Mike Andes started to explore the ins and outs of franchising when he became a franchisee of Anytime Fitness. He learned a lot about the franchising model, how to train franchisees, and most importantly, what's expected from a franchisor.
"Franchising is a unique business model. I don't think it's for everyone. I also think that certain industries work better with the franchising model," explains Mike.
The Start of Augusta Lawn Care
A year after becoming a franchisee of Anytime Fitness, Mike started Augusta Lawn Care. With his previous knowledge, he set out to create a unique franchising model that better fit his new business.
Today, Augusta Lawn Care has over 40 franchises across North America, but that's not Mike's final goal. "We're looking to get 500 franchisees over the next five or six years. And so we're growing and scaling from here," explains Mike. Keep reading on how he plans on pushing for more locations.
Key Takeaways on Franchising
Here are just a few key takeaways on franchising we took from our conversation with Mike. Be sure to listen in on the full episode for more insightful tips.
1. Set Realistic Expectations
Mike believes that most people underestimate the complexity of running a service-based business. According to him, one of the biggest misconceptions about his particular industry is that it’s easy.
"Oh, you just mow grass, that's easy," is the phrase people from Mike's sphere frequently hear. But, is it? "Theoretically, yes," says Mike. But people often underestimate its complexity, which is why certain services may not be a common franchisee's choice.
According to Mike, one of the things that make this job challenging is the fact that the quality of service depends on each franchisee and their employees.
"We are a service-based business where creating systems around the actual product is a little more difficult because you depend on human error... And we still depend on an employee to do a good job and make a straight line with a mower. And that can be a challenge sometimes," Mike explains.
2. Focus on Finding Reliable Labor
Speaking of relying on your employees, another thing that has proven a challenge for Augusta Lawn Care and many other service-based businesses is finding employees. Mike believes that employees have a much broader range of job options than before, and their expectations are much higher than they used to be.
"Employees are no longer comparing a $12 and a $13 per hour job. They're comparing a $15 and a $16 per hour job with incentives like a free iPhone," explains Mike.
However, not all workers dedicate their time equally to performing their work-related duties. While some do complete their tasks with the highest level of professionalism, others may not be quite as detail-oriented.
So as a service-based business, how does Augusta Lawn Care fairly compensate those who are delivering top-quality work?
"Look at pay-for-performance, where the employee gets a percentage of the labor revenue instead of an hourly rate. I think this is a very important thing for any service business where there's labor that comes into play," concludes Mike.
3. Prioritize Honest Communication with Franchisees
For Mike, communication is key to maintaining a fruitful franchisor-franchisee relationship. However, not all franchisors have mastered communication with their franchisees.
"I'm surprised by the lack of communication in so many organizations. A lack of communication led to so many fractures that were emphasized or accentuated by COVID," says Mike.
In Mike’s experience, a lack of communication may lead to misunderstandings, fake scenarios, and wrong assumptions that result in bad business decisions.
"Whether you're a franchisor with multiple locations like us, or you have three or four employees, the bottom line is if people at the bottom of the organizational level don't have information, they're going to come up with it in their head."
To avoid miscommunications, Mike relies on an open-book management approach. This strategy has strengthened his relationship with his franchisees and it encourages open dialogue, questions, and honesty.
"If there are questions, I'll answer them like in an open forum. And franchisees are encouraged to bring things up to me as a franchisor in a very open dialogue," concludes Mike.
4. Prepare to Make Tough Decisions
Lastly, Mike points out that being a franchisor is not an easy job. As a company with over 40 franchises across North America, Augusta Lawn Care must ensure all the locations are delivering a top-level quality of service to their customers.
When a franchise is not delivering, you must be prepared to make decisions that will benefit your business long-term.
"Last spring, we did have to close a location that was not upholding the brand standards. We had to close that franchise down because they were not following the systems. They did not have good customer service. There were too many complaints being brought in, and they were given plenty of warnings."
Although Mike gives his best to help franchisees resolve problems, sometimes it’s inevitable to close them down. After all, it’s quintessential to protect the brand image.