Franchise owners reach to bottom to staff top

Date: SEP 21st, 2011

Topic: Franchise News

Toiling on the front lines in a restaurant chain or any other franchise may not always be the most enviable of jobs, but the company's owners rely on these entry-level, often parttime staffers as potential new franchisee candidates.


Take Michelle Kendall. The 26-year-old business administration student got her first job as a hostess with pancake chain De Dutch Pannekoek House Restaurants Inc. at the age of 17, at "the bottom of the chain," as she calls it. Her work ethic and natural connection to people helped her rise quickly from server to dining room manager. When the general manager went on leave, she assumed that position, too.


When he didn't return, she kept the position at the Surrey, B.C., restaurant, which happened to be owned by the company's president, Bill Waring. When De Dutch targeted a new shopping centre development for a new franchise, the original candidate backed out at the last minute. Waring offered Kendall the opportunity. "He approached me," she says, "and asked if I wanted to give this a go on my own, so that's how it came about."


As a student in her early twenties at the time, she "had a very small bank account," but with the help of family and friends, and the support of the corporate team, she was able to secure financing for the new franchise. "I used to think: That would be awesome if I could come up with the money to do that, but I was at school at the time so it was always just in the back of my mind," Kendall says. "I've always been entrepreneurial and wanted to work for myself - to be my own boss - so I didn't think twice about (this opportunity). I was ecstatic. I had such a good relationship with the franchisors, but it was a once-in-a-lifetime opportunity."


She opened the doors to her new De Dutch restaurant on Feb. 10 and will be back in class this fall to finish her degree. Promoting front-line workers through the ranks to eventually become franchisees is fairly common among franchisors. Staff recruits know the system inside and out, have presumably demonstrated skill, competence and passion for the business, and often know other franchisees in the system.


"All those things really do pay off," says Glenn Whitehead, a senior vice-president with Oxford Learning Centres in southwestern Ontario. Having a franchisee who demonstrates the entire range of practical skills and competencies is especially important when your business is teaching and tutoring children.


"If you have a really good understanding of the day-to-day working level . you come in willing to roll up your sleeves and get in there with the parents every day. You understand how critical it is to be involved and manage that customer experience," Whitehead says. Amanda Dervaitis opened an Oxford Learning Centre Toronto after earning a degree in education. She worked her way up from the front line while on practicums in school to become education director of another location.


"I started doing anything and everything - taught the tutoring program, the Little Readers program, I cleaned toilets, I took inventory and did orders - literally everything," says Dervaitis, now one of the franchisor's top performers. Dozens of franchisors contacted cited examples of front-line workers who ended up as successful franchise owners, citing it as a core part of their franchisee recruitment strategies.


The franchisor is also generally more agreeable to working out the financing with a known candidate who's proven their performance. The total cost of buying an Oxford Learning Centre, for example, including all first-year operating and startup costs, ranges from $200,000 to $250,000. Like Kendall, Dervaitis relied on support from family through a loan to get started, but the corporation helped her work with the banks to secure the remaining financing. "I have zero business background, but I've managed to be quite successful doing something I love," she says.


Then there are extreme examples of this phenomenon. Pino Di Ioia started out in business running a Montreal amusement park stand selling BeaverTails, a doughnut-like treat. Di Ioia is now the chief executive of the company. While earning his undergraduate degree and MBA, he went from being an employee to manager to franchisee, to multi-unit, multiconcept franchise operator for more than 20 years before landing the post. BeaverTails now operates 50 franchises across Canada and in the United States, and requires an initial total investment of between $88,000 and $217,000.


As general manager of a De Dutch location, Kendall got to know every facet of what makes any good business work, from heating, ventilation and cooling systems to dealing with the plumbing and electrical issues that inevitably happen. But what makes the difference for an entry-level, future-franchisee candidate to be successful is standing out.


"My work philosophy has always been to work hard at it and do the best job I can," she says. "Somebody was watching. If you keep working hard, it doesn't go unnoticed. You get back as much as you put into it."


By DEREK SANKEY, Postmedia News