I recently attended the Franchise Council of Australia Convention and enjoyed two days in Melbourne. During this time, I enjoyed meeting many of you reading this now, gaining different perspectives on the sector, learning more about best practice and was pleased to see the topic; Your People, Your Team, Your Potential, the attention it deserves.
The conference was branded “Ingredients for Success” and while I thoroughly enjoyed it, I don’t believe there is a secret sauce recipe for business success. That said, there were many invaluable lessons learnt from some of the most experienced people in franchising and one of them stood out in particular – Dustin Hanson from InXpress. His session shared some insight that every franchise in Australia could learn from.
Hanson is the CEO of InXpress in the United States and has been involved in the franchisor side of the brand since 2009, after initially being North America’s first franchisee. During this time, he has overseen dramatic growth for the franchise, from $2 million in revenue to nearly $115 million today.
How does one man change the course of a company so dramatically?
It seems to come down to brand. But not just branding, but brand integrity. According to his presentation, Hanson has successfully created a high integrity brand, by fostering an incredible network of franchisees with some very important mutually beneficial systems.
Brand: A value builder
One of the most important things Hanson shared is that a brand has a flow-on effect to the value of every business within the franchise. Sometimes, this isn’t recognised by businesses. If some of those businesses aren’t espousing the brand, then they are diminishing the brand value for the entire network. When brand value increases, the multiple of which a business is sold will increase, which is good for everyone in the network. And we have seen over the past 12 months what happens to the value of franchised businesses once a brand is eroded.
Brand: Why cohesiveness is critical
To create brand value, there has to be cohesiveness throughout the network. Hanson shared that in 2009, InXpress had a low number of new units opening, the average profitability was below 10% and new franchises were performing poorly. To change this, InXpress started with the top in mind – the top 20% of franchises were extremely healthy and successful and Hanson made it his mission to “get into their homes”.
He learnt everything he could about them – as people, not as business owners – and began to understand the common values, drivers, purpose and themes that made them so successful. This approach allowed him to identify the core elements a successful franchise partner needs and begin to grow the company based on finding people like these ones. In an interview, he referred to this as, “carefully selecting the best stewards of the brand”. For InXpress, this means those who have a greater purpose, those who are willing to continually learn, those who are persistent and those who never think of themselves as above hard work.
Brand: Internal trust gives it integrity
After creating the foundation of successful franchises, Hanson did what perhaps is the single most important thing, and the most important lesson any of us can learn from him. He created trust throughout the network. Trust between franchisor and franchisee, trust between franchisee and franchisee. InXpress provided incredible support to the network and they rallied the high performing franchisees to support the recruitment and education for new franchisees. They also gave their time freely to existing franchisees to assist with improving profitability. This mutual support created an environment where success wasn’t created through a franchisor versus franchisee culture, it was driven by collective support to create success.
What did all of this do?
This unique franchise eco-system allowed more franchises to perform better and created a culture of collective success. It gave a level of consistency in service, culture and accountability that created a unified, high performing, highly reliable brand and in turn, drove brand value through the roof. The result of those changes were 42 new franchise units, 24% growth, and new units began performing like the best performers – not on the back foot.
There isn’t a secret sauce recipe to success and there probably won’t ever be. But looking at the entire franchise eco-system and creating a culture of support did so much for InXpress.
What do you think? If you had a secret sauce for franchise success, what would be in your recipe?