In this transcript, Clay Clark (US SBA Entrepreneur of the Year) discusses with Terry Powell ("the father of franchising" and founder of Entrepreneur's Source) the basics on how to get started with your new franchise on Thrive15.com, one of the most valued business schools in Florida!
Daniel Mckenna: What's up guys? My name is Daniel McKenna. I'm the Executive Producer here at Thrive 15. I also happen to be the President and the CEO of a artificial turf-cutting company. This is slow. Today we're talking about hitting the ground running with your new franchise. Who is Terry Powell? You're going to want to check this out. Specifically if you're getting into your new franchise, you're going to want to know how to get going as fast as humanly possible.
Terry has all the experience in the world when it comes to franchising. He's going to lay it out for you what you need to know to get going right away. Here at Thrive we believe that knowledge without application is meaningless meaning you have to do something with what you learn today in today's lesson.
Clay Clark: Terry Powell, how are you my friend?
Terry Powell: Great. Great to be here. I'm doing great.
Clay Clark: Hey, today we are talking about hitting the ground running with you new franchise. This is for all the people who have invested in a franchise business model or maybe somebody who's on the verge of investing and they're going, "What happens once I'm actually starting, day one sort of thing?" There's really 4 phases of business development for franchise owners or for franchisees. There's really 4 phases there. We're going to be discussing each one. Basically we're going to start off with Phase Number 1 here. I call this the Baby Phase but basically this is the phase where somebody has just signed the contract and before they see their first customer. Take me to that place. You can imagine I just bought one. I just paid you. I just bought the franchise. I haven't seen a customer yet. Walk me through what that phase is like, this baby phase.
Terry Powell: You have signed the license agreement. Now it's official. All the elements that come forward as a result of now becoming a franchisee under that license will become available to you. The beauty of it is that the franchiser has it all structured. There will be a pre-launch phase in most cases where they'll prepare you for the initial training and ongoing training to be able to open your franchise business. Right away they're going to want to get some of the details out of the way. Right now you're just learning about the business. It's building on your education and awareness around how to apply the franchise model for your own benefit.
Clay Clark: Correct me if I'm wrong here. I probably am but on the franchise disclosure document I can see a table of contents of my Operations Manual. I can see the table of contents for my Operations Manual before I buy one but I can't actually see the Operations Manual until I buy one. Is that right?
Terry Powell: Yeah. The Operations Manual is a big piece of that ongoing roll-out but also you're going to see in that disclosure document the curriculum and the process of what your training's going to be which is launch.
Clay Clark: There's a lot to know here. I could be learning new equipment. I could be learning my Operations Manual learning.
Terry Powell: Exactly.
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Clay Clark: I'm setting up a lot of systems. I think I've heard it said, "It's getting ready to get ready."
Terry Powell: You want to avoid that phase.
Clay Clark: You want to avoid that phase.
Terry Powell: That usually happens wen you get a little bit overwhelmed. Then you shut down a little bit temporarily. You spend too much time looking to grasp or understand everything before you actually start letting the business model benefit you.
Clay Clark: You're ready to take action here. You don't want to get stuck.
Terry Powell: Right.
Clay Clark: Do you find that a lot of franchise owners are a little bit scared right here where they go, "Uh oh. I just bought something." Do you see that or, "I just invested in something."
Terry Powell: Exactly.
Clay Clark: Do you see that?
Terry Powell: Right before that point we call that the sweaty palms syndrome. That's a checkpoint. We tell people, "Don't be alarmed by that. We'd be more concerned if you didn't have it." Then once they've made the commitment and have been awarded their license, they shift over to how quickly and how abundantly can I get the information that I feel that I need to get the business and get the results?
Clay Clark: I think we always have to keep it in mind, we have to mention this. You have to keep it in mind. The franchiser is not really making any money until you are making money as a franchisee.
Terry Powell: They're recovering some of the investments they had to make to to be able to bring you one and offer you a franchise. Now they're going to be putting the most energy and effort at that launch phase is when the franchiser is putting the most energy and effort as are their team members with the least amount of royalty coming in because you haven't even generated a dollar in royalties during that time.
Clay Clark: How much contact should a new franchisee be having with the franchiser at this phase in their business development? How much contact should they be having?
Terry Powell: The franchisee really doesn't need to be concerned about what that will be, how much it will be or what the steps are because everything is rolled out in a very strategic approach, paint-by-numbers, or think of it about building a skyscraper. You want your business to be a skyscraper but the foundation has to be built first. A lot of times they're going to want to jump to the second or third floor when the franchiser's going to keep you focused on the logical, sequential way to build on that.
Clay Clark: If I'm a little bit overwhelmed, OI feel a little bit over my head, this is normal.
Terry Powell: Yeah, its' very normal.
Clay Clark: I just don't want to get stuck getting ready to get ready. I want to keep on taking action.
Terry Powell: Yeah. Just allow the system to. We call it the Nike Principle. Just do it.