Person in Mirror May Be Emerging Franchisor's Worst Enemy
Most speakers urge their audiences to turn off their phones and focus on the presentation, but not Philip Schram. “Take out your smartphone. Go on the photo app. Put it in selfie mode. Point the camera toward you,” he urged attendees at the IFA’s Emerging Franchisor Conference in Phoenix Tuesday morning.
“What do you see? You see you!” said the chief development officer at Buffalo Wings & Rings. “The individual in the photo will be your worst enemy in crossing those thresholds.”
The thresholds he referred to were milestones in unit development for franchises: 10 units “is a big one,” and he had already noted that at least half the audience had raised their hands when he asked who had under 10 units.
Fifty is the next milestone, and Buffalo Wings & Rings “went through that a few years ago.”
One mistake the brand made at the time, he said, was to lose control of geographic focus. It was 2005, and the business-to-business internet had made its debut. “We became extremely good at selling all over the world. Today we are still paying the consequences of that,” he said.
On the other hand, he said, getting to 50 franchises allows for “financial independence,” because at that point the royalty streams are flowing enough to sustain the brand.
The next threshold is about 200 units, and with all the milestones, he urged franchisors to keep evolving. “Each time you triple the size of your company it’s a different company,” he said. “You need to grow your company in all directions.”
Schram left Paris, where he grew up, to come to the United States years ago, and he has the heavy accent to prove it. He said he’s always been thrifty, and he encourages other franchisors to be so, too.
“When I left home I had $50, which was my savings from the quarters” his parents would give him as an allowance. “The last time I had a personal loan, I was 27, and we’ve always had positive cash flow” at Buffalo Wings & Rings.
Today, he and his partner, owners of Buffalo Wings & Rings, are still frugal. “We don’t take distributions from the business,” but rather put extra cash back into the company. “We take a modest salary.” He recommends other emerging franchisors spend money on others—to bring in great talent, for example—rather than on themselves.
The International Franchise Association Emerging Franchisor Conference continues through Nov. 8 at the Sheraton in downtown Phoenix.