Five Lessons Franchisors Can Learn From Network Marketers to Expand And
Build Their Franchise Companies
By Dr. John Hayes
Franchise companies tend to think of themselves as a level or two (at
least) above multi-level marketing (MLM) companies, but having worked in
both industries I have discovered that MLMers (or network marketers) do some
things more efficiently and effectively than do many franchisors.
Here are five ways you can borrow from the MLM community and help your
franchise network achieve greater success:
Build relationships first, empires second Make duplication as important
as the system Be willing to work for others Make continuing education your
business Cultivate a pass-it-on mentality
Build relationships first, empires second
Network marketers emphasize building relationships. Franchisors emphasize
selling franchises. Of course, franchisors train and support franchisees,
too — some do it equally as well as the best MLM companies — but often
there's not much emphasis on building a relationship, either between the
franchisor and franchisee, or among franchisees.
Scott Boulch, a marketer who has succeeded in MLM and also worked with
franchise companies, says, "People in MLM understand their income is one
hundred percent dependent on their downline success, so relationships are
important. But in the franchisor/franchisee relationship there's less of a
connection. It's like they get a big franchise fee upfront and monthly
royalties, but there's less concern about the day-to-day development of the
franchisee." Top network marketers value relationships — it's a way of life
Tom Ziglar, son of Zig
Ziglar, whose speeches and books have inspired countless network
marketers and franchisees worldwide, adds, "Success is about relationship.
What a new franchisee really needs is a relationship with a real human being
at the home office who can coach them every week on how to grow the
business, and who also has a real relationship with them. Great network
marketers not only sponsor someone into the business, they coach them daily and help them grow and recruit new people. They are more than just
the sponsor, but a friend.
Make duplication as important as the system
"Without duplication, all your time and effort goes to waste because you
don't get a big upfront payment in network marketing, and you want to be
sure you get paid on the back-end," explains Boulch. He says new MLMers are
told "to do exactly what your upline does; don't deviate."
In fairness, franchisees are told to "follow the system." But it's not
the same. In franchising, the upline is usually the corporate office. In
MLM, distributors don't need to call the corporate office. When they need
help their upline may live just across the street, or they'll be at the next
weekly meeting. Hands-on help is almost immediate in MLM and it cultivates
"There's no room to be entrepreneurial," continues Boulch. "Entrepreneurs
don't make good franchisees and they don't make good network marketers,
either. Those who do exactly what their upline teaches them to do will
succeed." Relationship impacts duplication, too. It's easier to get people
to duplicate when they're working directly with someone who cares about
their performance and welfare.
Be willing to work for others!
It's an odd thing about MLM, but the successful people, those at the top
of the uplines, are willing to go to work down line. "The job of the upline,"
continues Boulch, "is to make money for their downline. It's backwards in
franchising. Franchisees are seen as making money for the franchisor. But in
network marketing, the upline works downstream."
Again, relationship is a key. If franchisees sense they have a "friend at
corporate" they are more likely to perform better.
Make continuing education your business
Franchising is often in the business of franchising whereas network
marketing companies are in the business of training and education. "Network
marketing companies are constantly educating," says Ziglar. "They complete
one event and they immediately begin building to the next event. They do a
very good job of keeping people plugged in to everything the company is
doing. There's massive communication effort upline and downline." In
franchising, franchisees sometimes complain that they only hear from their
franchisor when they've done something wrong.
In general, franchising can benefit by implementing more educational
programming, as well as opportunities to communicate. Typically, in a good
MLM company there are several network phone calls weekly for educational and
communications purposes. In addition there are webinars and online
updates. Typically, franchisors under-utilize technologies that advance
communications and education.
Cultivate a pass-it-on mentality
Successful network marketers must teach the next person. They must pass
on their expertise to the next person.
Franchisees learn the system in training, usually at the corporate
office, and they get ongoing support, but not usually from another
franchisee, or practitioner. Franchisees are not expected to teach other
franchisees about how to work the business, and yet, franchisees appreciate
learning from other franchisees. That's why franchisee mentoring programs
are popular. The MLM community knows the value of passing it on.
"In MLM," says Boulch, "a distributor learns the ropes from another
distributor, and is then expected to teach the system to many more
distributors, thus creating their downline. Teaching re-enforces the
training. The minute you have to teach someone else how to do it you get
better at it."
Go ahead, step down to new opportunities!
Even if it feels like you're stooping, any one or all of these five
lessons may stretch your franchise network to new levels of success. And
there are at least five more lessons to follow — you'll find them in
Network Marketing for Dummies, a book that I wrote with Zig Ziglar.
Since 1979, John Hayes has worked in the franchise
community as a consultant, franchisee and franchisor. He is the author of
several franchise-related books and countless articles that have appeared in
media worldwide. Dr. Hayes has served for many years as an advisor to
franchisors, franchisees and small business owners internationally. He is
the author or co-author of 18 non-fiction books including the Franchise
Pre-Investment Checklist, Franchising: The Inside Story, Start Small, Finish
Big, You Can't Teach A Kid To Ride A Bike At A Seminar and Get It! and The
Secrets of Cultivating the HomeVestors Millionaire Mindset. To contact Dr.