Better Business for Small Business Leaders

Unlocking Franchising with Leslie Kuban: From Diverse Opportunities to Business Success

• Chrissy Myers • Season 1 • Episode 6

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Ever wondered why savvy professionals leave their corporate jobs to buy franchises? Join us as Leslie Kuban, a franchising expert, shares her wisdom on the dynamic world of franchising. Learn how leveraging proven business models and marketing strategies can significantly reduce the risks of starting a new business. Leslie also shares personal anecdotes from her family's experience with franchises, giving you a behind-the-scenes look at the unique advantages of family-operated ventures.

Prepare to be surprised as we explore the varied landscape of franchising opportunities beyond the expected fast-food chains. Discover franchise categories you might never have considered, such as roll-off dumpsters and cost analysis services. Leslie helps clear up common misconceptions, emphasizing that franchising is far from a passive investment. We also compare independent business ownership with franchising, underscoring the importance of teamwork, following established protocols, and the critical role of franchisor-provided education and training.

As we wrap up the episode, Leslie offers invaluable advice on the franchise learning and matching process. Learn what it takes to find the perfect franchise fit, from robust training programs to financial assessments. Plus, don’t miss Leslie's practical tip for boosting productivity: a simple change to her morning routine that yielded extraordinary results. Whether you're considering franchising or looking for ways to enhance your business acumen, this episode is packed with actionable insights for your entrepreneurial journey.

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🔗 Follow Chrissy on LinkedIn for behind-the-scenes insights, leadership tips, and updates on her journey as the CEO of two thriving businesses.

📘 Grab your copy of 'Reluctantly Resilient' to learn how Chrissy turned challenges into opportunities and how you can do the same in your life and business.

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💼 Visit AUI to see how Chrissy's employee benefits expertise can help you build a healthier, happier workforce.

Speaker 1:

I have learned so much from my fellow franchisees, so that's actually part of the magic of being a part of a franchise system is not just what you learn from the brand, which should be very robust, very thorough, very methodical. Good franchises offer a very detailed, step-by-step, layered way of learning this new business.

Speaker 2:

Today we're talking to a small business owner that also helps other small business owners discover and determine if they should be small business owners and how to buy a franchise. So today is Leslie Cuban and I am so excited to talk to you. Leslie Chrissy, thanks so much for having me. Oh, absolutely so in 30 seconds or less, can you tell me what you do and how you got started doing what you do?

Speaker 1:

I would love to Thank you. So I help people who want to be entrepreneurs. Usually they've had a career in corporate America but now don't want to work for the man anymore. They want to work for themselves. I helped them figure out if one of the 3,800 opportunities in franchising could work for them Wow. So how did you find franchising? Through my family. Actually, it's been in my blood since I was eight years old. My dad, like a lot of the people I'm working with now. He had a great corporate career. Internal division mergers impacted his career path in a way that didn't suit him, so that had him look for what can I do on my own? And that led to franchising. So I grew up in small business, family business and different industries in franchising and for about the past 20 years I now still own a franchise in franchise advisory. There's a franchise business window in a window, other people to franchise and, and so that's how I got started.

Speaker 2:

Okay. So, having grown up in a family business environment, how has your experience shaped your approach to working with other family businesses? I would assume that a lot of franchisors franchisees start as family businesses too. Right, most are family businesses. I would assume that a lot of franchisors franchisees start as family businesses too.

Speaker 1:

Right, most are family businesses and that may mean couples, you know, partners working together. It could be like my situation parent-child relationship in a business, you know, and it's a double-edged sword, like on the one hand you know family, you know family, blood is thicker than water, so there's a loyalty factor, there can be a trust factor there. But, especially in a parent-child business relationship, sometimes the parent still acts like the parent and the child still acts like the child, or vice versa. So there can be some weird family dynamic stuff. But in my experience the pros have definitely outweighed the cons.

Speaker 2:

So can you talk to me a little bit why people would buy a franchise or create a franchise? Either one.

Speaker 1:

So we'll start with the first one there. Why would they buy? For a lot of people they want to be an entrepreneur but they've never done it before and they don't necessarily. They may not have the idea, they might not have the burning passion to go out and start a business in XYZ industry, so they need somebody else's idea, or they may not have the risk tolerance to start their own endeavor from the ground up with good franchise systems and not all of them are, but with good franchise systems there's a lot. There. There's a business model. There's proven marketing strategies. There's proven marketing strategies. There's proven hiring strategies Things that someone doesn't have to learn completely on their own.

Speaker 2:

And why would someone become a franchise or create a franchise?

Speaker 1:

So there's good reasons and not such good reasons to do that. So entrepreneurs will consider how do I scale my business? And one avenue is franchising, becoming the franchisor, selling licenses to other aspiring entrepreneurs and growing the brand and spreading the mission of the business. You know, some do it to raise capital and that's not a good reason to you. An entrepreneur should not be reliant on the franchise fees, the initial fees that franchisees pay. But some people will do that. They look at franchising as this capital growth strategy.

Speaker 1:

I think for a lot of entrepreneurs they do see it as an effective way of growing beyond their own means, beyond their own talent, beyond their own time, beyond their own capital. But they still have to be well capitalized to do it well, to be the franchisor and to do that well. So I think the motive is this is a way to grow. It's a way to spread. You know, spread our story, bring our products and services that we love to other communities. So there usually is a passion for delivering their product or service and a passion for helping other people to be entrepreneurs. But it has to be done responsibly for it to work well.

Speaker 2:

Wow. So in the time I've spent with you you've educated me a fair amount on franchises and you've talked about some different misconceptions that you know it's not all fast food and it's not a passive investment. So can you elaborate more on those points and kind of give the listeners some opportunity to learn about how you help business owners determine if owning a franchise is their next business venture is a great step, if leaving corporate America and becoming a small business owner is the right step for them?

Speaker 1:

Lots to unpack. Yeah, so you know, on the food, the food topic this is a conversation I have every single day in my business that when most people, if they haven't really looked at this yet at all, if they hear franchise, they're thinking we're going to be talking about French fries or sandwich sandwiches. So which which I understand that perception, because that's those are the big stories. You know, those are the big, visible, iconic examples.

Speaker 1:

When you think of franchise and in the world I'll speak to just North America franchises born in North America there's about 3800 of them and about half of them are in some kind of food restaurant or food retail kind of space which leads the other half largely in service industries. So you know, food is not for everybody. In fact, food is not for a lot of people. Yeah, so what people are typically surprised by is how many other categories, such as a slew of home services franchises, all kinds of business services franchises catering to the needs of other businesses there's a lot of what I would call consumer services or personal services would be things like pet care or fitness or education or even some healthcare types of businesses. So you don't have to be into food to be a good candidate to consider franchises.

Speaker 2:

So, as you have, thought about, or all of the experience that you have with 3,800 franchises and I know FranNet does a lot of those different franchises Is there ever a category that you're like, wow, I never thought that would be a franchise.

Speaker 1:

Yes, I recently learned of a well, I shouldn't say recently, but one of the ones that really surprised me was there's a roll-off dumpster, port-a-potty combination type of business model. Yes, I've seen that. So that's a franchise. That is a franchise. Oh yes, there are franchises in cost business, cost analysis and reduction, okay, all kinds of professional services that you wouldn't necessarily think, well, that's a franchise. So really, the only kinds of industries where I don't see franchising being an appropriate model are industries that change so rapidly. So software, you know, high tech type stuff. It changes every day and they may use these technologies in a franchise business model, but the service itself just doesn't make sense. So there's all kinds of good stuff.

Speaker 2:

So let's go back to that other misconception that a franchise is an absolute. Like you start, as a passive investment. Can you give us some education on that?

Speaker 1:

I get lots of calls that I think people think well, it's a system, it's a process, it's already baked, so that must mean that it doesn't. I don't have to do much as the owner. And the truth, this is education conversations I have all the time with people that. So there are opportunities that are structured for people who perhaps have a full time career or they own other businesses and the franchise is not going to be their only or primary gig even. But you still have to have the guidance I give people in that first year of launching that business. You need to have 25 hours a week that you can dedicate to the business.

Speaker 1:

That doesn't mean you have to be physically on site Okay, in fact there are a lot of these models where if the owner is physically there too much, they're in the way and disempowering their employees. So but it does mean one has to have enough flexibility in their day job schedule to take the calls from your manager. I mean, especially in that first year of business where you're probably going to have some hiring misfires. It takes some time to get that that rockstar team in place and there's going to be fires that you're putting out on a day-to-day basis for any new business, including the most well tooled franchise model. So people just have to be real holistic, that there there is a level of time commitment that they have to be able to give their new business if it's going to succeed. So it's not passive, no.

Speaker 2:

So is there a little bit of misconception between business owners that Rick and Mortar started their business it is not a franchise and individuals that own a franchise. Have you noticed that? Do you see any of that between like, do they? Do they speak the same language or they have misconceptions about each other?

Speaker 1:

Do you mean independent owners versus franchise? Yeah, you know the terms. I don't Thank you for the education. So I mean yeah. So yeah, there's different dynamics in owning a business that's part of a franchise system. You you definitely have to be a team player. Okay, because you immediately have a business partner which is the franchise company from whom you bought the franchise license, and they expect you to follow rules. Right, yes, yes, the short answer is yes, but I think another misperception is that being a franchise owner is just like being an employee. It's not you're. You're making the decisions, running your business every day.

Speaker 1:

There's actually quite a lot of creativity, even in franchise systems. Tell me more on. That works, particularly around community marketing, community involvement. You know things that would be considered marketing or lead generation. Business business evolves. Franchises have to evolve. They have to have new ways of addressing their markets. So you actually see quite a lot of collaborative creativity between franchisees and franchisors on how to offer new services to their customer base or reach their customers in new and different ways. So there is a lot of creative muscle that can get flexed.

Speaker 2:

So you're telling me that it's not a completely solid box and a fence. So you have the ability to be creative, ability to have new ideas you can collaborate potentially with.

Speaker 1:

There are exceptions, but I would say the rule is all businesses have to evolve to stay competitive, including franchises, and so that that is an ongoing collaborative effort between all the stakeholders.

Speaker 2:

Okay, involved. So one of the things that you talked about earlier around franchising is education the ability, the training that a franchisor gives the franchisee. Did I say that right?

Speaker 1:

Yes.

Speaker 2:

Okay, can you speak a little bit more to that and kind of what makes a good franchisee in that education space and kind of makes it a good relationship, how that can work together.

Speaker 1:

It goes back to being collaborative. Ok, you have to play nice in the sandbox with everybody else. You'll probably have other franchise owners in your market as well, so you've got to call and there's a great education, learning opportunity from all the parties. I have learned so much from my fellow franchisees, so that's actually part of the magic of being a part of a franchise system is not just what you learn from the brand, which should be very robust, very thorough, very methodical. Good franchises offer a very detailed, step-by-step, layered way of learning this new business.

Speaker 1:

Most people entering into a franchise, they're choosing something that is new. Yeah, it's not a type of business that they worked in in their prior career, and that's usually part of the appeal. Actually, a lot of people have the desire to spread their wings and do something new, but they don't know how to do it. So that's what they're buying into the franchise system for is a robust initial and ongoing way of learning this new business to get up and running and be proficient with it quickly enough to be successful with it quickly enough to be successful. So, but I really want to underscore that one of the biggest benefits it yes, it comes from the franchise company from whom you bought the license. But equally, learning from your fellow franchisees is a huge benefit. I can certainly speak to that from my own experience. How many more we troubleshoot things together, we brainstorm things together, we try new marketing initiatives together, we vent to each other.

Speaker 2:

So we go on vacation together.

Speaker 1:

So the relationship aspect and how one can really round out their skill sets. So people come into franchises from different backgrounds, so John may bring a great finance background, whereas Joan has a sales and marketing background, and they're in each other's training cohorts and they are working together and you find that franchisees can really round out their skill sets by osmosis from working collaboratively with their fellow franchise owners.

Speaker 2:

So let's pivot from working with the franchise owners. Let's talk about that initial step into purchasing a franchise. I know a lot of times with small business owners that are independent. Sometimes we create a business plan, we go to the SBA. We get money. Other times we bootstrap it or we get financing from different areas friends and family. Can you talk a little bit about the financing and some of the qualifications that happen through franchising, because it is a much more structured process than I'm just going to hang a shingle.

Speaker 1:

Yes. So I would say it's actually largely similar to a non-franchised route of getting financing, with the exception of if we're talking about really large franchise brands I mean, the franchisor is not the bank but they very well may have relationships with banks, banking systems that know their brand, know their business plan, but it's really only about 6% of franchise systems that have over 500 open operating units. It's only about 25% of franchise brands that have 100 or more open and operating units.

Speaker 1:

So, what's the average? So 25. Okay, 50% of franchise companies have 25 or less open units, so most so. When we're talking about franchises, we are still mostly talking about small companies, so I had no idea. Yes, that's a comment, that's a comp. You know, people think franchise, they think big, global, global brand. But you can count on your fingers and toes, really, the number of big global Dunkin Donuts, mcdonald's types brands.

Speaker 1:

So with businesses like that, and even even when a brand has, I'd even say, 50 to 100 units open, there's enough of a pathway there that there may be a preferred banking relationship. However, getting the loan still largely depends on the borrower's capability. You still have to have credit, you still have to have liquidity, you still have to have income. There's a credit box that the bank is looking for from anybody who's borrowing money to start a business, whether it's a franchise or not. So it's still. I think the appropriate way to look at this is a good franchise system. The business plan can be helpful. It might expedite things, but it's still gonna come back to the borrower's personal balance sheet. Okay.

Speaker 2:

So there's a lot of lessons that we can tie, whether we're independent small business owners or we're in the franchise world, that are very similar. There's a lot of parallels there are. Thank you for highlighting some of those. I've got another question. So, with franchising, you're dealing kind of with the relationship of franchise or franchisee as you're trying to figure things out, decide if you like certain franchises. It can almost be like dating, so you're kind of that matchmaker. So tell us a little bit more about what you do, how you lead individuals through the process and kind of how you can you matchmake them together and how they work through that anticipation of do I like this franchise? Do I not? Do they like me? How does that all work?

Speaker 1:

Yes, it can be kind of like the Bachelor and there's a final rose. There's no rose ceremony though.

Speaker 2:

No, oh, there should be. You should add that.

Speaker 1:

So you know it can be. When someone is just first starting to think about this and start looking at it, it can be extremely overwhelming. Like I said, there's 3,800 possibilities and you go out on the internet and they all say they're the best one. So a methodical process. It actually doesn't start with any one industry or category. It really starts with the person, and I think, whether someone's getting help from a broker like myself or they're doing this on their own, the first step is to take a real self inventory, first of all, of your skills, your talents, what you're good at. When you envision yourself running a business, what do you envision yourself actually doing? Is it leading employees? Is it sales? Is it project management? So kind of giving some thought to skills that you have that you believe could transfer into running a business. Think about that.

Speaker 1:

It's important to do a financial inventory getting a real handle on what is your family's cost of living, where your assets, updating a personal balance sheet for the not only going to the bank and the financing reasons, but the franchise is looking at that too. A good franchise really wants to carefully qualify any candidate to make sure that they're poised to succeed in their business. The last thing any brand or anybody wants is to come into this undercapitalized. So good brands are really looking at that. And then, what is your time availability? Like we talked about, it's not passive. So is this something that? Can you see yourself stepping into full time day one? Can you afford that? Can you afford to do that If this is a side gig? Again, do you have the capital to hire a general manager? Do you have the capital to sustain the added overhead by doing this semi actively, as we might say? So these are the sort of these are the sort of questions that I'm asking of people up front and we're building kind of a model or a criteria list of what elements need to exist in any business for it to be a possibility. And then that serves as the compass for what kinds of businesses that I'm going to recommend to people.

Speaker 1:

Like, if someone's like I'm only going to do this part time, there are certain franchises that immediately come off the table because they cannot be started and operated part time. If someone most people are a geographic specific candidate, you know they, you know they don't want to drive two hours to this business. They want something that is reasonably close to where they live or where they want to be. So that is also a filter for what a person's options are going to be. If the closest open territory for your franchise of choice is 300 miles away, that's really not going to help you.

Speaker 1:

So these are the sort of things that someone like myself knows what to ask. I know what the different variables are that people have to look at and what they have to look at together, and it's got. All these pieces of a puzzle have to all fit together in order for an opportunity to be the right one. So that's how I am helping people to lay the groundwork, so we know what to look for and then when we go look for it, we know that it's going to check these boxes up front.

Speaker 2:

So one of the things as business owners we sometimes have to do is tell people no, no, you're not a fit. How do you? I'm sure it's come up in your career that you've had someone that's come in and said I want to buy a franchise and you're just like no. How do you tell someone no in that way?

Speaker 1:

So I've become skilled at helping people select themselves out. They self-select out and a lot of it is just telling people the realities of what kind of money it's going to take, what kind of time it's going to take, what challenges you should expect, and some people, if they're honest with themselves, will look in the mirror. You should expect, and some people, if they're honest with themselves, will look in the mirror. And again, it's about being professional and polite. But sometimes you just have to tell people like, look, I'm going to back out of this process because I don't think I can help you be successful.

Speaker 2:

Wow. So, as we wrap up, Leslie, I love that we give our listeners one thing like one usable skill, one usable nugget, something from your profession and what you're doing. So is there anything that you would like to tell the listeners? As the one last thing?

Speaker 1:

You know, about six months ago I changed my personal schedule a little bit. I go to bed an hour earlier and I get up an hour earlier, okay, so I go to bed at nine and I get up at five not all the time, but most of the time and that extra hour in the morning is like having three extra hours in the morning. So that sounds simple, but it's actually been kind of a big game changer for me as a business leader, as a person. Well, thank, you.

Speaker 2:

I appreciate you sharing that and thank you for sharing all your wisdom around franchising, how to work with franchisees, franchisors, and how to make that decision to become potentially a different business owner. Thanks a lot. Thank you so much for having me.