Hartford Business Journal

www.HartfordBusiness.com March 6, 2017 • Hartford Business Journal 21 BIZ BOOKS Tips to determine how to join the right franchise "T ake the Fear Out of Franchis- ing" by John P. Hayes (BizCom Press, $12.95). It's well-documented that more small businesses fail than succeed. But when it comes to franchises, the successes out- number the failures. In simple terms, a fran- chise owner doesn't start at ground zero; in return for a fee, the franchisor provides A-Z training in how to build and operate a business, and some provide assis- tance with financing. Hayes explains what you need to know about making sure you're a good fit for a particular type of franchise, and how to decide which franchise to buy. Here's some of what you'll learn: "A franchise is a license." If you think you're in control, you're not. The franchisor con- trols the what, when and how of the franchisee operations. Fran- chisors may even have a list of preferred suppliers. Step off the prescribed path and your license can be revoked — which can have disastrous financial results. "Know thyself." Skill trumps passion. Don't think a franchisor will evaluate whether you have the requisite skills and mindset to own a business. Even if you have those skills, you may not have the industry- pertinent skills to succeed. While you will commit to learn those skills, accept the fact that the learning curve could make it difficult to succeed. Why? While you're learning what ownership and leadership means, you're also expected to manage day-to-day opera - tions, make decisions, hire the right people and deal with questions from employees and customers. Hayes provides a free tool at https://www.sur- veymonkey.com/r/howto- buyafranchise to help you assess which franchise opportunities are your best fits. Even when there's a good fit there's due diligence you need to perform before buy- ing in. Federal law requires franchisors to provide prospective franchisees an annu- ally updated disclosure agreement, which has 23 items of key information. "A legiti- mate franchisor will not ask you to sign any documents or pay any money until you've had the disclosure agreement for 14 days." Before you request a copy, engage an attor- ney and accountant familiar with franchis- ing to explain its terms and terminology. Here are things to focus on: Item 19 (an optional item) indicates earn- ings claims. Given that earnings vary by loca- tion, time in business, and efficiency of opera- tions, etc. many franchisors do not make such claims. That said, you should ask the franchi- sor for franchisee earnings information for top-, middle-, bottom- and new- (i.e. less than 2 years in business) performers coupled with demographic information about their territo- ries and competition. Not having such infor- mation should raise a red flag. Item 20 helps you determine the success- versus-failure rates of the franchise brand. It covers 1. The number of outlets (franchise and company-owned); 2. transfers to new owners; 3. The number of locations opened, closed, terminated, non-renewed and reac- quired; 4. Status of any company-owned outlets; and 5. projected new openings. Play close attention to 2 and 3; a high number of transfers, terminations, non-renewals or re- acquisitions should raise red flags. Item 21 provides a summary of the franchisor's financial situation and should lead to a thorough review of the financial statements. A franchisor's income comes from two sources — initial franchisee fees and licensing fees tied to a percentage of a franchisee's revenue. Established franchi- sors derive a higher percentage of income from licensing fees than new, rapidly- expanding franchisors. The International Franchise Associa- tion (IFA) can help, too; check out www. f r a nch i se.org /wh at- shou ld-i- a sk-t he - franchisor. To complete your due dili- gence, contact franchisees — especially the top performers and the new ones. The IFA provides several questions to ask; check out http://www.franchise.org/ what-should-i-ask-the-franchisees. Key takeaway: Hayes recommends buy- ing a franchise "only from a franchisor who has documented the skills and values possessed by top-producing franchisees." He also believes you should measure your results against those of top performers to gauge whether you're climbing into their ranks. If your trend isn't upward, consider selling to minimize the financial damage. n Jim Pawlak is a nationally syndicated book reviewer. Jim Pawlak COMMUNITY CONNECTIONS Why great leadership means relinquishing control By Taryn Stejskal I t's a time when many of us feel very much out of control. Life is going at a clip that feels unsustainable and unstoppable: 24/7 technology, a new president. My daily life equation never seems to add up. The number of hours in the day plus number of tasks to be accomplished equals a deficit of time. How do we keep up? How do we stuff it all into a nice neat box with a tightly fitting lid? How do we control all of it? When we experi- ence a lack of control, the human tendency is to seek more control. This is a vicious cycle. In their book, "Lead More, Control Less: 8 Advanced Leadership Skills that Overturn Con- vention," Marvin Weisbord and San- dra Janoff offer a holistic and thoughtful approach to leader- ship that may, at first pass, defy expectation. Their recommendation: Invite leaders to "[wear] authority more lightly." Many people automatically correlate leadership with control. Weisbord and Janoff encourage us to reconsider this notion. For many leaders, relinquishing control can feel particularly fraught. Back-to-back meetings along with hundreds of emails, fire drills, deliverables, and PowerPoint decks all require that we exert control. Or, so we think. Lead More, Control Less encourages leaders to place less control on people and exert more control over environmental conditions, the processes and structure in which the work gets done (for example, setting goals, addressing shifting priorities, connecting to the right people, etc.) In this way, teams are empowered through increased engagement, collaboration and collective wisdom. Fear is the driver of control The fallacy is: We think if we can exercise control, we will be safe. Paradoxically, the ability to let go, to surrender the outcome, sets us free (less control = greater freedom). I remember the first time I led a team. I was afraid that if I didn't manage every detail, I would fail. I was also convinced that being a good leader meant controlling the behav- ior of the people that worked for me. I was hyper-focused on meeting all deadlines, with- out exception. Overtime, this wore my team down. What I know now is that being a good leader is about involving the team in the pro- cess and facilitating the structure that allows great people to do excellent work. Had I known about Weisbord and Janoff's work as a young manager, I could have avoided some heartache. The authors invite leaders to focus on controlling structures, not people. Typically, leaders, some like me earlier in my career, have been taught the opposite — that is, to lord over the people, process, and outcomes. In Weisbord's words, "We want to control the heck out of the conditions under which people interact with one another." By establishing a predictable structure and guardrails around which teams interact, there is a greater sense of psychological safe- ty, and in the words of Peter Block, people are given responsibility for their own freedom, to be the authors of their own accountability. Weisbord and Janoff tell us that by relinquish- ing control, rather than holding on more tightly, teams can be enabled through delegation and greater collaboration, leading to greater invest- ment, productivity and innovation. As one of my team members pointed out earlier in my career, controlling the structure in which work gets done, rather than the team members themselves, is the difference between a carrot and a stick. In short, strive to control people, pro- cesses, and outcomes less, and your team will thrive more. Begin by asking: How will you surrender a kernel of control in your own life? How will you let go of control in order to lead more effectively? n Taryn Stejskal serves on the board of direc- tors for Leadership Greater Hartford. She is the director of leadership development and assessment at Cigna. Taryn Stejskal ▶ ▶ A franchise is a license. If you think you're in control, you're not. The franchisor controls the what, when and how of the franchisee operations. ▶ ▶ For many leaders, relinquishing control can feel particularly fraught. Back-to-back meetings along with hundreds of emails, fire drills, deliverables, and PowerPoint decks all require that we exert control. Or, so we think.

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