The Mag
Join me in welcoming to the broadcast CEO with FranNet, Miss Jania Bailey, how are you, Jania?
Jania Baily
I'm great like everyone else a little house burns that this is shall pass.
The Mag
Well, before we get too far into things tell us a little bit about FranNet, how are you serving folks?
Jania Baily
Well, FranNet is a 32-year-old company, and the way we work we're very much similar to an executive recruiter on the job market. If you translate that now to franchises, we work with about 200 brands and they describe to us the people they are looking for as a franchisee you know, what are the characteristics of that ground, we really get to understand those brands, then as we're working with our, our clients, and we generate those in a number of ways, primarily in local market activity. And we may see people that are interested in exploring business ownership. We introduced them to franchising, first of all, explain the difference in a franchise and being self-employed. And then we help them build what we call their personal business model.
You know, do you want employees not want employees to want to work from home retail service, and associates a whole myriad of questions you have to ask, then we begin the matching process. And we eliminate brands that don't want to sit down and hopefully we come up with three to four that look like and feel like a good match for what they're looking for. Within make the introduction and help them with the evaluation process to get through a yes, or no?
The Mag
Now, it sounds a little bit to me, like kind of Russian nesting dolls in that FranNet the franchisor has franchisees and in local markets that offer franchises to people who are looking for either that second act in their career or want to be an entrepreneur or interested in a kind of owning their own business. Is that accurate?
Jania Baily
That is accurate. Good job.
The Mag
So now, as FranNet as from a corporate standpoint, is the biggest challenge finding your own franchisees? Or is it finding the right franchise partners to recommend to the franchisees to their clients?
Jania Baily
The biggest Challenges well, these challenges I've seen in this position 14 years and you know, in any given time in the economy, different sides of the coin, that one side is obviously finding the candidates that are interested in business exploration. So that's one thing we're always focused on. The other side is finding those franchise concepts that are in alignment with what the majority of our clients are looking for. We get a lot of concepts approaching us, but we take them through a very diligent vetting process, and not just Are they a good concept or a bad concept, but again, are they in alignment with what the majority of our customers are? We going to be able to be a good steward that to that franchise or it's a going out portfolio.
The Mag
So, you're vetting everybody. You're vetting every kind of side to that, like you said to the coin, what kind of characteristics let's take each one individually. What's a characteristic of a good franchisee and a local market? What kind of characteristics do they have?
Jania Baily
They are people who are ready to take control of their lives and their career moving forward. A lot of times I think the majority of our clients have been downsized to the right size one time too many. I suspect we'll see a lot of these People who were on the other side of the pandemic people that you know, were let go Star Wars because no fault of their own they were doing a great job what has happened so those people are like okay I'm gonna make sure this doesn't happen to me again obviously they have to have some capital that they're ready to invest we typically say 25 to 30% of the total investment and that's why we try to have a wide range of investment level franchises so you don't immediately knock somebody out if they've got to have you know half a million dollars so you try to make sure that you set that I tell people true entrepreneurs are not a good fit for franchises because a true entrepreneur wants to do it all themselves a good franchisee candidate is willing to follow a system is willing to take that guidance and input from the planning particle board and they see the value in that they see the value in joining a company that's been there done that and can help them on that path.
The Mag
And then from the other side of the coin, the franchisees that you represent what are the characteristics they have? I would imagine because there's so many out there in such a wide variety of industries, they all some would have similar characteristics though in terms of how to values and the math about it as well like some would-be b2b some would b2c like how do you kind of the appropriate ones?
Jania Baily
Yeah, we try to have a good mix now you know, we like automatically rule out hotels would that have clients that are looking for a multimillion-dollar investment so that's kind of off the table quick-serve restaurants in terms of the actual going in and setting down at Chili's or Applebee's those are outside our bailiwick really very little in QSR in general and fast food because a lot of food concepts are looking for people with prior fitness experience and so you just kind of set all those aside now you start coming back and going okay, it's gonna be a lot of good service businesses and some of those are retail and some are you know operate from home or small office that they do tend to be there are some that are bricks and mortars but a lot of them are more home-based or small office space scalable so you can start out with you know.
A small territory and saying that and you're ready to invest the things that they will have in common they have to have a solid concept that is proof of concept and by that, not somebody who's just got a great idea and a single unit they've been operating and now they want a franchise. I need to see waiting to see that this has been tested in more than one market with someone other than the founder ideally we want to see you know, a minimum of 10 open units that have been open and operating and you've got some track record obviously the longer they've been in business the more comfort you tend to have and the more validation you can do and seeking validation. That's how would one of the number one thing that will move people out of coming on board with us if they're playing jazz aren't happy if they're playing Harvey so feel like they've been taking good care of and supported by the planning puzzle? We don't want our clients even looking at that.
The Mag
Now when you say validation, what is kind of is there an industry definition of okay that's rich has been validated? Or is there a friend that kind of criteria that in your mind says okay, this has been validated enough for us?
Jania Baily
Well, you know, there's a couple of different survey companies out there and we do take care information and that's great that being I was a banker in a former life before this before I get into franchising, so I feel like for us to make some of the calls ourselves and depends on how large the franchise is the number of calls will make that we want to make random calls to the franchisee and we've got a laundry list of questions that we asked and the very last question is would you do it again, you know, to do everything at the beginning that you know, now would you do it again and, and we ask for them to go into a little detail about that. But we get a good feel for the complexion of the franchisees, and we'd like to talk to some that are superstars, and we want to make enough calls. We get So that average Joe in the middle of the pack, and it's always helpful to talk to people who aren't as happy. So, you can kind of see what separates sound, and is it the individual? Or is it a weakness in the system? So those are the things we're trying to figure out as we do our vetting process.
The Mag
Now, how do you help that person in a local market that sees maybe they traveled and they're like, wow, there's so many cupcake places in this city, I bet a cupcake place would be good here or younger place or some of this kind of fads that seemed like super popular, and they seem everywhere, and then all of a sudden, they're gone just as quickly as they started. How do you kind of counsel, that potential businessperson that's thinking of getting into franchising? To jump on top of one of these, you know, Hot Trends?
Jania Baily
That is an interesting question. It's one of the things that we cover in our seminars and webinars we do. And I do use the example of frozen yogurt. And I tell people don't fall in love with the product, or the service, or the idea of the product or purpose. I love frozen yogurt. But for me to buy a frozen yogurt Playhouse would be a big mistake. And the reason is, I don't want a business that's open seven days a week and has long retail hours, which a yogurt shop would have to have also would not be comfortable with the fact I prefer to work with other adult professionals and not teenagers, young people that may or may not show up for work. So, you know you've got to look at and that's what I tell people to do.
Let's look at real you love what you'll be doing as an owner. It's not whether or not he loves the product that's coming out the other end of the service and how comfortable are you with the primary role the owner has to play. I was with a haircare concept for years and you know, the job was not to cut hair. The owner didn't wasn't supposed to be on the floor doing the service the owner was supposed to be doing the marketing and out in the community making contacts and looking over the marketing plan for the next you know, 30, 60, 90 days hiring new stylists, blah blah, on and on. So, you had to make sure your skillset was in alignment with what it took to be a successful franchisee. Hope that helps. And so that's the only full challenge people is Yeah, I love that. Let's look at what does it mean to be an owner of that? And does that make sense for you?
The Mag
They'll do. Do you prefer when in a local market if somebody has one of their clients that wants to buy a franchise? Do they prefer if they are kind of an owner-operator? Or are there enough choices where hey we got some if you want to be an owner-operator, there's some choices over here but if you want to be kind of absentee there's also some choices over there? If you, are you kind of agnostic when it comes to that, or do you prefer to owner operate it
Jania Baily
We have some of those realistically, you know there's the investor model and then the owner-operator, I tend to call them semi-absentee instead of absentee as I don't believe you can ever own a business and be totally absent from it so you're going to have some role and a lot of times it's managing the manager. I think anyone going into business needs to expect that that first year there's going to be much more involved than they would ever be later down the road because they've learned how can I turn over my business to someone if I'm not even sure how it operates on a day-to-day basis.
So, I'm a big believer that semi-absentee is possible investment levels are possible that being sure you set the team in place and the understanding of the business or not you can manage it from afar and then we still have a lot of this owner-operators, people that want to get in and one unit or three units or you know a small area. We have a mix of all of that.
The Mag
If you're just now joining us, you're listening to franchise marketing radio. Our guest today is the CEO with FranNet Miss Jana Bailey Jenna, The Mag here. I've got a marketing question for you. I guess, in your role. Have you found some tools, some resources more effective than others in terms of marketing, business opportunities, franchises out to prospective candidates? like is that I don't know the right Mail, digital marketing are some things that work better than others.
Jania Baily
Well, that seems to change with that, you know, when I took over a plan that one of the things that I was still doing a lot of our franchisee have equal pricing a weekly ad in the newspaper, well, obviously, they don't do that anymore. So, you have to really keep up, you know, with what, what your clients might be doing. And there is a lot more being done digitally than ever before. So, you've got to be there.
A lot of us stuff is still if you think in terms of local market focus is local networking, local interactions, one of the things I tell our FranNet people when they join us is I want them to become the face of franchising in their market, I want it to be at someone has a conversation, and says, I'm thinking about quitting my job, I'd like to explore business ownership, somebody goes, oh, you really ought to talk to no fill in the blank, the FranNet person here.
So, I want him out there in establishing a face and a presence in their communities. And that is the most effective marketing we can do. The second would be Yes, you've got to supplement it with a lot of the digital properties. You know, being on LinkedIn, having a Facebook page, doing SEO and PPC, all of those other things. I don't think there's any silver bullet right now for anyone in our industry.
The Mag
So now, Jena how do you see, we're going through this crisis here, obviously, and you said the appeal, that something kind of an unintended consequence of this is going to be maybe more people considering owning a franchise after this thing gets kind of played out a little bit more? Are there any other trends that you see kind of going into, like, say, even next year? If that you'll think from a franchise standpoint, is there going to be consolidation? maybe have some franchises, I'm sure some of them aren't going to make it because of just the nature of what their business is. And this period of time without having, you know, kind of customers? How do you see the kind of industry moving forward? Do you know once we get through this?
Jania Baily
Yeah, unfortunately, I do think there'll be a lot of young franchise companies that won't make it, they don't have that war chest, you know, set aside of excess capital to carry them through, I think you will see consolidation, I think you'll see larger brands picking up some of those small brands, I also think you'll see and hear a lot about essential businesses, we're already hearing that buzzword was before what we heard was recession-resistant. So now it's going to be you know, essential businesses, and people and clients, especially they'll be tuned into that, who were the brand? What are the types of businesses that we’re able to continue to operate during this pandemic? And are those going to be the type of business I would enjoy? So, I think realistically, we're gonna see a shift and a change in what our consumers are looking for. But I think as an industry, we're going to see a lot of consolidation. And as I've said before, on a couple of interviews, anyone with cracks in the foundation is they're going to all sort of quiet down, it's going to be a tough time if they don't have their house in order.
The Mag
We've been doing this Franchise Marketing Show for a while now and we've run across some, I call them kind of clusters where they maybe target one industry, they have several complementary franchises that all it that same market of I've seen a lot of that in the b2c market. And I was wondering if you're going to see some of that pop up in the b2b market. Are you seeing any trends in that area?
Jania Baily
Well, I think it's too early right now to see trends as a result of the pandemic. I do think that yes, there are development teams, especially in some of the investment groups that do look for clusters of business type, say, I guess they develop a comfort level and a knowledge about a type of business industry and they kind of run with that I think we'll consider continuing to see that the reality is with 3600 different concepts and more than 80 Industries, it's very difficult to be an expert in all things. So, I think the ownership in clusters within an industry Yeah, I think that was sand and I think you will see it in b2b as well as b2c.
The Mag
So now any advice for the let's take you to your two main constituents. Any advice for that person that runs a franchise in a local market to weather the storm?
Jania Baily
In well, yes, my FranNet people and the franchisors that we've worked with, and the franchisees that we play, you know, this is a time for everyone to, to understand, first of all, this is going past, this is not going to last forever. And so, button down the hatches in terms of managing that cash flows. So that you are here, when the tide comes, looking very hard at your P&L statement and saving cash where you can also be very positive, and we just started a new hashtag for our group that's, you know, beyond the crisis. And I think that sums up my recommendation is to begin to look at what's going to be next and prepare. How are you going to come out of this, put your marketing plan together, your you know, bringing people if you had to lay off people helping bring them back on and expanding or hiring, really thinking through a 30, 50, 90, 120-day kind of plan to make sure that you don't get caught up in just the onslaught of this negative environment bombards us from the health care idea right now?
The Mag
Yeah, I agree. I think that during this time, no matter what your situation is, you know, it's a fight to stay positive. And I think it's important from a brand standpoint, no matter what your brand is, is to stay out there in some manner, to show that you still number one exists. So, your customers don't forget you. I think that's important, some sort of brand ubiquity, where you can go out there, well know that you're still in business and that you want to help and it may not be exactly what you do for your day job, but let them know, you have resources and you're willing to help and, and just, you know, try to stay as top of mind as you can in a positive manner, I don't think you can kind of stay in a bunker and then pop your head up in three months and say okay I am back
Jania Baily
Great, I got an email this morning from a massage concept that you know, I've utilized their services, reminding me that they're there and you know, they miss your customers. And they will be reaching out as soon as the doors can be as in began. And you know, my hairstyle is reaching out and saying they miss us as much as we miss down. Those kinds of things are important and not expensive. And it does resonate very well with your clients to know that you're still there. And that when this is over, they will be there for you.
The Mag
And I would imagine you want all the people out there now that are wondering if they are going to have jobs at the end of this to think about FranNet as a possible way to kind of control their own destiny, no matter how this shakes out, right?
Jania Baily
I definitely would offer our services. You know, it's that one thing when you're sat at home, you don't have anything else to do, you can be doing research and investigating and seeing if this is something that long term you want to explore. So, it could be a positive use of your time. And obviously, we would love to do that.
The Mag
So, then what's the first step if somebody wants to explore a FranNet as an opportunity in their market?
Jania Baily
They would go to our website and frannet.com and " frannet.com ". And there are several calls to action, they can actually take what we call an assessment, readiness assessment. And it helps them kind of see where they fit in and are they in fact, kind of geared towards business ownership, they can immediately reach out to talk to a consultant in their market. They fill out a short form there was work they can call directly to that consultant in their market. So, lots of different ways to connect with us. And the one thing I can promise none of our people are in any sort of pushy roles I never am but especially now you know, we're very respective of the fact that it's a scary time. It may be a good time to just explore but it’s definitely not pulling a trigger bot. So, we try to support our clients and wherever they happen to be in the process.
The Mag
Well Jena, thank you so much for sharing your story today.
Image Source: https://frannet.com/our-team/jania-bailey/
