From A to Franchisee: The Podcast for Smarter Franchise Buying

Understanding Franchise Models

• Franchise Business Review • Season 1 • Episode 4

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Host: Michelle Rowan, President & COO Franchise Business Review

Guest: Marissa Frois, CEO The Entrepreneur's Source

Episode Summary:

In this episode, we dive into the world of franchise business models with Marissa Frois, a seasoned expert from the Entrepreneur Source Organization. Discover the intricacies of franchising, from the partnership dynamics between franchisors and franchisees to the diverse opportunities beyond fast food chains. Learn how franchises empower individuals to achieve self-sufficiency and explore the unique and fun franchise concepts that are reshaping industries. Whether you're considering a franchise or simply curious about the model, this episode offers valuable insights and advice for anyone exploring the franchise landscape.

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Michelle Rowan (00:01)
Hello, welcome to this week's episode where we are talking about exploring different franchise business models. Today, I've invited Marissa Freuss to join us for the discussion. She has over 15 years of service to the Entrepreneur Source Organization. She's been involved in nearly every facet of the organization, including branding, marketing, strategic planning, and operational process improvement.

Marissa is committed to empowering the coaches within the entrepreneur source to grow thriving, sustainable practices. She leads with a focus on equipping their coaches with the right tools, resources, and opportunities to drive individual and system-wide success. Under her leadership, the entrepreneur's source remains aligned to its mission of helping people explore self-sufficiency and take control of their career paths through the power of coaching.

So I felt like she was the right person to help us talk about how people can understand the franchise business model that aren't in it every day like we are. The other interesting part of the entrepreneur source is that they're actually a franchise as well. So the service that they provide ⁓ is as a franchisor and as working with people to help them explore business opportunities and franchising. So Marissa.

Let's start with, a little bit because you have been with the Entrepreneur's Store so long. Tell us a little bit about your journey through the organization and what you're doing today.

Marissa Frois (01:27)
Sure.

Yes. ⁓ So excited to be here first and foremost. So looking forward to the conversation today, but I've had quite the wild journey while I've been here at the Entrepreneur Source. So I've been fortunate enough to quite literally grow up within the organization. So I happened to get to know our founder even far before my time starting at TES. I worked through high school and college at a couple of places here in town where our main office is and got to hear about the world of franchising and TES and what our

Coaches were doing through Terry, who's our visionary founder. And then when I graduated school, he offered me the opportunity to intern at TES, which I was so thrilled with. I thought this is going to be great. I'm going to get some real world experience. And that was 16 years ago. And I've never looked back since. So I just fell in love with the franchise industry and our client success stories and how we're really helping individuals achieve the dreams they've always dreamed of for themselves and their families.

Michelle Rowan (02:25)
Yeah, me too. And I think what's so interesting is so many people don't know about franchising or just think about the McDonald's and the Dunkin Donuts. So there's so much work to be done from all of us that are in franchising to just keep telling those stories of how people are building their wealth or ⁓ creating their opportunities within franchising. So I love that. ⁓ So let's first...

Marissa Frois (02:33)
one way.

Yeah.

Michelle Rowan (02:48)
Talk about, so when your coaches are talking with someone that is looking to change their careers or looking at business opportunities in general, how do you talk to them about understanding the franchise or franchisee relationship? How do you set that up as far as what they could do as far as having a career or a business in franchising?

Marissa Frois (03:07)
Yes, yep. So there's one word that comes to mind immediately and that is partnership. So truly there's no successful franchisor without successful franchisees. And so we are a franchisor ourselves. So as a franchisor, we really want to ensure that we're creating that win-win relationship for everyone that's involved in our community. At the end of the day, we all really believe in one mission and we hold the same values. So working together to be the best that we can be for each other.

and for our clients is the ultimate goal. There's a famous line in franchising and that's you're going into business for yourself but not by yourself. And I think that beautifully captures what that partnership is all about.

Michelle Rowan (03:50)
Yeah, I think that's great. what I'll say is when, so I've been in franchising about 20 years, so a little bit longer than you, but what's been a really great shift that I've seen is 20 years ago, if you said a franchise or franchisee relationship was a partnership, people would lose their minds. There was so much more of this kind of command and control mentality where, no, the franchisees are not partners. We are the bosses. We, you know, we control this, this system.

And I think that we've seen it change very much for the better, but I think we've seen it change just based on really the internet and the way that people can talk about that relationship and franchisors understanding that your customer is the franchisee. So you can't treat them like I've heard parent and child. I've heard lawyers will say, never say partners, but I think it absolutely is a partnership.

Marissa Frois (04:44)
apps.

Yeah,

absolutely.

Michelle Rowan (04:50)
Yeah.

so part of that, what we always talk about is it needs, everybody wants the same thing. Franchisors that are doing things right. They want their franchisees to make money. They want them to be successful. And I think that all starts with really how you set expectations from the, from the jump. So when you are talking to a potential franchisee, someone that's interested, how do you talk to them about what they should expect from the franchisor?

Marissa Frois (05:06)
Yes.

Sure. It's a great question. And you're right, it is extremely important. And so like I said, TES is a franchisor ourselves. So we're setting those expectations from the very beginning before an individual even decides to invest in a TES franchise so they really understand what that partnership looks like, but what to expect from the franchisor. So things like the operational guidance and the operation manuals really help you run a successful business.

in-depth training that the franchisor will provide both initially as you're ramping up the business, but ongoing. We really want to make sure that we're continuing that education so that you can be the best you can be in your business. Marketing support, technology solutions, you could run your franchise more effectively. And also we're staying on top of the newest innovations and trends so that we're keeping the brand and its franchisees cutting edge.

And then another big one that comes to mind is providing you a community. So you're going to have many others who are in the business going through the day-to-day life of being a franchisee just like you. And on the franchisor level, we really want to make sure that you have outlets to interact with those franchisees. So we'll collaborate with each other and we'll provide that facilitation of collaboration so that you can learn from each other.

and ultimately help each other grow at the end of the day. So again, going back to that saying, you're going into business for yourself, but certainly not by yourself.

Michelle Rowan (06:41)
I love that. so how do you explain to them what their role as the franchisee would be? So we've talked about from the franchise or kind of what that what their responsibilities are. So how do you coach a franchisee on how to be the most successful or have the best shot at being really one of the top performers in the system?

Marissa Frois (06:51)
Yeah.

Yeah, it's a great question. as a franchisee, honestly, probably like anything in life, I think it's just to be an active participant and to continuously keep an open mind. And so what does this look like from a franchisee's perspective? So I think first, the biggest is being willing and excited to follow a proven system. And this is something that we talk about from the very beginning. So if you're someone that likes to kind of figure it out on your own and maybe meddle with the recipe,

Franchising may not be the best fit for you, and that's totally OK. We'd rather figure that out before you even get started. So that's number one. Number two is just to be a continuous learner and, again, participate. So your franchisor is going to offer you many opportunities to help you level up within the business. So it might be virtual and in-person trainings or conferences, team building events.

Even the opportunity to sit in on boards if you wanted to to better the entire system, but you have to show up and you have to participate.

Michelle Rowan (07:57)
Yes. Yeah.

So wait, Marissa, I have a couple of questions on that one. For the first one with follow the system. I've heard some people will say if you can follow the system, but you want to be a little bit more influential in how the franchise or grows to join a smaller system versus a larger system, would you, do you subscribe to that idea or do you really think if you're coming into a franchise model, you need to be expected to follow their playbook and really play by their rules?

Marissa Frois (08:00)
Yeah. Yeah.

So I think regardless, following the system is going to be critically important. But also another part of being a franchisee is being willing to speak up and having a voice. Because I also think that you can still be creative and share things that are working or share things that you're seeing. Because honestly, a lot of the innovations that franchisors are seeing are coming from their franchisee community. So I think regardless if you're joining a smaller franchisor or a larger

franchise or, know, being willing to have that voice and speak up. Yes, you're going to follow the system, but that does come with creativity too at the end of the day.

Michelle Rowan (09:02)
Yeah, and I think when you're talking to people at the brand, you'll have a sense of how much flexibility or what you have room to be flexible on and try new things versus there will be some non-negotiables because they need to protect the brand and the continuity that a customer has in every region. ⁓ And then I loved your comment about continue to learn and participate. ⁓ I think that's a missed opportunity for a lot of franchisees that

Marissa Frois (09:15)
for sure.

Absolutely.

Yeah.

Michelle Rowan (09:28)
they don't go to a convention or they don't connect with those other franchisees. You talked about boards and let's assume our audience doesn't know what that means. Can you talk about some of the committees or the ways that franchisees could get involved to have more of a voice within the brands?

Marissa Frois (09:37)
Sure.

Absolutely, yes. And I'll speak to it from a TES perspective, but I think you'll find this in most other brands. So first and foremost, we have what we call our FAC, or our Franchise Advisory Council, that we're meeting with often, a smaller subset of franchisees, but they're crucial to our business. So we're meeting with them to share new ideas that we maybe want to launch in the system. Maybe it's a system enhancement or something that we need to tweak.

Michelle Rowan (09:47)
Yeah.

Marissa Frois (10:10)
How can we better communicate on certain topics with our franchisee community? And also, we want them to bring topics to the table. So if they're hearing stuff from fellow franchisees or something that they're seeing, whether in the TES business or not, we want them to have that open and honest communication during those meetings. So that's one way. But additionally, if we're going to be launching a bigger marketing or technology initiative, we'll put some smaller groups together.

to help people to have those franchisees help test it out, share their ideas, work with us through whatever it is that we're launching so that we can then go and launch system wide and hopefully work out a lot of those kinks. So we have multiple ways that franchisees can sit on those different boards.

Michelle Rowan (10:54)
Yeah, I love that. And I think, you know, it's important to talk about the franchisee franchise or relationship isn't always hunky dory. Everything's great. Sometimes there is a strain, especially when there's change, people just fight change. And I think when you talk about speaking up and having a voice and I will coach franchisees that will sometimes reach out to us and are pretty heated about something is it's the same.

Marissa Frois (11:05)
Yeah.

Yeah.

Yeah.

Michelle Rowan (11:18)
the same kind of idea of your relationships that are important to you outside of franchising your marriages with your children in that ⁓ being constructive in the way you speak up and offering solutions and not just the complaints will definitely get you further. So I think that there's also to the way you show up getting involved in these committees and these advisory councils are great, but also it's okay to disagree with your franchisor, but you should always be respectful. And if you want to see

Marissa Frois (11:25)
Yeah.

Yeah.

Michelle Rowan (11:46)
progress made, the way you bring up the information or work through it together also, I think, can get you better results.

Marissa Frois (11:54)
Yes, absolutely. And we will often tell our franchisees, just be willing to keep an open mind, right? Like you may not always understand the why behind something or maybe see the same thing as your franchisor does, but at the end of the day, we really do have their best interest in mind. And we're not always going to be perfect either, but just be respectful. As you said, keep an open mind and go along with us on the journey because we promise we're doing things to make our system the very best for everyone.

Michelle Rowan (12:21)
Absolutely. Okay, so I kind of stopped you. Do you have anything else that you would add as far as coaching people on what their role as a franchisee or to be the most successful franchisee, how you kind of set them up for success?

Marissa Frois (12:30)
Yeah.

Yeah. So you know what? That that last bullet was it. So keeping that in mind. Yeah. So I think we covered all the major components there.

Michelle Rowan (12:36)
Okay. Awesome. Awesome. Good.

So there's different types of franchises out there. How do you talk with your, ⁓ the people that your coaches are coaching? How do you talk to them about the different types of franchise models that are out there for them?

Marissa Frois (12:53)
Yeah, so I'm going to break this down a few different ways. So first, I'll talk about a business format franchise versus a product distribution franchise. And then I'll talk about some of the industries within franchising and even talk about how you can invest in those opportunities. But the business format franchise, I think this is the most popular type of franchising and probably what comes to mind when most think of a franchise. So with a business format, you're making an investment to own

and run your own location, but with the support of an established brand, that proven system we spoke about, and that ongoing training and support. The product distribution franchise is in that franchise. The franchisee is really granted the right to distribute a manufacturer's products, but under the brand's name. So in that case, the franchisee is selling a recognizable brand name's products while maintaining some control over their individual business branding and operations.

So I'm going to focus specifically on the business format franchise because that's what's most commonly known, I think, in the franchise space when someone thinks of franchising. And Michelle, you spoke about it earlier. I think people most commonly think of quick service restaurants when they think of franchising, which is certainly one. But there are so many others within the space, from retail to health and wellness to home services.

Michelle Rowan (14:05)
Yes.

Marissa Frois (14:17)
education and child services, professional services, and that's just to name a few. There's so much more in the world of franchising. And then even within those, not all are brick and mortar or storefront. So you can have home-based businesses, mobile franchises, there's kiosk space. So there's a lot of possibilities within the franchise space.

Michelle Rowan (14:39)
Yeah, and I love too that that covers also too low and high end of investment of both time and dollars too. So do you want a brick and mortar place, which then you have to find real estate, you have to sign leases or buy real estate and other options are you start from your house and you start growing that business before you launch into a space. Cool.

Marissa Frois (14:43)
Absolutely.

Definitely.

Absolutely.

Right. Definitely. Yes,

absolutely. Yep. And then last, so when you're making that investment, you can invest in a single unit, which means that you're operating just one location. You can grow or you can do it right out of the gate and look into multi-unit, which means you're operating more than one location or even look into a master franchise, which really allows you to have the rights to a larger territory. So also a lot of possibilities there too.

Michelle Rowan (15:26)
Awesome. So with multi-unit, let's just talk a little bit more about multi-unit and master. So multi-unit, you're signing an agreement. Usually it has a schedule saying you're going to open these units or territories based on this schedule. And there's usually financial penalties or they can pull territory away from you if you don't stick to that schedule. Okay. And then the master franchising is...

Marissa Frois (15:35)
It's not.

That's correct. That's correct.

Michelle Rowan (15:51)
I might, let's say, because I live in the Boston market, I might purchase the Boston territory. I could open a location here so that I'm an operator of that business. But the other part of my job is I need to find other franchisees to buy other locations within my market so that I have kind of an agreement that I'll saturate this market, which helps the brand and helps brand awareness. But again, you're sticking to that schedule. So it's a bigger commitment and you're also an operator and you're selling the franchise.

Marissa Frois (15:55)
Yeah. Yeah.

Yep.

Thanks, Al.

That's exactly right.

Michelle Rowan (16:21)
Okay, excellent. Cool.

So how about let's talk about the difference between franchises and licenses.

Marissa Frois (16:28)
Sure. Yep. And I don't think there's one that's better than the other, right? It's what's best for the individual, but I'll talk about the advantages for the franchise model specifically. So first is that proven replicatable system that everyone will get with the franchise system, more training and ongoing support.

I think one of the biggest is the brand awareness and the uniformity that happens in a franchise system. So from a client perspective, you know exactly what you're going to get, whether you go into one franchise here in Connecticut or another in California, because you're all following that system and the brand standards for that franchise organization. The last is it's also regulated by the federal trade commission. So you will have a franchise disclosure document with a franchise, which lays out everything that you can expect from that franchise. So

Michelle Rowan (17:09)
Yes.

Marissa Frois (17:17)
That's something that you can look for within the franchise model as well.

Michelle Rowan (17:22)
What about investment? Do you see in different investment levels from franchising versus licensing?

Marissa Frois (17:27)
Yep, so business ops or licenses tend to be a little lower investment. Franchising can be a little higher. There are ongoing fees, but you get all of that training, support, marketing, and technology that goes along with it. So those ongoing fees are going towards helping to build that up for our franchisee community.

Michelle Rowan (17:47)
And do you see in licenses and business opportunities, do they do a good job as far as connecting the people that are within the model? Do they have that community like you see in a franchise community?

Marissa Frois (17:59)
they do. Sorry, we don't work with too many business. So I don't know that I speak to it. Okay. We only work with franchise opportunities. So I don't want to say anything and have it not be accurate. ⁓ And I think they do. ⁓ It just looks a little different because they're each kind of building and operating their own

Michelle Rowan (18:02)
Okay, I just, don't know anything about them. Yeah.

Okay, perfect. Yeah, I don't know anything about how those models run. Yeah.

Marissa Frois (18:22)
They have a lot more flexibility, so they're bringing people together, but it's not in the same way a franchise is, where it's one proven mission or goal, one education session. So I just don't know how the inner workings are. ⁓

Michelle Rowan (18:31)
Yeah, excellent. No, that's fair.

How about, what do you feel like is the most unique thing about franchising? What gets you the most excited about it? You've been there 16 years now.

Marissa Frois (18:42)
Yep, so I think it's just the community and the rising tide raises all ships approach, right? So for us specifically, I've never seen a community that so genuinely wants to see each other succeed. So from us at the franchisor level and really making sure every day we're doing what's best for our coaches to ultimately help their clients, but even our franchisee community, they're willing to give their time.

their resources, share what's working for them to make someone else be better in their business. And I just think there's nothing better than that, you know, to be able to do that for each other and for our clients. It's very rare in my opinion.

Michelle Rowan (19:22)
Yeah. Well, and I also love that you talk about what your coaches are doing are, it's really helping educate people on franchising as an opportunity, but that you also help people decide that franchising is not right for them, which is what we talk about here at FBR too, is franchising is great for so many people. It's not a great fit for everybody. So yeah. And so making that education available to them to understand, would you be better off as an employee somewhere else or?

Marissa Frois (19:43)
Absolutely.

Absolutely.

Michelle Rowan (19:50)
starting your own thing, I think is great.

Marissa Frois (19:52)
Yes. Yeah. No, our goal is to leave people better off than when they started with us. And so doing right by them, because you're right. Franchising is not right for everyone. And that's okay. But we really want to make sure that they have all the education awareness and then bring them through a discovery to really help them at least explore what they didn't even know was possible. Right. Because then they can make an informed decision and say, you know what? This is awesome. I'm excited about self-sufficiency. I can do this. Or maybe

You know what, I'm going to transition back into the job market and that's okay too, but how can we just help them leave better off than when they started with us?

Michelle Rowan (20:26)
Yeah, I love that. So as we just talk about the franchise business model, I'm just going to kind of sum up what we talked about in that the franchise or is really responsible for the big picture. They are they are building this brand, this continuity, no matter what market, what location you walk into. That is their role is to grow the brand. The franchisee is really running the business in their local market. So they are responsible for delivering a customer experience that protects the brand.

So again, as you're thinking about when you're giving feedback to your franchisor, they are looking at what works in every single market, no matter where. So you might know your market really well, but it might not be something that works for everybody everywhere. So it's just something to keep in mind as you explore franchising is that your job is in your market and they're going to cover all the other stuff, how you grow, how you stay competitive. ⁓ I don't know if you have any, but can you share some of the most fun or unique

types of franchises that you have worked with or come across? think, again, just trying to open up the idea that it's not McDonald's or Dunkin' Donuts. What are some of the unique or fun brands that are out there?

Marissa Frois (21:35)
⁓ You know what? I'm just always amazed by what is a franchise opportunity from mobile pet grooming to charcuterie boards. Who doesn't love a great charcuterie board, right? But there are franchise models that will give you everything you need to run a really successful business down to, ⁓ I mean, we've had franchise concepts that go into schools and help if there's a lice outbreak, right? I mean, that's a very serious thing, especially as

Michelle Rowan (21:40)
Yes.

Yeah.

Yes. Yes.

Marissa Frois (22:03)
know, mom, fortunately we haven't had to go through that, but there is a franchise that will help keep your children safe in that regard. So there's just so many different possibilities out there and brands out there that you don't realize is a franchise concept, but it is, and they're doing great things for their local community.

Michelle Rowan (22:20)
That's right. So the nice thing is, I remember my daughter just when she would come home being like, can you please stop hugging other children? Can you please? It just kept going around the school. And so yes. And what's great is that there's even more than just one company in that space that's doing it. But yeah, love all of the, especially in child services, all the services that are coming and using after school programs or schools as the place that they do the service or the fun activity that they're doing.

Marissa Frois (22:28)
⁓

They're full. I know.

Michelle Rowan (22:49)
I think there's a lot of programming that parents are involved in or their kids are involved in that they don't even know is a franchise. So it is, it's amazing. We're everywhere. We're everywhere. Excellent. So I'm just going to ask any advice that you would give to someone that's looking to explore franchising, what would you tell them?

Marissa Frois (22:54)
Yes. Yep. You're so right. You're so right.

Yeah, well, you have a wonderful resource right here in Franchise Business Review. And I mean that genuinely because we participate with FBR. So they have a ton of resources, just educational resources to help you in your journey through franchise ownership. But they also survey probably hundreds of thousands of franchisees at this point. So you can hear directly from the individuals that are involved in the business. They have beautiful profiles that you can check out where you can see.

Some of that feedback, learn more about the brand. There's videos there. ⁓ So I have to throw that out there as a wonderful resource. Of course, we're talking about coaches. You could certainly work with a coach. There's never a fee, just your time. And it really is a journey of discovery and education. But the last thing I will say, whether you work with a coach or not, is just be willing to keep an open mind.

⁓ You never know what you're going to discover, right? This is a huge step for you and your family. So just be willing to look at everything. Even if it's something you've never heard of or you maybe don't think you have an interest in, if it can help you achieve what we call it TES, your ILWI goals, so your income, lifestyle, wealth, and equity goals, then why not look at it, right? Now is the time. It's critically important. So just keep an open mind as you go through that experience.

Michelle Rowan (24:25)
I think

that's great advice. And Marissa, how many coaches do you have across? it's North America or just United States? Okay.

Marissa Frois (24:32)
North America, so

we have about 250 coaches at this point.

Michelle Rowan (24:35)
Amazing.

Amazing. I love it. Thank you so much for joining us today and thank you for the FBR plug. We really are just trying to help educate franchisors on how to do things great and candidates on how to pick the right brand. So we appreciate you joining us today. Thanks so much.

Marissa Frois (24:38)
Yeah.

I mean it. Absolutely. Sure. Yeah, thank you for having me.