Originally published on Forbes.com
First Serial Rights March 4, 2015
If everyone treated executive onboarding the way McDonald’s brings its franchisees into the fold, the failure rates for new leaders would plummet. In particular, increase your investment in the screening process, two-way qualification and onboarding executives across time, locations and media.
“I’d like you to quit your job, give up your benefits,
go into a business you know nothing about;
and, oh by the way, I can’t tell you how much money you’ll make.”
This is how iFranchise Group’s Mark Siebert describes the value proposition for potential franchisees. This is why franchisee onboarding has “a lot more of a sales process involved.” This is very much about qualification. Franchisees expect to be involved for 15-20 years. You can’t just fire them “because you don’t get along with them.”
Siebert took me through what the strongest franchise systems like McDonald’s, Auntie Anne’s Pretzels and HoneyBaked Ham do to qualify and onboard new franchisees. Their three priorities line up exactly with the only three true job interview questions (Strengths, Fit, Motivation).
Strengths to succeed
The first piece of qualification is about the basics. As Siebert put it, “Stupid, undercapitalized and lazy doesn’t work in any business”. Franchisors screen for intelligence, work ethics and capital. Then they focus in on what their particular organization needs. For example,
- HoneyBaked Ham franchisees need a combination of food service and retail
- For senior care franchisees, the managerial components are more important
- McDonald’s requires discipline
- For other businesses, sales strengths are more important.
Fit with organizational philosophy
Most important is finding “people that are going to believe in your organizational philosophy from day one.” Franchisors can train skills. They can’t force fit. This is why poor franchisors fail by trying to go too fast. The best franchisors screen for fit throughout the sales and due diligence process leading up to a “discovery day.”
Ninety-five percent (95%) of franchisors host some sort of two-way discovery day for potential franchisees and the organization to get to know each other. These typically involve a dinner and then a day of meetings with senior leaders and functional groups. At the end of the day they get together and figure out if they all believe in the fit between franchisee and franchisor.
Motivation – not too entrepreneurial
Franchisors need people who “follow the rules of the road and systems to protect the franchisor’s brand.” Siebert told me that “True entrepreneurs never saw a rule they didn’t want to break.” So, the ideal franchisee:
- Has a long history of working in a corporation.
- Retired from the military.
- Has been in one relationship for a long time. Typically married.
- Doesn’t break a lot of rules.
- Was an A and B student.
Essentially, these are people who “drive minivans in the right lane of life.” (Unlike entrepreneurs who are “C-students who started their first business before age 25, bounced around from job to job, divorced, have traffic tickets and are rule breakers.”)
Don’t confuse following the rules with lack of creativity and innovation. Half the items on McDonald’s menu were developed by franchisees including the Big Mac, Filet of Fish and Egg McMuffin. The best franchisees come up with ideas. They just work within the system.
Siebert explained that best franchise onboarding programs are ongoing processes that include
- Initial training via video, on-site (in a unit), at HQ (like working in Hamburger University), in their own physical location at the grand opening.
- Check-ins every week at first and then every two-four weeks as the franchisee becomes more proficient.
This varies based on complexity because “in the food service business if you get it wrong you can kill your customers.”
Implications for your non-franchised business
- Get your screening criteria right. It’s not just about strengths. Make sure you’re considering fit and motivation as well.
- Make the qualification process a two-way street. Think about mutual discovery days instead of pressure interviews.
- Invest in executive onboarding across time, locations and media starting with a New Leader’s 100-Day Action Plan. Treat everyone like they’re going to be with you for 15-20 years – and they may be.