Typical Learning Curve of an Average Franchisee

Every new franchise goes through an intense period of learning and adjustment before they master the system they have purchased. This is typically a time when emotions run high and range from joy to complete frustration. The good news is that the phases are predictable, recognizable, and therefore can be managed and accelerated until franchisees reach mastery in “The Zone.”

The five phases start with “The Launch,” which is characterized by the joy of opening. This is followed by the toughest phase, “The Grind,” identified by the frustration of putting forth a huge effort for modest results. That’s followed by the satisfaction of success in “Winning,” and then mastery of the model in “The Zone.” The final phase, which is as important to recognize and prepare for as any of the others, is “The Goodbye.”

To accelerate through the learning curve toward The Zone you’ll need to manage and take responsibility for your KASH (Knowledge, Attitude, Skills, and Habits) in each stage. This involves understanding yourself and taking responsibility, even to the point of helping the franchisor tailor their support to your specific needs within each phase. Before dissecting the five stages of the learning curve, let’s look at the ways franchisors give their KASH to franchisees.

Three Modes of Franchisor KASH Distribution
Franchisors will help you accelerate through the learning curve and reach “The Zone” through training, consulting, and coaching.

Franchisee Support Mode One: Training

Training teaches you how to perform. It conveys the knowledge you need, models the skills required, and provides opportunities to turn what you learn into habits. It is highly structured and remedial, assuming franchisees know little. Communication flows downward from the trainer to you.

Franchisee Support Mode Two: Consulting

Consulting is about fixing problems. After initial training, competent franchisors consult with their franchisees on an ongoing basis. The franchisor identifies your problems and crafts solutions. Your role as a franchisee is to execute the solutions. Again, communications flows downward.

Franchisor Support Mode Three: Coaching

In coaching mode, the franchisors hold franchisees accountable to implement the knowledge they possess to the best of their ability and to execute the high priority activities which produce the greatest results. They hold franchisees accountable for implementing what they’ve learned and crafting their own solutions. Coaching emphasizes asking questions, goal setting, action planning, implementation of the plan, and accountability. In coaching, the solution resides with the franchisee, not with the coach. Now let’s look at how to successfully navigate the learning curve (see chart above).  

The Performance/Satisfaction Curve of a Franchisee

The Launch

When a franchisee signs their franchise agreement, they are usually filled with a sense of joy and empowerment. They eagerly serve customers and treat themselves and their employees gently. While money is tight, they prepared for it to be tight, and they are right on plan. Because they are not yet skilled their results are as poor as they will ever be. But they recognize this is temporary. Let’s look at the typical start-up KASH – knowledge, attitude, skills, and habits. KASH will fluctuate during each stage of a franchisee’s evolution.

Knowledge
When you launch your franchise, much of your past business knowledge becomes irrelevant.

Attitude
For the first time in a long time, you feel as if you are being called forward into action. Appropriately, you are not focused on profitability, you are focused on learning. This is important - you need to acquire the KASH necessary to survive…and then thrive.

Skills
You probably stink. As a famous motivational speaker once said, “Anything worth doing is worth being lousy at for a little while.” However, be mindful that franchisors are typically skilled at imparting knowledge to their franchisees, but often ignore their skill development. For example, they may have no program to develop your sales skills. Identify the skill deficits that matter and find an outside training program that can help you. Budget money, perhaps even several thousand dollars, to invest in programs and training programs which fill in your skill gaps. Does that sound excessive? Well, you can chop down a tree with a dull axe. It just takes a lot more swings, effort and energy. In addition, if the franchisor does not offer continuation training 3-6 months after you open your doors, ask to take the initial training program a second time, even if this means paying additional fees. How quickly you develop your knowledge and skills will determine how quickly you ramp up your business and generate positive cash flow. Many underperforming franchisees become arrested in their KASH development, never acquiring the necessary KASH to successfully navigate the learning curve into Winning.

Habits
The second you open your doors, your habits will start forming - either the good habits of spending time executing activities that generate the most results or the bad habits of wasting time on busy work which produces little. Document and pay attention to where you spend your time. You will know you have completed The Launch when you start becoming frustrated and disillusioned with the learning curve of your business. Welcome to The Grind.

The Grind
Think about the last time you picked up a new hobby, like golf. Learning was fun and at first. Pop ups, ground balls, and Texas-sized divots were no big deal…they were part of the learning process. Then something happened. The permission you gave yourself to make mistakes was replaced by a demand for results equal to the money and effort you’d invested. Did the game of golf really change or did the golfer’s relationship to the game change? As franchisees move through the learning curve they change their relationship to their business. If you relate to the pain and frustration of The Grind as a bad thing, let us invite you into a new, more powerful perception. The Grind is a good thing! The Grind is a sign of progress, because after the Grind comes Winning. You can’t jump from The Launch to Winning without experiencing some Grind. Let’s take a look at a franchisee’s KASH when in The Grind.

Knowledge:
Knowledge is steadily increasing, however gaps still exist. Whereas in The Launch franchisees don’t know how bad they are, once in The Grind they typically do understand how bad they are and how much further they need to go to win. This realization can be disempowering, terrifying, and frustrating.

Attitude
Here is where franchisees and franchisors disconnect. This disconnection occurs when franchisees need franchisors the most. An objective look at results would show a steady increase in franchisees’ performance, but because most franchisees can’t remember the last time they struggled – because they forget how hard they had to work early in their careers, many get sucked into the false experience of failing although they may actually be on or ahead of plan! Franchisors don’t measure false experiences, just results. They may not know to support franchisees in this stage. Franchisees respond to The Grind generally one of four ways.

1. Fighters fight. They create huge problems where tiny problems exist. They blame the training, products, competition, support, marketing, pricing, and even their customers. They create a strained relationship with the franchisor support team. They decide the system isn’t working and make changes based on what worked in their past business. These changes usually don’t work, prolonging the learning curve and miring the franchisee in The Grind.
2. Overly optimistic franchisees get caught up in false hopes. They hope things will get better, although they have no plan of attack to make things better. If you are prone to false positive thinking, learn how to shoot straight and say what you are really experiencing so the franchisor can offer you support.
3. Overly pessimistic franchisees will have a Chicken Little “the sky is falling” experience. If you are pessimistic by nature, trust the data and discount your interpretation of the data. Give yourself permission to learn, letting others contribute to you also.
4. Emotionally mature and balanced franchisees manage their emotions, don’t buy the false experiences, and give themselves permission to learn. Although they are not crazy about mistakes, they learn their lessons and move on.

Habits
In The Grind habits are beginning to gel. This is a critical time in the learning process, because practice doesn’t make perfect, only perfect practice makes perfect. Practice makes permanent. Each business has high priority activities which produce most of the results. Forming winning habits will propel franchisees to a breakthrough in results and into Winning. Strategies to Successfully Navigate The Grind

• Work your business one day at a time. Plan your day and work your plan. Forget what happened yesterday. Don’t worry about tomorrow. Focus today on developing the necessary KASH you need to succeed.
• Get emotional support. Find someone who can lift your spirits and call them every morning. Tell them what you are going to achieve that day.
• Stay out of “survival.” If you think you are failing, instead of playing to win, you are going to play not to lose. Play to win. Do not play not to lose. Before you are in The Grind, think about the kind of decisions you would make if you were afraid of losing. What expenses would you cut? How would you modify your life or business? Write your answers down. That way, if you find yourself going down that tunnel, you can cut yourself off before you go.
• Learn and move on. If you aren’t making mistakes, you aren’t trying hard enough.
• Reach out for help. Let the franchisor contribute to you. Stay in regular communication.
• Remember, you weren’t immediately competent in your last position.
• Work with the franchisor to get training to increase your knowledge and skills, consulting to fix your problems fast, and coaching to hold you accountable for executing the knowledge you do possess and to help you manage your emotions.
• Learn and keep close track of key performance measures (labor cost, cost of sales, etc.- the franchisor will teach you). If you disagree with the franchisor’s solutions, execute them anyway.

Winning

As franchisees acquire the KASH to succeed, they begin to experience the ability to create positive outcomes. In The Grind outcomes were something that happened to them; in Winning outcomes are designed by them. Franchisees in Winning see their desired future as now occurring. Winning creates a feeling of empowerment. Franchisees in The Grind feel trapped and powerless, like somehow the business owns them. In Winning, franchisees are empowered. They own their business. Keep in mind, all the time, the business never changes. The franchisees change! Using a poker analogy, these franchisees are holding a Winning hand. However, they are not yet out of the woods; they can still fall back into The Grind. How? By folding the winning hand. Many feel compelled to make “minor adjustments” like emphasizing certain aspects of their business and deemphasizing others. Then…it’s back to The Grind until they can figure out what went wrong. When franchisees enter Winning, a sophisticated franchisor will shift their support strategies to making sure franchisees change nothing. As you enter Winning, make sure someone is watching your back. Consider hiring a professional business coach to make sure you don’t change the winning formula. Franchisees in Winning face a second risk. One person can only do so much. Steady growth will eventually cause an organizational breakdown unless franchisees develop their teams. Once it is clear the business will survive, it’s imperative that franchisees impart the franchisor’s KASH formula of success to their team. However, many franchisees have difficulty letting go. Because they haven’t fully developed their teams, some can’t handle the growth and the business implodes. They become a casualty of Winning. Franchisees in Winning need to work with the franchisor to be trained as a trainer.

Knowledge
Franchisees in Winning know what they are good at and what they need to do to produce results.

Attitude
Winning franchisees are empowered franchisees. They are re-engaged in the reasons they started their business in the first place.

Skills
They are good at whatever they need to be good at to win. Their next step is to become skillful trainers, imparting the KASH formula of the business to their employees.

Habits
Franchisees know the high priority activities which produce the greatest results and spend their time engaged in there. They are generating greater results with more ease and a high degree of predictability. Strategies for Successfully Navigating from Winning to Peak Performance

• Don’t fold the winning hand. Develop your staff and let them contribute. Refine your systems and document your processes and procedures.
• Get training from the franchisor on how to become a trainer and coach.
• Request coaching from the franchisor, having them hold you accountable for staying the course and not folding your Winning hand.
• An out-of-the-box strategy to drive performance is to volunteer to mentor another franchisee or to act as an assistant trainer in the franchisor’s initial training program.

The Zone

When franchisees enter The Zone, they produce outstanding results as if they were on auto-pilot. Keep in mind, most of what franchisees are looking to accomplish with their business will occur in Winning. Many Winning franchisees will not enter The Zone, nor is it a requirement for success. Franchisees in The Zone have highly developed teams and manage their businesses according to performance measures, such as sales, labor cost, product cost, and others. When in Winning, franchisees need to think about what they must do to win, creating and executing a plan. Franchisees in The Zone have so committed the KASH success formula to memory that they now perform at masterful levels with seemingly little effort.

Knowledge
Peak performing franchisees are experts in their field. They know their customers, products, and their industry, and they know the franchisor’s corporate structure inside and out.

Attitude
These franchisees are empowered with the sense of being able to design positive outcomes. Some start focusing less on money and more on how to benefit their community. Others enjoy the material rewards that success can bring.

Skills
They have highly defined personal and organizational skill sets.

Habits
These franchisees know what activities produce the greatest results and structure their day to expertly execute these activities. Peak Performing franchisees are not without risk however. Believe it or not, their greatest risk comes from winning. After conquering the last known civilization, famed military leader Alexander the Great cried out in anguish, “Alas, no world’s left to conquer.” The thrill of living occurs in playing to win, not in the actual winning. Peak performing franchisees need to invent a new game, such as running multiple units, mentoring other franchisees, or getting more involved with their communities. If not, they may experience the anguish of having no more worlds left to conquer.

How the franchisor can help you

More training: Not for you; but get training for your staff and offer to train other franchisees, giving you an experience of greater purpose.

Less Consulting: Start challenging your staff to identify their own breakdowns and create their own solutions. Give them decision making power. Use the franchisor’s operational audits as their scorecard.

More Coaching: Ask the franchisor’s support staff to never let you win. When it looks like winning is inevitable, have them challenge you to design larger and loftier goals… designed to keep you motivated and in the game.

The Goodbye
When you bought your first home did you think, “This is a house I will live in the rest of my life,” or were you thinking shorter term? When you took your first job, did you think, “This is a good place to work for 40 years”? For whatever reason, many people who look at franchises elect not to move forward because they can’t find the business they want to operate for the rest of their lives. People who invest in franchises shouldn’t look more than five to ten years out. You may sell your franchise rather than retire from it. Many consultants will tell you the time to sell the business is when a business is at its peak market value. This doesn’t always hold true in franchises. There are two times to sell, one is not necessarily better than the other. It’s your business, so you get to choose which..

1. When you have accomplished what you originally set out to accomplish and there is nothing left to accomplish. If you aren’t inspired to train for your next fight, it’s simply time to choose your next sport.
2. When you know you will accomplish everything you are looking to accomplish, although it hasn’t all been accomplished yet. Sure, you could wait around for those results to occur, but work has lost its challenge and you don’t feel like waiting.

Sell your business when you have nothing left to prove. Many franchisees hang around too long and become bitter. Just as it is completely natural and expected for franchisees to generate positive attitudes in The Launch, it is just as natural for franchisees who win to become bitter if they don’t create a new challenge.

Knowledge
Franchisees in The Goodbye stage of their business have expert knowledge. They have seen it all.

Attitude
There is a slow and steady erosion of their attitude. The business has lost its challenge and they are no longer inspired. Since the business is working, there is little motivation to sell. However, their attitude will eventually impact their results, and the business will track downward. Most franchisors report significant sales increases when such a business transfers, often in double digits. What do these new franchisees have that the old franchisees don’t? More knowledge? More skills? Better habits? Certainly not. They have a more productive attitude.

Skills
These franchisees are highly skilled. However, some of their newest skills may be cutting corners, gossiping and complaining. No longer motivated by achieving peak performance, they may be driven by not being hassled by employees, customers and the franchisor. Over time, skills will erode and negatively impact performance. Others learn to delegate and start detaching more from the business. They develop other hobbies and interests which the business funds.

Habits
Many of these franchisees walk the path of least resistance. Chances are they have gotten out of the habit of personal development and continual improvement. They have gotten into the habit of just doing enough to continue to maintain their current lifestyle. Results will eventually flatten or track downward. Franchisees in The Goodbye stage of their business usually say long goodbyes. They need the franchisor to ask, “What is left to be accomplished? What more is there to do? What’s next for you?” However, most franchisors don’t measure attitude, just results. Most don’t know how to coach franchisees out of their business and into a new venture or challenge. We recommend franchisees in Winning hire skilled business coaches to help them design, visualize, and construct the future, while letting the franchisor’s operational support team help them with the present. When selling a business, there are two general types of franchisees’ responses to the resale process. The first group has a realistic idea of their business’ fair market value. They contact the franchisor’s franchise sales representatives and discuss their intentions. They may enlist the services of a business broker to generate leads. They exit with dignity and grace. The second group dismisses the notion of “fair market value,” assuming this concept does not pertain to their unique circumstances. They assign a monetary value to their pain and suffering in The Grind and add that to the asking price of their business. When the prospective buyers do their due diligence and question them about the business, they experience it as a personal attack. They exit screaming and yelling.

How the franchisor can help you:

More training:Get training on how to value a business and what happens before, during, and after the sale.
More consulting: Find out what businesses have sold for in the past. What is fair market value for your business? What terms should you consider? How will the franchisor support you and the buyer during the resale and transition of your business?
More coaching:Selling a business is emotionally taxing. You have so much mentally and emotionally invested in the business, separation is difficult. Additionally, what are you to do next? Having nothing to do will make you want to hold on to the business longer. Work with the franchisor to design what is next, either inside or outside their franchise system.
Whether you are a franchisee or are considering becoming one, this information is designed to help you navigate the different phases of being an entrepreneur and business owner. Manage each phase and manage yourself to experience success on all levels. Always continue to learn. Engage the franchisor’s support staff. Stay focused on your goals, plan your days, and work your plan. Doing the right things every day will help you achieve the life that you imagine.

Contact
Joe Mathews
Franchise Performance Group
Joe@FranchisePerformanceGroup.com
860-567-3099