Using EOS Principles for Growing your Franchise
David Gullotti of EmmerScale shares tips for leveraging vision, values and culture to elevate your franchise brand.
Whether you’re a startup franchisor or the founder of a thriving, mature franchise system, your core values and culture can be the tipping points for growth or stagnation.
By implementing the basic principles of an entrepreneurial operating system (EOS) into your daily operations as a franchisor, you can ensure your brand is on the path to success. you can analyze your brand and use the resulting data to strengthen its vision, values, people and processes while building traction and addressing issues before they arise.
To learn more about the ways franchisors at any stage of their journey can utilize EOS to scale their businesses, Charles N. Internicola of The Internicola Law Firm sat down with David Gullotti, founder and CEO of EmmerScale, a company that helps emerging franchisors scale their businesses.
5 steps to take to implement EOS in your franchise system include:
- Adopt the Right Mindset
- Define (and Exemplify) Your Values
- Put the Right People in the Right Seats
- Own Your 'Why'
- Evaluate Company Performance - and Embrace Accountability
1. Adopt the Right Mindset
As a startup or emerging franchisor, it’s critical to adopt the right mindset when making the transition from small business ownership to franchising.
“I always say, to anybody that's getting started and really wants to ramp up and scale using a franchise model, you are no longer in the business that you’ve been in. You are in the franchise business. You are a franchisor. It's a different whole perspective,” Gullotti says.
When it comes to franchising, adopting a growth mindset can help new franchisors learn to focus on key components of their brand that differ from running a small business. Often, this includes looking at the following areas of your franchise system:
Boosting unit-level economics
Earning validation from franchisees
Differentiating your brand from competitors
Improving systems and processes
Developing a five-year success plan.
By looking at the franchise system from a growth-based perspective as a franchisor, rather than a small business owner, you’ll be able to identify where your brand needs to improve – and make the changes necessary to get where you want to be.
2. Define (and Exemplify) Your Values
One of the most important steps a franchisor can take when preparing to scale their brand is developing a “people strategy” based on a set of values that authentically defines your brand’s culture.
“When we talk about the fundamental piece that a franchisor needs, it needs to have the right people in the right seats. And it starts with culture,” Gullotti says.
To ensure your internal culture is strong and that your team is aligned with everything your brand claims to stand for, it’s important to make sure your core values are well-defined – and that your company’s actions and decisions are aligned with them, rather than merely using them as buzzwords to make the brand sound good.
“If you're a company that says, ‘Well, we want to have integrity.’ But yet you'll do a deal at any cost and you don't care, you step over things to get things done, and a Machiavellian kind of ends-justifying-the means is the functional way you operate your business, then that's not really a core value. It’s hypocrisy,” Gullotti says.
@entrepreneurskickass The difference between true, authentic core values that your team live by vs. aspirational core values is huge. #franchise #eos #eosimplementer #business #corevalues #businesscoach #businesscoaching ♬ original sound - Entrepreneurs Kick Ass®
3. Put the Right People in the Right Seats
When it comes to success in franchising, having the right people in the right places is crucial.
“The idea is that a rock-solid people culture, actually, is part of the strategy. You cannot execute an overall business strategy without the right people,” Gullotti says.
To make sure your corporate team is strong, consider developing a leadership framework that prioritizes the core functions of operating a franchise. Those positions should include people that are able to perform the following functions:
Defining the brand’s vision. Whether their title is the CEO or something else, it’s important to have someone who looks at the big picture and defines the brand vision.
Daily operations, onboarding and training. It’s important to have someone with management experience handle the daily operations of the franchise brand, including onboarding and training new franchisees, helping launch their businesses and providing ongoing support.
Managing finances. The financial component of the franchise system should be handled by someone who is more than just a bookkeeper. Instead, choose someone with franchise experience that understands transactional dynamics, franchise law and how to allocate resources appropriately.
Franchise sales and development. While sales and development can be handled either in-house or by a third-party franchise sales organization (FSO), they are a critical part of the franchising process and should be managed by someone who is knowledgeable and experienced.
Marketing. Lead generation is one of the most important components of selling franchises. Because of that, it’s important to have a capable marketing team who understands how to effectively collect leads from qualified franchisee candidates and convert them into franchise sales opportunities.
As the franchise brand matures and scales, it’s important to add additional team members as needed to support growth. Those positions often include:
Onboarding specialists
Training specialists
Launch specialists
Business coaches
Marketing agencies focused on SEO and SEM
Still, franchisors should avoid hiring more people than necessary to support the brand’s needs due to the potential for undermining the company’s growth.
“When you overhire, it's very hard to get to profitability as a franchisor,” Gullotti says, explaining that overhiring can create barriers to scaling.
4. Your Own 'Why'
Having a sense of purpose in business is critical for building a cohesive, mission-driven culture. Employees and team members also often thrive in environments where the impact of their work is clear and their role is valued by management.
“There has to be a why – why, why, why – and then alignment around that why,” Gullotti says.
Aligning your business around your “why” is also a key component for differentiating your brand from other, similar brands with similar values and missions. By making sure employees and corporate team members know what to expect from the brand, you can encourage higher morale and, ideally, better productivity.
“If you’re a franchisor and you've got a team of three, and it doesn't feel like six, there's something wrong with your culture,” Gullotti says.
5. Evaluate Company Performance – and Embrace Accountability
To keep your brand operating at a high level, it’s important to conduct a SWOT (strengths, weaknesses, opportunities and threats) analysis at least annually to analyze your franchise system’s performance and confront problems before they have a chance to get worse.
“Understanding organizational weakness relative to the people's work is a huge piece of (franchising). So you’ve really got to do due diligence on the people side, upfront,” Gullotti says.
It’s also important to conduct reviews somewhat regularly, making sure the right people are in leadership positions, that employees have a clear understanding of their mission and that your corporate team has a growth-oriented, can-do attitude.
“You have to have gritty, grinder-type people (on your team). Franchising is not easy. It's not for the faint of heart,” Gullotti says.
Regardless of the outcome of your brand’s SWOT analysis, it’s important to remember that it’s never too late to start improving your franchise system. By making the appropriate changes as soon as you’re aware of issues, you can correct course and get your brand back on track – even if you feel like your brand is lagging behind.
“When was the best time to plant a tree? 20 years ago. When's the next best time to have the opportunity? Today,” Gullotti says.
If you’re ready to get your brand on the path to franchising success, our experienced team of franchise lawyers and developers is here to help. Contact us today.
