From A to Franchisee: The Podcast for Smarter Franchise Buying

Who Is FBR: Interview with Founder Eric Stites

• Franchise Business Review • Season 1 • Episode 1

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Host: Michelle Rowan, President and COO of Franchise Business Review

Guest: Eric Stites, Founder and CEO of Franchise Business Review

Episode Summary: The Journey of Starting Franchise Business Review

Introduction: Twenty years ago, a light bulb moment sparked the creation of Franchise Business Review. Eric Stites, then working with franchise marketing, noticed a gap in the industry: potential franchisees struggled to get honest feedback from existing owners. This realization led to a bold decision that would change the landscape of franchise research.

The Inception: Eric's journey began with a simple yet profound idea—survey franchisees to gather authentic insights about their experiences. This concept was born out of a need for transparency and trust in the franchise industry. With Dunkin Donuts as an early supporter, Eric took the leap, leaving his marketing job to establish Franchise Business Review.

Building the Foundation: Starting a new venture is never easy, and Eric's journey was no exception. With the support of his wife and a clear vision, he navigated the challenges of entrepreneurship. The initial years were marked by dedication and a commitment to providing unbiased, data-driven insights to potential franchisees.

Growth and Impact: Over the years, Franchise Business Review has grown into a trusted resource, working with over 1,300 brands and surveying countless franchisees. The company's mission remains steadfast: to help individuals make informed decisions about franchising by offering a comprehensive view of franchisee satisfaction.

Conclusion: Eric's journey is a testament to the power of innovation and perseverance. Franchise Business Review continues to empower potential franchisees with the knowledge they need to succeed. As the franchise industry evolves, the company's commitment to transparency and excellence remains unwavering.

Subscribe now to stay updated on the latest insights and trends in the franchise world.

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Michelle Rowan (00:05)
Hello, it's official. We are starting our podcast. Greetings and welcome to the first podcast. And today, of course, we have to kick it off with our founder and CEO of Franchise Business Review, Eric Stites. Hi, Eric.

Eric Stites (00:19)
Hi Michelle.

Michelle Rowan (00:21)
Eric is an active member of the International Franchise Association. He's currently serving on the VetFram and the Franchise Relations Committee. He is a frequent speaker on franchise performance, culture, and best practices. He also does speaking engagements for candidates. He was just in New York at the IFE talking to people looking to buy a franchise. So he's been doing this for over 20 years, 20 years here at FBR. But Eric, how long have you been...

Eric Stites (00:49)
I sound so old.

Michelle Rowan (00:51)
No, no, no. How long have you been in

franchising besides your time at FBR?

Eric Stites (00:56)
26 years. Scary.

Michelle Rowan (00:59)
So Eric,

yeah, it's not. Eric brings a data-driven perspective to improving franchise relationships. And when he's not here at FBR, you're gonna find him on his boat chasing tuna and humpback whales off the coast of Maine, where he lives. When it's not raining, which is never on the weekends right now. Okay, so Eric, let's start. I know this, but let's talk to everybody about how did Franchise Business Review get started? What were you doing before?

Eric Stites (01:13)
when it's not raining.

Great question. So I'm old, I'll go back 20 plus years and was working for a franchise marketing company and specifically working with a number of brands to help them reach current candidates that want to invest in their franchise.

⁓ And one of the brands we were working with is actually Dunkin Donuts and they were having trouble getting their franchisees ⁓ to return phone calls and you know, that's kind of how people do their research is they talk to existing franchise owners, find out what it's like to be a franchise owner if they're happy that sort of thing. And so a lot of people were calling existing franchisees and not getting those return phone calls. And so

You know, we kind of wondered about, you know, well, everybody wants to know the same questions, you know, is the training good, is the support good, are you making any money? All those important factors. So, you know, why don't we just survey the franchisees and, you know, share that data with them. ⁓ And so Duncan thought that was a great idea. ⁓ Realized it had to be third party in order to, you know, have people believe it. So I was like, ⁓ light bulb went off.

Um, and so long story short, um, quit my day job at, uh, my marketing company, um, hung out my shingle, so to speak, and started franchise business review. Um, you know, and the next, uh, the next, that was, that was the first good decision I made. And then the second was hiring you, uh, which you know, so. Yay.

Michelle Rowan (03:09)
Yes!

I'm glad you say that

this this long end to our game. But so what I love first is that you have been an entrepreneur So you have made the leap into doing your own thing like a lot of people looking to buy a franchise are considering which is extremely scary ⁓ I know I already know this story But also I want you to just share with others because I know that they're feeling this if they're talking about this with their families What was your wife's reaction to you're going to leave your salaried position and start franchise business review?

Eric Stites (03:34)
Hahaha

Yes.

Yeah. So, ⁓ you know, I skipped over the timeframe a little bit, but, so this was kind of percolating for about two years in my head. ⁓ and throughout that time, ⁓ was, was talking to my wife about, know, I think this is a really good idea. think, you know, maybe I want to start a company, blah, blah. ⁓ and she was like, yeah, yeah, yeah, yeah. You know, don't, you know, don't tell me the details. Just, you know, tell me when you're ready. And so,

Like I said, it was about an 18 month, two year process before I literally gave notice at my job and took her to lunch and basically said, I know you know this, but I'm leaving my job. I've rented an office and I'm starting this company, Frances Business Review. And she burst out crying in the middle of the restaurant.

Michelle Rowan (04:34)
I think that's a common reaction. Like change is hard. Change is hard. Yeah.

Eric Stites (04:35)
Understandably, understandably. ⁓

And yeah, it's scary, ⁓ you know, and it just it worked out so.

Michelle Rowan (04:44)
It is.

Yeah, it

did. No regrets. So when I found you, when I found your listing that you were looking for a salesperson, my dad had just become a franchise owner. So unfortunately he didn't have a resource like Franchise Business Review. So he chose, I would say, a not so stellar franchise brand, which we know they're out there. Franchising has a lot of opportunities and there's some really horrible brands out there, horror stories, but there are more great stories about how franchising has really been a vehicle for people to be in business for themselves.

So that's why we're here. We have 20 years of data, we've worked with over 1300 brands, and our goal is to help people decide if franchising is right for them and then help them decide what is the right franchise opportunity for them. So that is what we're here to do today. So we are kicking things off with you and how we got started. So I want to start with thinking about, let's talk about where we are in the world today. ⁓

What do you think? So you're just back from the IFE, which is a big expo in New York. So you had a chance to talk to a lot of people looking to buy a franchise and you also had an opportunity to see some of our clients and franchisors that are looking for people to join their brand to help them grow. So let's talk about where do you think the state of franchising is right now? Do you think it's still a great opportunity or how does, where we are in 2025, how does that impact someone's research or interest in getting into a franchise?

Eric Stites (06:13)
Yeah, it's a great question. ⁓ know, franchising has been around a long time. And as you said, there's great brands out there. There's mediocre brands out there. And there's some not so great opportunities. ⁓ You know, the thing about franchising, and it's such a cliche, but I'll say it anyway, ⁓ I've heard it a million times. Hopefully some of our listeners are hearing it for the first time. you know, franchising is the...

basically the opportunity to be in business for yourself but not by yourself. ⁓ And what a great...

opportunity that can be when you connect with a great brand. All the things that go along with starting your own business. ⁓ Not that they've all been figured out, but a lot of those details have been figured out and they've got systems in place and hopefully a proven business model. so, you know, that can be an amazing experience. you know, obviously it changes, you know, whatever's happening in the economy, good reception.

or good economy recession, whatever, ⁓ really depends specifically more on the industry. ⁓ You know, there's opportunities at any given time. ⁓

You know, I think that it's really about like what does the brand offer? How do they differentiate at the consumer level? ⁓ You know, whether they're serving actual customers, whether they're serving businesses, you know, what's unique about that service and what do they offer and how do they support their franchisees to kind of grow that business? And so it's really important to kind of look at all those factors. But, you know, as far as today, again, I've been doing this a long time. ⁓ I'm just as excited about

franchising as I was, you know, 26 years ago.

⁓ And it's just about finding the right brand. mean, the piece, and I'll say this over and over and over again, probably, ⁓ you have to find something that excites you ⁓ because ⁓ satisfaction with owners is critical. ⁓ All those pieces that I mentioned, the training and the support and all of those pieces are critical. But if you're not excited about the business, whatever the business is, then it's not going to be a successful venture for you.

Michelle Rowan (08:35)
agreed.

Eric Stites (08:35)
that's

starting, you know, starting with the heart.

Michelle Rowan (08:38)
Yeah, I mean, you gotta love what you do. Life is short. So I wanna talk about, you said, the experience of franchisees, what they're doing, that's important. We all agree that, that's what we're here. Franchise Business Review gets feedback from the existing franchise owners.

Why do you think, what makes FBR so special? So why do you think our data and us helping a person try and figure out if franchising is right for them or choosing a brand is different than working with a franchise broker or directly with a salesperson? What do you think we bring to the table in someone's research?

Eric Stites (09:12)
Yeah,

no, it's a great question. You know, there's lots of different.

franchise information websites out there. Some franchise directories, some more, know, SBA has information about franchising, ⁓ the International Franchise Association, but Franchise Business Review is really the only website out there that has all this research across thousands of different brands about franchise owner satisfaction, which I, again, you know, the most important piece is, you know, what do your franchisees think of

you how are they doing in business because there's a lot of brands that are successful at the corporate level for the franchisor and maybe not as successful and profitable for the franchisee. So that's an important piece to understand. ⁓ But you know really do your homework ⁓ and educate yourself about the industry. ⁓ When you're talking specifically about working with a franchise broker maybe as as part of this research process you know

There's good brokers out there and there's not so good brokers out there. It's similar to the real estate industry, but you have to understand they're motivated financially, obviously, to get you to the finish line and have you buy a brand. And it's primarily going to be a brand that only their franchise broker network works with.

So they may, know, again, good ones won't do this, but you know, less good brokers will maybe push you in the direction of a brand that may be paying them more money ⁓ or for some other reason that doesn't necessarily align with your interest. so, you know, at Franchise Business Review, we don't care what franchise you buy. ⁓ And as I said at the Franchise Expo last week, it's like if I can convince people not to get into franchising because

You know, they don't think they're fit for franchise ownership or business ownership. ⁓ I think that's part of our job too, is owning a business, as you know, is, is very hard. ⁓ and a lot of people aren't cut out, you know, for that. And so I think that education process and really being true to yourself and doing that self introspection as to, know, am I willing to put in, you know, the work that it's going to take, ⁓ to get this business to be successful as,

really an important factor to consider.

Michelle Rowan (11:40)
Absolutely,

so I think you make some good points there. So I wanna kind of, yeah, yeah, you win. So I wanna just kind of go back for a second though.

Eric Stites (11:44)
good.

Michelle Rowan (11:49)
You talked about brokers, which people might be coming to this for the first time and not understand that. So brokers work with a certain amount of brands and the brands pay them when a person goes through the sales process and decides to join. That is how a broker makes money. So if you decide that you are interested in a franchise that's in the automotive industry, they are only going to be able to show you the automotive franchisors that have signed on to work with their services. So that's an explanation of the broker fee. And now I want to be totally transparent in how

makes our money and how we work with these brands because I think it does also lend credibility to what we're trying to do. It's just we do a good job.

talking people out of buying a franchise that it's not right for our clients too, because they don't want somebody coming in not knowing what they're getting themselves into or what it will take to be successful because they are great brands. They're not just looking to make that franchise fee that you make when you sign on. The idea is to help you build a very successful business because they will receive a royalty from you the longer you are in business. that is how franchising works. You cannot survive and keep growing on the fee, that initial fee you

get when someone joins, you really have to help them be successful to make your brand successful long term. So that's kind of the interest of the franchisor. Franchise Business Review invites any franchise brand that has at least 10 franchise owners open and operating in the United States or Canada to participate in our research and we have a no cost option. That means that anyone that is on our awards list, whether they have paid us a dollar or zero dollars or ten thousand dollars, if they

score well enough with their existing owners, they will be on our awards list.

How we make our money is when franchisors want all the data that we collect from their systems or they want us to help put the data in front of people looking to buy a franchise. So that's, think, the simplest way to explain our awards are not pay to play. They're not based on how fast someone's growing or how much money they pay us. They truly earn that position on our website by taking good care of their franchisees that are currently with them making money. Agreed? Anything else you'd add to that, Eric?

Eric Stites (14:01)
Yeah,

no, I mean, think that's, you know, I think you just nailed it. ⁓ You know, it's all about, you know, there's

There are so many, like I said, directories out there that are just advertising directories. And the more you spend as a franchise company, the higher up on the list you get. We've had companies approach us to say, Eric, what's it gonna cost to be number one? And unfortunately we turned them down.

Michelle Rowan (14:14)
Yeah.

Yes. Yeah.

Yeah,

yeah.

It's a flaw in our model where we can't promote anyone on our site unless they've done the work by getting the award from their franchise owners. As much as we'd like to have other ways to make money here, we do have integrity and so we won't promote you on our site to our audience unless you have done that work and received higher scores from your owners. And I think it's also fair to tell anyone listening that the way that you look at a franchisee and a franchise or a relationship is it's not always strong.

not always positive. There's definitely tension between what their interests are. Change management is hard. And the idea is that, and I'm going to ask you to share some of the questions we ask on our survey, is that are they tuned into the franchisees' perception? Are they using the franchisees' experience and their perspective of how things are going to help them look at the way that they're growing the brand? So it's going to ebb and flow and it's really how they support each other or work through those disagreements and those down

sales cycles, those tense moments of change. So we're trying to get a bigger picture than just of, do you love your franchisor today? So with that, Eric, what are some of the questions that we're asking? Because you built this survey with the idea that most people want to know the same things before they invest. So how did you build out our questions?

Eric Stites (15:41)
Right, right.

Yeah, no, it's a great question. No pun intended, but, ⁓

Michelle Rowan (15:56)
Hahaha

Eric Stites (15:57)
You know, when you think about making an investment, ⁓ whether it's buying, you know, into a business or buying a washing machine, whatever it is, is, know, having that understanding of ownership experience ⁓ is critical. And so, you know, in the franchise investment, particularly, you're looking at things like training and support and, you know, are there marketing programs as good as they say they are? And is the technology

as good as they say they are. more importantly, like with leadership, do you trust your leaders? And again, you know.

There's days when a franchise owner wakes up and their CEO of the company may not be their best friend, but hopefully those days are fewer than the other days when they wake up and they think that the franchisor is great. And so I think it's important in understanding whenever you're looking at any franchise company and talking to franchisees, which you should talk to as many franchisees as you can throughout this process, is you're going to talk to unhappy

Michelle Rowan (17:02)
Absolutely.

Eric Stites (17:06)
And ⁓ understanding, know, dig into what they're unhappy about and understand, you know, really what the root cause is. And, know, in some cases that may be, you know, just a one-off thing. ⁓ If you talk to 10 franchisees and they all say the marketing programs are terrible, you know, that's usually a red flag that the marketing programs are terrible. so understanding that ⁓ and, and obviously you're going to talk to the

Michelle Rowan (17:31)
you

Eric Stites (17:36)
franchise

or two. ⁓ And don't just talk to ⁓ you touched on it as far as you know, most of the time when you're researching a franchise company, you're talking to the franchise salesperson or the franchise development person. ⁓ You want to talk to the operations people, the marketing people and all the people kind of behind the scenes that are supporting the franchisees because they're the ones you know, once you sign on the dotted line, they're the ones that are going to be supporting you day to day. So those are the people that you

Michelle Rowan (17:50)
Yes. Yep.

Eric Stites (18:06)
really want to talk to you and kind of understand, you know, what are kind of the nuance nuances of, whatever department they happen to be in. know, the hardest thing about this is, again, doing that introspection is, you know, the franchise or is going to tell you about their marketing programs. And, you know, they're probably great. ⁓ But you're the one that has to go out and execute on those programs and understanding, you know, and follow their systems and

You know be you know true to yourself when you're doing that research to say yes ⁓ I'm willing to do that and talk to the franchisees within whatever system you're looking at You know the most successful ones and find out what they're doing differently to be successful because you know It's very different than whatever the product or service is that the franchise offer you know it's not you know you're not as the owner flipping burgers or ⁓ You know running the printing machine or whatever it is

Generally, you're out promoting the business and the local community and maybe managing employees and doing a lot of that legwork. really understand what the skill set of their franchise franchisees are and especially the most successful ones. And make sure that you fit that because there's a lot of brands out there that are great opportunities ⁓ that you may not be a great fit for. I would be a terrible franchisee. I've told that to people. People always ask me, what

Michelle Rowan (19:35)
Yeah, yeah.

Eric Stites (19:36)
would you buy?

I'm like, I'd be a terrible franchisee. I'd want to reinvent the wheel and not follow their system and ask a lot of questions. And yeah, they would kick me out.

Michelle Rowan (19:47)
Yeah, I think that's, you're very self-aware, Eric.

I agree with that assessment. I also agree

Eric Stites (19:53)
Tell my wife that.

Michelle Rowan (19:55)
that I would not be a great franchisee, but I I love franchisees. I think that ⁓ the ones that we've seen get to be really successful are doing exactly what you said. They are involved in their communities. They are building strong teams. They are leading people. ⁓ And I think this is really exciting to help people discover franchising and all the types of formats that there are within franchising, which we'll start getting into. think food is the instant one people go to in their heads.

when they think of franchising, but we really have the opportunity to work across different segments and get that picture of what are these people doing in their communities to help change people's lives every day. So I think it's really exciting that we get to be part of that. You mentioned the importance of doing research. You mentioned the importance of talking to the other franchisees that are in the system. Is there any other advice that you would give to people as they consider looking at franchising as

potential change in what they're doing and how they make their living.

Eric Stites (20:55)
Yeah,

well, I mean, again, I

I've talked a lot about that self-interspection and understanding if you're the right fit for business ownership. mean, the reality is that whatever business you buy, franchise or otherwise, it's probably going to be the hardest job you've ever had. And so, you have to be committed to whatever it is making that business work. And it's not like you can get six months in and change your mind and just go out and get a job. It's a lot harder to of unwind.

of business. so, you know, really looking at that and understanding who are those people that are in the system. But, you know, the thing about franchising that I think is really the biggest asset that any franchise company has is the franchise network itself. ⁓ So if you think about, you know, our business franchise business review, you know, it's great business, we've been very successful, but we're, you know, we're a needle in a haystack. There's not a lot of other

Michelle Rowan (21:46)
Absolutely.

Eric Stites (21:58)
other

research companies in the franchise world that we get to pick the brains of. If you're in a franchise brand, you can pick up the phone and call any franchisee in that network at any time besides, you've got support from the corporate office, but you can also call the franchise owners and ask them about challenges that they're having or challenges you're having and how they address that. Or when you go to convention, understand who the top performers are, as I said, and what

doing differently. And as a candidate, you want to try and get as much exposure to that as possible ⁓ before you again sign on the franchise agreement and really understand that culture of the franchise network because every company has a unique culture ⁓ and they're not all, Kona Ice who's a brand that's been on our list, at the top of our list for many years.

⁓ They have a culture that's amazing. You go to their convention and it's just like a family reunion and they've got over thousand ⁓ locations across the country with hundreds of franchisees and it's just a big party. ⁓ And then I'll go to other conventions for other brands and it's much more business focused and at five o'clock everything shuts down and people head back to their room. So understanding the culture of that franchise network and the whole company is important.

⁓ And as I said earlier, like really talking to the people behind the scenes that are going to be supporting you as the franchisee, whether it's marketing, technology, operations, ⁓ your field coach, if you can talk to a few field coaches, that's obviously a great opportunity as well.

Michelle Rowan (23:44)
That's

awesome. So we are really excited. We are going to use all of this collective franchise history that we have, the work we've done with over 1,300 franchise brands, the number of franchisees that we survey each year, and we're going to try and help educate people.

by sharing stories, by talking to all of the friends we've made along the way, and to talk to the brands that are doing it right, so we can try and help navigate if this is right for you guys. So thank you, Eric, for being the very first guest and telling us why you created FBR. And I want to thank you for creating FBR because it's been a real pleasure working with all of our clients and all the franchisees that we get to serve. So we're excited. And join us for more. Yeah.

Eric Stites (24:16)
⁓ glad.

Yeah, this is exciting. I'm excited.

Michelle Rowan (24:33)
Thank you, Eric.

Eric Stites (24:35)
Thanks.