Learn from the ways these franchises boosted their bottom lines. January 14, 2020 12 min read This story appears in the January 2020 issue of Entrepre
Learn from the ways these franchises boosted their bottom lines.
January 14, 2020 12 min read
Strategy #1: Focus on your (faster!) fundamentals
Company: Scooter’s Coffee
Franchise 500 Placement #460 last year; #225 this year
People will reward the company that serves them fastest. That’s the theory at Scooter’s Coffee, at least — and it’s showing results. “If you look at the national data, the average drive-through wait time at Starbucks is just over four and a half minutes,” says Tim Arpin, VP of franchise recruitment. Scooter’s aims to do it in 40 seconds. And customers don’t even have to leave their cars, since the coffee arrives via a drive-through kiosk window.
This superfast concept has helped Scooter’s open about 30 locations annually for the past six years. Last year, that number more than doubled to 65 (which helped send it 235 spots higher on our list), and next year the company expects to open 100 more units. To explain the growth, Scooter’s points to a COO hired from Starbucks in 2017 and a chief development officer formerly at Arby’s in 2018. But the real story comes from the years leading up to the hires, when Scooter’s invested more heavily in its foundation than it did in recruiting franchisees.
“Often franchises bring in a franchise seller and sell a bunch of units, thinking the rest will solve itself,” says Arpin. “It’s a cautionary tale in franchising; brands get out over their skis.” Scooter’s has maintained balance by never allowing its ambition for growth to overtake its focus on the customer experience. And even now, as the company ramps up its expansion efforts, it continues to work toward faster service with a new POS system, a new suite of analytics tools that will help it anticipate growth, and a pilot program for preordering drinks. “Everything we roll out is focused through the lens of creating a frictionless experience,” says Arpin. “It takes a lot of foresight, investment, and patience, but it’s the right way.”
In this brand-building vision, growth follows the service, and not the other way around. “We have a clear understanding of what works and what doesn’t for our model,” says Arpin. “That has allowed us to accelerate our growth efforts without spending too much time second-guessing ourselves.”
The company has several new initiatives to celebrate, such as a mobile app and a canned cold brew it can sell in supermarkets. And in a recent survey, 90 percent of franchisees reported they were happy enough with the company to recommend a franchise to friends and family members. But Arpin insists success will continue to follow its ability to impress customers. “Often, you get one swing at somebody,” he says. “If you focus on speed and customer service, they will come back. And they’ll bring their friends and family, too.”
Strategy #2: Be very, very franchisee-friendly
Franchise 500 Placement Unranked last year; #231 this year
When the 2008 recession hit, Mike Meursing saw an opportunity. The country had a surplus of highly motivated people who weren’t earning what they were worth, and he wanted to put them to work. So Meursing built GarageExperts, a low-cost franchise that would pick up the self-starters that other franchise companies overlooked.
The company provides pro-level makeovers on neglected garage space. And the entry costs are easy to swallow. Franchisees pay a $15,000 fee to launch their business, and if they don’t bring in at least $750,000 during their first three years, the corporate office will refund that franchise fee. “We want them to have a little bit of skin in the game,” says Meursing. “But more important, we want them to have money to use for their marketing and everything else they need to build up the business.”
The model all but demanded slow, careful growth. Unlike a company that charges, say, $50,000 in franchise fees — with no guarantee on revenue — Meursing put himself in a position where he was fully reliant on his franchisees’ success. If they didn’t succeed, he wouldn’t make money. So he onboarded franchisees gradually and spent time making sure each one knew how to follow the company’s strategy. For instance, the company coaches franchisees to manage their supplies carefully, buying only what they need for each specific job. “We don’t want franchisees buying material that’s going to sit in their garage and collect dust,” says Meursing. “This way, they don’t have too much money tied up in inventory.”
In 2018, after a decade of success, Meursing finally felt comfortable scaling. “We were confident that the systems we had built were now at a point where we could begin a hypergrowth strategy,” he says. That year, GarageExperts added a record 31 franchisees. It also boasted its lowest rate of franchisee turnover — a testament to its ability to better screen for successful franchisees. All that helped create a strong return to our list after dropping off it.
And by all evidence, the company’s growth is just beginning. GarageExperts recently introduced new rules that would make it easier for current franchisees to purchase more territories, and last year, it launched a national commercial ad campaign. The system now includes 90 franchise units in 30 states, and as the growth threatens to create distance between the franchisees and the corporate office, Meursing is introducing new methods for making sure that each owner still has a voice. GarageExperts recently surveyed its partners to learn where exactly they need more support. “We’re going to release those results and talk about them at an upcoming convention,” says Meursing. “We want to have transparent communication with our franchise partners, and we want to be as good as we can to help them grow.”
Strategy #3: Differentiate with more than just product
Company: Burn Boot Camp
Franchise 500 Placement #424 last year; #212 this year
Through a message that pairs fitness with self-love, husband and wife Devan and Morgan Kline have built a fan following of neighborhood moms. And five years ago, when the superfit couple decided to franchise their company, Burn Boot Camp, those self-loving customers raised their hands to carry the torch of Burn. Turns out, empowerment is contagious. “There’s a lot of passion here,” says Jolene Purchia, VP of business development. “Our culture was built on community from a very early start.”
The studio grew fast. Already it has 234 locations, with 180 more in development. And roughly 85 percent of Burn’s franchisees started as customers. Its membership is 94 percent women, and they appreciate perks like complimentary childcare and universal access to any location. But it’s the emotional support that steals them away from other workouts. That’s been true since the Klines held their first-ever Burn Boot Camp workout in the parking lot of a gymnastics studio in Cornelius, N.C. They focused on weight loss, sure, but also on motivation, community, and a sense of belonging.
“I think a lot of companies in our space want to be the best workout,” says Devan. “And we’re just a relationship company that recognizes people need to be empowered; we recognize how impactful trainers can be in people’s lives.”
To give customers hits of Burn between sweat sessions, Morgan hosts a women-focused podcast and cooking show. “We envision a world where women can love themselves today and be inspired by who they are tomorrow,” she says. “And that’s not an exercise plan with some macronutrient ratios that you follow for 90 days. That is a promise. It’s a brand promise.”
Recently, the Klines went on a national tour, visiting 120 franchise locations in 18 months. “We are down in the weeds with the clients, training them, hanging out, letting them tell us their stories,” says Devan. “As a by-product of that, we’re showing support to our franchisees.” They’re letting them know: You belong. You’re doing great. We still believe in you.
As explanation for the company’s giant leap of 212 spots on this year’s Franchise 500, Devan points to the power of exponential growth. “This the first opportunity we’ve had for a large number of franchise partners to expand their businesses simultaneously,” he says.
Strategy #4: Build a family-oriented culture
Company: Bloomin’ Blinds
Franchise 500 Placement Unranked last year; #160 this year
Blinds aren’t a very sexy topic,” says Kelsey Stuart, CEO of Bloomin’ Blinds. “Nobody goes to career day and says, ‘I want to be a blinds guy.’ ” So how did this family-owned business — which, to be clear, sells and repairs blinds — skip 340 spots on the list this year? It began focusing on the culture that differentiates it from other franchise companies.
Stuart’s mom launched Bloomin’ Blinds after moving to Texas in 2001 and 13 years later awarded its first franchise. Stuart and his two brothers, Kevin and Kris, took over in 2017 to continue the growth into a national franchise. Their slow-growth strategy allowed them to put their family before business, and recently, the brothers decided to lean hard into that aspect of their company. In its recruitment material, for instance, the company now boasts that it’s designed to operate during regular business hours, so franchisees can be home with their children and spouses in the evening. “Our franchisees feel like they’re part of our family, and they have their own families, too,” says Stuart. “We convey that connection.”
Related: Five Ways to Finance a Franchise
The schtick works because — well, it’s not schtick. The Stuart brothers work side by side in a 15-by-15 office, and during business meetings, it’s typical to see their kids running around. And while most companies provide assistance for business-related inquiries, Bloomin’ Blinds franchisees have the brothers’ cell numbers on speed dial. Sometimes the kids join the conversation. “I’m sitting on the couch with my family, and one of my guys in California calls,” says Stuart. “I’m talking, and my girl looks at the phone and goes, ‘Hi, Mr. Steve!’ ”
To protect the personal, family-first culture, Bloomin’ Blinds still keeps its growth in check. “If we doubled or tripled our growth rate, it would just be too many people,” says Stuart, who likes to say his daughters make the company’s business decisions. “We couldn’t possibly provide the kind of service we’re trying to.” Still, Bloomin’ Blinds added 10 new franchise locations in 2019 — and the company’s strength was enough to not only crack the Franchise 500 but make one of the biggest jumps of any company.
Over the years, the brothers have learned a lot about mixing family with business. Specifically, they discovered that you can’t micromanage. “We give each other a lot of freedom,” says Stuart. “Because that’s the only way it works when you work so closely with family.”
Strategy #5: Strengthen your core before expanding your units
Franchise 500 Placement Unranked last year; #230 this year
I know exactly what it’s like to be a franchisee,” says Laura Coe, co-owner of Snapology. Before she launched the company, which offers STEAM and robotics courses, Coe ran both a residential cleaning franchise and a senior-care franchise. The experiences left her burned out. “With one, if I had a question, there was no one to call,” she says. “There was no support with marketing and sales, and no real guidance on hiring people. Essentially, I had a few days of training, and then I was on my own.”
So when Coe launched Snapology with her sister in 2010, she vowed to always support her franchisees. Before franchising, the company spent five years building its core product: a robust curriculum. And when it finally did franchise, it moved at a careful pace of 10 to 12 units per year. “We grew slowly the first few years to make sure we had the infrastructure in place to support our franchisees fully,” says Coe.
But while the company’s progress appeared modest from the outside, under the hood Snapology was building a massive engine. Coe hired a team of writers, robotics experts, engineers, architects, and a “master builder” to design LEGO builds. Over time, they created a curriculum of more than 40 birthday party guides and 70 educational programs, each with a unique lesson plan, ranging from six to 15 hours. “Whoever has the best curriculum at the end of the day wins in this industry,” says Coe.
By 2017, the pieces had come together, and Coe decided that Snapology’s infrastructure was finally sound enough to support faster growth. So she stomped on the accelerator. She sold a master unit in China (and later one in Australia), while domestically, she hired a new franchise developer to onboard more franchisees. At the same time, Snapology began boosting its profile with heavy SEO investments, which ultimately led to a boost in organic leads.
In 2018, Snapology opened a record 19 franchise units, and in addition to a handful of international units, it opened 26 more in 2019. To make sure new franchisees are properly supported, Coe assigns them a digital marketing director and a marketing analyst, who spend six months helping build out a tailored social media campaign with videos, blogs, and optimized SEO. “We’re proud of the support we give our franchisees,” says Coe. “I believe it shows our dedication to their success.” And when they win, so does Snapology.
This article is from Entrepreneur.com