generation Z is pushing for a change in team leadership. In this #WednesdayBlog, Aicha Bascaro shares how franchises have changed over the years and the trends that are shaping the industry today. Thanks for reading and sharing! #FranchiseEvolution #BusinessTrends #FutureOfFranchising #FranchiseGrowth https://lnkd.in/e2_3cyQ4

Veterans: The Unlikely Heroes of Franchise Success Imagine transitioning from a structured, discipline-driven environment to the entrepreneurial world. Sounds daunting? Not for veterans. Here's why they're nailing it as franchisees. Discipline, structure, teamwork. Skills honed in the military that turn out to be the franchise world's golden ticket. Veterans bring a unique set of capabilities to the table, making them ideal candidates for successful franchise ownership. Leadership is in their DNA. Veterans have been in high-pressure situations where decisive leadership wasn't just valued, it was vital. This translates seamlessly into running a franchise, where quick decision-making and leadership can make or break a business. Compliance with systems and processes? Check. The military is all about protocols and following procedures, a direct parallel to the franchise model which thrives on replicating proven systems for success. But here's the twist. It's not just about following orders. Veterans' ability to adapt and overcome in dynamic environments means they're also exceptional at navigating the unpredictable waters of business ownership. The synergy between military training and franchise operations is undeniable. Veterans, with their ingrained discipline, leadership skills, and adaptability, are uniquely equipped to take on the franchise world and excel. So, next time you meet a veteran-turned-franchisee, remember you're looking at someone who's leveraged their military skills to master the art of entrepreneurship. Interested in exploring how veterans are redefining franchise success? Let's start a conversation. Share your thoughts below. #veterans #businessownership

Imagine escaping the cold Northern winters for sunnier climes, only to discover your franchise business nosediving in your absence. The downfall of absentee franchise owners, affectionately called 'snowbirds' is a real and seemingly growing concern. These owners, once at the helm of their franchises, try to remote manage from their winter hideaways and often return to a business on the brink of collapse. Leadership isn't a title, it's a series of actions. The most successful franchisees aren't just figureheads, they are hands-on, investing their time and energy in their operations, fostering a strong bond with their franchisors. They understand their role in molding the customer experience and meeting profitability goals. Absence can lead to disconnection, not only from your employees but also your customers and wider community. And in today's challenging hiring climate, this disconnection could prove disastrous. A robust, appreciative, and coaching leadership style is what retains and attracts talent, curbing the high turnover that plagues many businesses. As an absentee franchisee, your chances of being invited to prestigious groups like the Franchise Advisory Council or being a guinea pig for brand new systems or tools are slim. The ones who make it to these exclusive clubs are the 'leadership franchisees' - those who show up, put in the work, and demonstrate a deep commitment to the brand. Take control of your franchise business. Be the franchisee who provides continuous coaching and feedback, who nurtures potential leaders within their team. This investment in talent development ensures that when you do want to escape the cold, you leave your business in capable hands. #franchise #franchising