Content provided in partnership with

Business Services Industry

Executive decision: corporate execs are jumping into franchise ownership and experiencing a whole new side of business

Entrepreneur, July, 2005 by April Y. Pennington

You've climbed the corporate ladder and put in the time and toil to achieve success. But perhaps you've wondered if there's something else for you, and you've ultimately resolved to purchase your own franchise. Your experience in the corporate world should be more than sufficient to prepare you for this new career, right? After all, what's managing 10 hourly employees when you've spearheaded multimillion-dollar marketing campaigns or overseen the operations of a global empire? Well, making the transition from executive to franchisee may entail a lot more than you think.

Most Popular Articles in Business: Research and Markets : Tesco Plc - SWOT Framework Analysis; Do Us a Flavor - Ben & Jerry's Issues a Call for Euphoric New Flavors; eBay made easy: ready to start an eBay business? These 5 simple steps will ...; Katrina's lawsuit surge: a legal battle to force insurers to pay for flood ...; Wal-Mart's newest distribution center opened last month near the southwest ...; More »

But don't fret. All your knowledge and experience can give you advantages as a franchisee. Take it from these ex-executives-turned-franchisees, who reveal what their previous lives prepared them for and what they had to learn along the way in their great franchise adventures.

New Territory

William Kosti got his first taste of El Taco Tote Real Mexican Grill while on a business trip to El Paso, Texas, working as director of business development for a consulting company. He thought the food was excellent and, in the back of his mind, he kept the idea of bringing the franchise to his home in North Texas, where TexMex was the closest he could get to Mexican food. When Kosti, 44, was laid off in 2003, he made his idea a reality and opened an El Taco Tote franchise in the Dallas/Fort Worth area.

His corporate background proved beneficial: Kosti had the savvy required to develop a business plan, forecast sales, create a startup budget, and secure funds for operations before and during the launch period. And when he was working on getting financing from banks and SBA lenders, his corporate background seemed to put bankers at ease.

One of Kosti's most important advantages was his understanding of how vital information is to a successful operation. By opting for very extensive point-of-service and back-office systems, Kosti can keep track of sales and consumer behavior in relation to sales. He says analyzing this information on a daily basis allows him to "anticipate any future problems and take corrective measures, whether internal or external."

Kosti also felt setting up an effective marketing plan to "create consumer awareness and brand the name in the market" was another main objective. Because this franchise and its type of food were new to his region, Kosti got franchise approval to fine-tune menu items at his location, resulting in a trial-and-error stage. Since he was once part of the market he was trying to attract, he created lunch specials priced between $3.99 and $4.99, which he knew would lure the corporate crowd.

Kosti did find it somewhat difficult, however, to transition to a new type of staffing. He realized many of his employees would be hourly wage-earners in an industry with high turnover, but he also knew he couldn't let that compromise quality, cleanliness or superior customer service. By empowering managers to oversee operations and employees, Kosti gets feedback that helps him retool the schedule so it's more efficient and zero in on any problems that need attention.

Though Kosti's corporate experience couldn't completely prepare him for handling the customer-service issues of his new franchise, he says, "Customers are customers regardless of what business. You're going to have to deal with a variety of customer moods and expectations." He recalls observing one man who almost brought a cashier to tears when he was upset she couldn't ring up a misprinted coupon. Kosti intervened and calmly explained that the register had restrictions that would not allow the cashier to enter the discount. He offered to not only give the customer the lunch free, but also to honor the coupon for another time. "He became one of my best customers," says Kosti. "I didn't anticipate that [problem], but I dealt with it."

Hands On

When he became a Volvo Rents franchisee in 2004, Pete Post had already spent over two decades as an executive in the multibillion-dollar rental industry and was the president and COO of Prime Equipment, a multimillion-dollar general rental corporation he helped to expand. He had watched the Volvo Rents concept develop and saw potential in the Houston market, so he decided to purchase a franchise in the area. Since he already had experience in the rental business, he was well-prepared when it came to negotiating contracts, hiring and training employees, managing budgets, and overseeing operations and new-business development.

Post found that going from president and COO of a major corporation to franchise owner in the same field was easy in some ways and challenging in others. But when it came to managing, the smaller operation suited him perfectly--free from the multi-layered process of corporate decision making, he could call his own shots.

Because Post spent his time in the corporate world focused on one segment of the business, his customer interaction and employee management skills were a bit dusty. "It's a big change coming from more of a management/administrative perspective to take on the day-to-day running of a business," admits Post. "You deal with problems when you have them. A sick employee is no longer a statistic for the HR department."

Business Services Industry

Executive decision: corporate execs are jumping into franchise ownership and experiencing a whole new side of business

Entrepreneur, July, 2005 by April Y. Pennington

Find Research Guides for:

Find Featured Titles for: News

Most Popular Articles in Business

Most Popular Publications in Business