Commentary on IFA 2023

IFA Reminds Franchisors "You’re in business for yourself but not by yourself!"

Legislative challenges, communication & culture were the overarching themes at IFA 2023, which took place at Mandalay Bay in Las Vegas, NV from 2/25-3/1. Over 4000 of Franchising’s top professionals descended upon the Vegas strip for 5 days of jam-packed information, shared best practices, networking and ideation of ways to enhance, improve, and protect the Franchise Industry. 

It’s interesting to even think of “franchising” as an industry, but that is what it has become. Gone are the days when a founder could have a great product, a special sauce or a better mouse trap and people would pay for the rights to that I.P. With the glutton of information on the internet, there really is no such thing as a special sauce. Good franchisors realize this. And from this, an entire industry of “franchise companies” has been born. 

What does this mean for potential franchise owners? It means better support, better technology, better training, and a better understanding of the need to recruit the IDEAL franchise owner into your network or franchise system. That is how you build a strong franchise company. This new view on the industry has led to more competitive advantages for local franchise owners vs their mom & pop competitors. It has also led to a highly competitive landscape for franchisors looking to grow their brand. Finding the right fit in a franchise owner, and treating them as a uniquely talented individual who adds value to your network sounds simple, but it most definitely is not. And thus, it has lead to the creation of an entire industry, which is Franchising.

Franchise companies can be operators, but that is not their sole business. Franchisors are in the business of recruiting, awarding, onboarding and supporting independently owned and operated businesses. In many cases, it is very hard to do this in addition operating a location and do both well. Do you need to have industry knowledge and understanding to be a good franchisor? Yes! But we are seeing more and more that the best franchisors are really good at growing the brand and supporting their owners vs being the best operator of a single location in their system. This is where the secret sauce really lies. With this shift and evolution, more and more highly sophisticated franchise companies have entered the marketplace. It was only a matter of time before government oversight would creep in to try and level the playing field.

This is the topic that opening speaker and CEO of McDonald’s Corporation, Chris Kempczinski addressed during IFA. He cited many examples of government overreach, namely in the state of California, which threaten the existence of Franchising as a whole. He also eloquently described the way in which franchising can create generational wealth for many, which would be the biggest loss if these legislative actions are not put to rest. Indeed, the franchise model is under attack. Luckily, franchising is full of entrepreneurs, who won’t let anything stop them. We will find a way!

The other speakers at IFA carried this theme throughout the conference but focused on the people being the difference maker. We heard from DINE Brands CEO, John Peyton about “disrupting from a place of strength and scale.” How a disrupter doesn’t need to be a “startup.” Super Bowl MVP, and multi-brand franchisee and franchisor, Drew Brees shared the importance of a personal connection with a brand. And lead the most rousing pre-game chant I’ve ever heard! We heard from Ginny Clarke about the need for a “Talent Plan” and how culture comes from your leaders, so be sure to test their “leadership competency.” IFA put together great breakouts on unit economics, how to measure data, ChatGPT, franchise sales and more. The “Thought Leadership Roundtables” were lively and fruitful, and “Franchise City” was a buzz with suppliers and resources for the franchise industry. Truly, the event proved, that while perhaps it may be under attack, the franchise industry is here to stay. With 20% of the world’s population doing business with a franchise concept EVERY DAY (according to FranData), how could it go anywhere? And with 167 MILLION (FranData) opportunity seekers out there right now, this industry is poised for exponential growth for years to come.

The final theme I walked away with was that it can never be overstated how important franchise owners are to the franchise model. Yes, the brand matters. Yes, the business model is important. But it is good to be reminded, that without single and multi-unit franchisees, there is no business or brand to grow. They are the local leaders who give opportunity to working mothers, train entry level teens, give fathers work to feed their families.  The local franchise owner is the one who sponsors little league teams, and church clubs, and donates to the local food pantry. They are the difference makers, and it is the franchisors job to find the best ones and lead them, to grow their brand, and take their secret sauce to more places than they could have taken it by themselves. Often times we hear the expression that “owning a franchise means; you’re in business for yourself, but not by yourself” whenever this is said, it is always referring the franchisee in this relationship. It is good for franchisors to be reminded that it is also referencing them!

Brandon Clifford  

COO - Business Alliance, Inc. 

www.BusinessAllianceInc.com  

Mission Statement: Business Alliance, Inc. is the premier resource for growth of our Consultants, Brands and Suppliers in the Franchise Industry.