How did you get into the franchise development industry?
I started working with a private equity-backed “roll-up” company that used franchising as its growth mechanism, we became a top-ranked franchisor. My experience prior had been working with venture capital firms and family office-owned businesses, but never had seen the capability of franchising for a brand and a business model. My first experience helped grow the brand so quickly and effectively and brought in some of the most capable, intelligent and experienced people as franchisees I had ever dealt with and they were investing in the business instead of us paying them as employees. I was hooked and recognized that the model could be used in a wide range of different businesses and business models.
What’s New in the Business or in the Franchise Model?
A wider range of types of franchisors are entering the market as newly established franchisors and there is more collaboration amongst strategic partners that may be franchisors as well. Also, there is a wide range of financiers helping support franchise growth, and development of business credit vs personally guaranteed credit, which allows a franchisee to fund its development costs using a traditional SBA Loan and then refinance it with newly established business credit provided by a traditional commercial bank. It is no longer an SBA-only financing narrative, I am directly involved with this movement toward business credit.
Where do you See Opportunities or Challenges for the Franchise/Business Moving Forward?
I feel the greatest emerging growth opportunities are in the smaller business owner segment, for example, single unit owner operators that can then establish a second, or third, franchise unit with an employee of the first. There seems to be a desire for environment, the challenge is typically tied to financing the cost to establish the initial franchise location, solutions include working with outside passive investors, but most often selecting a franchise opportunity that has a low entry cost and perhaps an initial franchise fee that is paid over some time, as income increases, etc.
What is your Goal for the Business Moving Forward?
My immediate goal is to help franchisors establish a new extension of their businesses that can help individuals own their businesses in a cost-effective way that changes the lives of all parties for the, significantly, better. I am also interested in supporting less traditional businesses, such as intellectual property-based service businesses using software, and related technology to reach a wider end-user base through franchising. These can be massively scalable opportunities for franchisees and then of course for the franchisor, as well.
Your most difficult moment in the Franchise Business?
As a franchise development specialist, the most difficult moment is a recurring theme. It’s always assessing the overall goals and objectives of the Franchisor Candidate within the context of evaluating the viability of the Candidate’s franchising vision. If we agree that there is a high likelihood of success together, then we move forward.
What Do You Do in the Franchise Business Every Day?
I work closely with business owners to help evaluate the franchise model and look at ways to execute a franchise system for a brand. A big part of my day is helping people evaluate whether the franchise model could work or not and shedding light on how the franchise system works. Franchising isn’t for everyone, but for those that it does work for, it is an electric way to scale a brand and allows the entrepreneur to hang on to the equity and control of the brand.
Who is the Ideal Franchisor Candidate?
It’s a question I have complete clarity on. Let’s start with who it’s not, and let’s be careful, there are lots of hybrids, lots of shades of gray, which is what makes this work I do so fulfilling. The ideal Franchisor Candidate is not motivated by money alone, but they are motivated by financial success. In franchising, financial success is a two-way street, if the franchisee is successful financially, the franchisor will also be successful financially, so financial motivation is important but cannot be the sole source of motivation. I feel the ideal Franchisor needs to be motivated by a willingness to mentor, to provide a roadmap for others to improve their lives, not just financially, but emotionally by having ownership and control over their financial success, which trickles down to family, loved ones, etc.
To connect with Gregg Rondinelli, visit him on LinkedIn. Or Listen to Gregg on the FMS Podcast.