The Biggest Mistake Franchisors Keep Making | Dr. John P. Hayes - With Lee Plave

And what about, um- The way the industries that use franchising as their methodology, how has that changed? Uh, I'll give you an example.

I teach the A to Zs of buying a franchise at the franchise expos.

I've done it for 35 years across the country and in other countries as well.

And in the United States, 15 years ago, if I would've asked 100 people in my audience, "How many of you, if you buy a franchise today, will buy a food and beverage franchise?" And about at least 70% of the hands would go up, and that was pretty consistent for long time.

Yeah.

But today, when I ask that same question of 100 people, maybe five hands will go up.

That's-

So, what, what's happened? What, what, what have people discovered, or did something go wrong, or restaurant industry is just more difficult?

Well, it certainly isn't an easy industry [chuckles] to begin with.

But I think there's a growing recognition in other areas that franchising is indeed the way that they're operating and the way that they can expand their operations.

Our, our client base consists of food service businesses, to be sure, but they're, they're not even close to a, uh, a third of the work that we do.

Uh, we work with people in the medical field and, uh, obviously in hospitality and in travel and at hotels, mobility.

In, in areas that have probably been franchising in one form or another for decades, uh, perhaps just didn't realize it or having done it through company-owned operation expansion, have concluded that there is a real benefit to having somebody local and in the market.

And that, and that recognition has, I think, transformed some of those company-owned businesses that, that, i- into a franchise opportunity.

And there's a bit of a paradox there because when you come down to it, there are a lot of businesses that would look at the world and say, "Well, I can do it more centrally.

I can be the, I can be the conduit to my customers and my clientele from a central location." But it's that so-called last mile that actually does make a difference, the connection between the business and, um, its customer, its client, what have you.

Um, and that's really where the franchise relationship comes at, at its, at its peak.

And what about, um- The way the industries that use franchising as their methodology, how has that changed? Uh, I'll give you an example.

I teach the A to Zs of buying a franchise at the franchise expos.

I've done it for 35 years across the country and in other countries as well.

And in the United States, 15 years ago, if I would've asked 100 people in my audience, "How many of you, if you buy a franchise today, will buy a food and beverage franchise?" And about at least 70% of the hands would go up, and that was pretty consistent for long time.

Yeah.

But today, when I ask that same question of 100 people, maybe five hands will go up.

That's-

So, what, what's happened? What, what, what have people discovered, or did something go wrong, or restaurant industry is just more difficult?

Well, it certainly isn't an easy industry [chuckles] to begin with.

But I think there's a growing recognition in other areas that franchising is indeed the way that they're operating and the way that they can expand their operations.

Our, our client base consists of food service businesses, to be sure, but they're, they're not even close to a, uh, a third of the work that we do.

Uh, we work with people in the medical field and, uh, obviously in hospitality and in travel and at hotels, mobility.

In, in areas that have probably been franchising in one form or another for decades, uh, perhaps just didn't realize it or having done it through company-owned operation expansion, have concluded that there is a real benefit to having somebody local and in the market.

And that, and that recognition has, I think, transformed some of those company-owned businesses that, that, i- into a franchise opportunity.

And there's a bit of a paradox there because when you come down to it, there are a lot of businesses that would look at the world and say, "Well, I can do it more centrally.

I can be the, I can be the conduit to my customers and my clientele from a central location." But it's that so-called last mile that actually does make a difference, the connection between the business and, um, its customer, its client, what have you.

Um, and that's really where the franchise relationship comes at, at its, at its peak.