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Smart Franchising With Fransmart

Episode #10: Building Effective Franchise Systems with Aicha Bascaro

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Smart Franchising With Fransmart - Episode 1
Jun 4, 2024
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Tune in as Aicha Bascaro, with over 35 years in the franchising industry, shares her expert insights on the challenges and strategies of running a successful franchise.

Aicha, who founded the American Franchise Academy, shares her insights on the gap between what franchisors teach and what franchisees need to succeed. Learn the importance of building effective systems for managing multiple franchise units, the role of leadership in franchise success, and how franchisees can prepare to scale their operations effectively.

Caring about people is crucial. A potential client confessed to hating people and being motivated by money alone. Consequently, we didn’t accept him into our mastermind due to our selectiveness. He’s struggling and likely always will.” – Aicha Bascaro

This episode is packed with practical advice from her extensive experience with global brands. It is essential for anyone involved in franchising, whether you’re starting out or looking to grow your business. Listen now to gain valuable insights from a seasoned franchising pro.

Episode transcript

Dive into the text transcript of our insightful conversation where we uncover the strategies and stories behind successful franchise brands. Explore at your own pace and gain valuable insights to fuel your franchising journey.

Read the transcript

dan rowe (00:03.526)
All right, Aisha, I wish I met you 30 years ago when I was first starting out my business and you had this practice because I think of how much more successful our franchise ors would have been. Our franchisees would have been, and I would have been so, uh, Aisha, but Scott wrote, uh, who’s a real operations pro. Unlike so many people giving advice nowadays, she actually knows what she’s talking about. I follow you on LinkedIn and, uh, you created the American franchise Academy.

authored a great book I devoured when it first came out, The Franchise Fix. And, um, and I finally met you and you’re a rock star son at an IFA event last year in New Orleans. And I thought you’d be a good, uh, interview for the smart franchising with Fransmart. Your, your superpower is closing the gap between what the franchise or teach you when you’re buying a franchise and what you actually need to be successful with the franchise. So.

You know, franchise or is if you want success, you must focus on your franchisee success. And most don’t. So to me, there’s a gap between what the franchise or strain and what the franchisees need to know to be successful. For example, the franchise or teach you to make the burger, to paint the house their way, you know, to do all that other stuff. But that’s not why people are buying a franchise. They’re buying a franchise to get wealthy, financial freedom, options, control, legacy, family business, whatever.

All those things aren’t things that franchisees teach. They don’t even really teach most of what franchisees go through on a day to day basis. And almost no franchisees teach franchisees how to own multi-units, which is weird because most of what we sell is big multi-unit deals. And it’s true. Most franchisees don’t focus on that yet. You wrote a book, multi-unit franchise mastery. So with that, sorry about my ramp, but this is really important. So please tell us about yourself and.

and let’s get going.

Aicha Bascaro (01:55.064)
Yeah, wow. Thank you, Dan. It was great meeting you too, because I’ve been following you also on LinkedIn, and we had chatted a little bit here and there, but never actually met. So it was great to finally meet you in person and very excited to always connect, you know, a person’s, you know, to their face, whoever you know. So for me, personal connection is so, so important. 30 years ago, I would have been still learning what I have to learn for me to be able to do what I do now and write the books that I wrote.

I was actually going around the world, helping master franchisees open the first unit of these global brands that I used to work for and learning everything that I needed to do about how to do everything the right way. So thank you for having me here today and allowing me to share my message with the world because you are exactly right. I have had 35 plus years in the industry. I started when I was 10, so don’t do the math now.

And I’m one of those rare individuals that has spent their career in very distinct areas. I would say that literally a decade, here and there I spent actual running operations. My first job was a pizza delivery driver. I became an assistant manager, a unit manager, went from the lowest volume store in Dallas to the highest volume store in Dallas, successfully became a training.

specialist and that’s when I went into the world helping master franchisees Open their first unit successfully and so I spent and I’d run Regions I was in the Atlanta region for a global brand overseeing over 60 units in three states I have actually run it for three different distinct brands, and I don’t know if you want me to mention the brands or not

dan rowe (03:41.591)

Aicha Bascaro (03:42.444)
So I spent Dominus Pizza was the director of operations for the Atlanta region overseeing Georgia, Alabama and Tennessee. I did that for almost three years. I run the company restaurants for Popeyes here in Georgia. The Popeyes and the Louisiana Kitchen casual dining test while he was still alive. And then I actually run operations for Georgia and Alabama for Olive Garden, garden restaurants. And it’s amazing, directly responsible for the stores.

dan rowe (04:06.126)

Aicha Bascaro (04:10.06)
And my last operator job, I would say, actually was running a brand, a small brand called Pretzelmaker. And after that, I was gonna venture it on my own. So a third of my career has been running operations, direct financial responsibility and team leading. Another third of my career has been actually working the headquarters, most of the time reporting directly to the chief operating officer of Domino’s, Pat Naughts at the time.

eventually Patrick Doyle who became the president of the company. And then I moved on to support services, also reporting to the COO Ralph Bauer, and then of course running a brand. So literally seeing the back of the house of how a franchise brand operates and understands their commitment to do great.

but also the challenges of not being able to get into the franchisees business. So I understand how that machine works. And the other, you know, third of my career has been in international. I lived in 14 countries. I speak three languages helping, like I mentioned, master franchisees, franchisors around the world, implement these global brands for the first time in their market. And that is such an amazing experience. And that was my third of my career. And so usually people just do one of them.

I’ve done all three and just been very lucky and loved every single moment of it. It came to a time in which I had to decide whether I was going to become a franchisee or a business owner or do something else. I literally had to hire a life coach to help me make that decision. And along the way, I started getting phone calls from franchisees, from brands I worked for before, asking me for advice. And it was interesting because what they were asking me for

was not the brand systems, product, service, image marketing. They were asking me about how to lead the people, how to control costs, how to do marketing, how to look at labor costs or food costs and where they were going wrong and financials and breakevens and all of these business acumen that they did not have. And that really all those relationships and questions and I became the accidental consultant, had me decide

Aicha Bascaro (06:30.456)
that I really had a certain skill set and experience on this business acumen that small business owners and franchisees needed to be successful. And it was much more critical when you multi-unit franchisee. And so one thing led to another and about eight years ago, I started what is called now the American Franchise Academy and all we do

is we focus on sharing knowledge, resources, files, forms, tools for business leaders, franchisees to be successful. And I’m so happy that I did it. We are filling a gap, like you said, that was needed. And we’re having a great time doing it. And really our purpose is to protect the American dream of business ownership through franchising. That’s what we do.

Franchiseurs do a great job at building these amazing brands that bring revenue, which is the oxygen of the business. And now we’re helping the franchisees build the systems to be able to turn that revenue into profit that then they can use to scale their organization and truly delegate operations by training their leaders and then have eventually the time freedom that they want and deserve. So that’s kind of what we do, and we love doing it every day.

dan rowe (07:49.514)
No, I liked when I read your book, I think people that are even thinking about buying a franchise should read your book first because I think it’s a little self-awareness about what kind of franchise is right for you. Or are you even right for franchising? What’s your personality like? What are the people going to be like that you’re going to keep versus the ones that you’re going to run off? So you had a lot of good stuff in there, but the irony too, what you’re saying is

You work for big companies, talk to big franchisees of big companies, and they still have these issues. So the franchise or doesn’t matter. It’s not an emerging or a mature brand thing. Most of these people are teaching you the function of the franchise, not the function of how to run the business. And nobody wants one unit franchisees, like not even franchisees. They all want to get 10, 20 units and build a company that they could sell some day. And so it’s got to run without them. Right. So, I mean, this is.

your tools help somebody build a successful franchise. The next goal is really, which is your multi-unit book is multi-unit masteries really get the business to the point where it grows without you almost better without you. And, and then if you go to sell your company, no one’s ever going to buy it. If, if you’re a tethered to it. So with that, but that, that’s, that’s great. So like, tell us more about why you started this and why you wrote the books. Like what are some of the, what are the some of the specific things in that gap?

people don’t realize franchisors don’t teach you.

Aicha Bascaro (09:12.92)
Yeah, you know, great question. So here at the Academy, we separate the franchise business into two very distinct parts. One of them is the franchise brand, sorry, the franchise systems. And what I mean by that, that’s the product, the service, the image, the marketing that the franchisor is providing. That is really what you are acquiring when you are acquiring the rights for a franchise brand. You know, just the product service image to duplicate that model.

to then open it for sales, to acquire revenue, right? To have a product service that customers are willing to give their money in exchange for that product or service. That’s one half of the franchise business. That’s how we define it. The other half is your business systems, which are the systems that you put in place to control your costs, to hire, inspire your team, to be able to scale your business and to increase revenue year over year. Those are what we call the business systems that not only turn the…

franchise revenue into profits, but also the ones that allow you to scale. That other half is what you, like you said, you don’t get for the franchise. Or is one of the things that I call one of the biggest secrets in the industry that when you buy a franchise, you do not get everything you need to be successful. You get a brand, which is amazing because how many individuals in the world actually have the skills and talent or the money to create a product that actually people

know where to get the resources for the vendors in the supply chain, where to get the graphic design artistic ability to create a logo, a brand and name the colors that actually look right. And then you have also the interior design skills to actually have a lobby or a dining room or a spa that actually attracts customers and keep, I mean, the amount of skills and abilities that you need to have to actually come up with a proven brand is tremendous, which is why so many businesses fail, you know, in the first year.

But a franchise source solved that problem. It saved you that time and effort and money. But now you have the other half, which is your responsibility, which is the business systems. Now you need to go and find how to turn that revenue into profit. You need to understand people, human beings, how to hire them, how to interview them, how to inspire them, how to promote them, how to discipline them, right?

Aicha Bascaro (11:32.504)
All that skills is something that you need to acquire somewhere because the franchise store is not giving you that information. And at the end of the day, no matter what business you’re in, you’re in the people business and you have to have those skills. And then of course, that’s only one part. And then you need to know how to control your costs. Like, what is, how to analyze and understand, you know, how labor costs works. How do you define a target? Because everybody’s target for labor is different. Now you need to be able to know and define what the labor target should be.

in the way that you are using the least amount of labor, but still providing good customer service, that’s an art, you know, and science. So you need to be able to do that. And then you need to be able to teach your people how to do it and then teach them how to get close to that target. And that’s, you know, and now we’re going into cost of goods just the same way. And then understanding financial. So many franchisees don’t even understand the profit and loss statements. They don’t understand variable costs and fixed costs, controllable costs, non-control.

I have not met one that has ever actually measured the break-even point. What is the break-even point of your unit and what does that mean and why is that important? I mean, all of these other business acumen knowledge that you have to have to truly have a successful franchise with confidence, you could be doing well if you have a great brand, but growing that business, you have to really know and understand it in great detail. And so…

dan rowe (12:45.634)
But think about it, because…

Aicha Bascaro (12:54.192)
And so that’s how we see the business, which is what I realized as more and more time came by in the last, like I said, seven and a half, eight years, our eighth anniversary in July. There is so much that franchises really need to learn. And many of them are successful in spite of not knowing these things. But imagine if everybody knew these things, this would be easy.

dan rowe (13:15.318)
Yeah. No, it’s like people think you make it up in volume or something. And it’s like, no, no. So, or I’m not successful. I need to raise my, my sales 10%. No, it’s usually cut, make it, I mean, make something more efficient or more effective or there’s other things. But I think a lot of it is people when they’re buying a franchise, they’re buying what they think is that paint by numbers checklist, everything’s going to be in there and it’s not the things about making, like I said, the burger or how you

wash the dog or do whatever that franchise is about. Like they teach you how to do that. But the other business stuff they don’t have. So what are, what are like, if you think back of all your new clients in the last two or three years, what are three pain points that they all seem to be dealing with and how do you help them with that?

Aicha Bascaro (14:01.496)
Yeah, and here is where we always say that one unit is a job, multiple units is an enterprise. The biggest issues that we have encountered is everybody are dreamers, they’re all dreamers, they all want to go multi-unit. They understand that multi-unit is the way to achieve true long-term success, but they don’t realize until they open the second unit, say when you have one unit, it’s a job. You’re there, you’re there all the time, most of the time.

And you know, you know your people, your people know you, you know, you know how to do things instinctively, maybe you have experience from the back from before. And then that allows you to do the work. But the moment that you open a second unit, now everything is doubled. And here is where you don’t really, you don’t really understand how literally the complexity of the business had truly doubled. And sometimes people push through and open two and three and four stores.

And that’s what I call the hell of two to four stores. Literally when you’re from two stores to four stores, literally like maybe six stores, it’s really is hell because you are just exponentially increasing the number of challenges that you have if you have not defined the systems to be able to properly delegate how to do the things in your organization. And so that’s really the biggest issues that it is that people grow because they believe and know that that’s the best way to

dan rowe (15:00.95)
The hardest part.

Aicha Bascaro (15:25.188)
achieve the time and financial freedom, but to get there, you had to have the systems. And that’s where a lot of people don’t have because nobody’s telling them. The franchise source not telling them, all they saying, hey, new location, new store, new team, let’s do it. And you’re committed to four or five stores, not understanding what that looks like. And you really will not know until you’re in the middle of it. And that’s when you realize something is missing. This makes no sense. How does other persons that have 20 stores do it, make it look so easy?

dan rowe (15:47.544)

Aicha Bascaro (15:52.636)
That’s because they’re missing those systems and processes and procedures that are not defined or worse yet not even documented, right?

dan rowe (16:00.19)
Yeah. But you notice the franchise or never misses the procedure about how to get them a royalty.

Aicha Bascaro (16:05.109)
Oh no, for sure. For sure.

dan rowe (16:07.594)
So, hey, so with like knowing what you know about this, because you’re not gonna be a successful franchisee, first of all, it starts with even getting the right franchisee. So in your opinion, what do you think it makes, what do you think it takes to become a successful franchisee? So like if you were vetting people, even before we start this whole journey, like what do you think the attributes are of someone who’s…

likely to become a very successful big franchisee.

Aicha Bascaro (16:38.92)
Okay, so I would say two different profiles. Right now I know that a lot of brands are focused on multi-unit, but there’s two different potential franchisees. One of them is that equity investors that are gonna get a big package and grow really fast, and they’re different from the franchisee that is in the market, not the area, and is gonna be very active in the business.

You know, the profile of that one is going to open one unit and then open two, three, that individual. I would say either one, both of them first and foremost need to care about people. Truly care about people. I actually had a, I actually had a, a call with a potential client one time. And he right out told me that he hates the people. He just doing it for the money. And I’m thinking, Oh my gosh, first of all, he could not become a client because we’re very careful with who we let in into our mastermind.

And second of all, he’s struggling and of course, and he will struggle forever because in this business, we still, no matter what, we’re still doing it through people. And we really have to be able to care about them. And if we care about them, we’ll make the right decisions to then eventually inspire them. And I would say that’s number one, you need to be able to get in know what it means that when you are becoming a franchisee, yes, you’re saying yes to becoming a business owner, yes, you’re saying to be part of a great network.

a franchisee, but you’re saying yes to being a mother, a father, a counselor, a mentor, a teacher to these employees because nowadays, not only are we hire them to work, you know, the job, but we hire them to even teach them how to be employees, you know? So I would say that is a big one. The next one is, you know, you need to know the business acumen. You need to be able to understand that this is a small business and they don’t need to know everything as if they have the ability to access the knowledge.

right, which is where the academy came from. But if the franchisor or the franchisee does not know resources like ours, like us, they need to have the business acumen. Because just because you have the money saved from a 25 year career in the corporate world, it does not mean that you know how to be successful with a small business. Managing a multimillion dollar budget does not equate to a small business planning for your annual financials. It just does not.

Aicha Bascaro (19:04.612)
And so having a business acumen is important. And I know franchisees are trying to achieve that, but not very many people have that business acumen. And so really you gotta go find a way to give them that or encourage them to find a way to get it. Again, I know that I wanna talk a little about the Academy, but the Academy is one of those sources that that’s what we work on, right? So those two things.

somebody that’s willing to learn, that has demonstrated a history of growth, personal growth and proactive, independent growth, someone that is used to being an employee only, because if that’s the case, when you’re a franchisee, you have to be self-driven. You need to be able to be very organized and be able to be proactive in the things and not just wait for somebody to solve the problem. There’s many franchisees that are used to being employees and they wanna sit in the franchise, waiting for the franchisor to solve the problems.

It really requires a lot of true entrepreneurial spirit to take on whatever challenges there are and look for answers. I think that how to make a pizza or a spa or a massage, you know, it’s teachable. It’s just those, you know, EQ against skills and understanding the business is what you gotta really look for, you know? If at least the potential of, and then look for resources that can help you develop the franchisees, yeah.

dan rowe (20:14.103)

dan rowe (20:28.354)
On this, on EQ, what are, what are three pain points that people come to you with? Like what, are there things that come up over and over that like, you know, you’re like, oh yeah, I just, I’ve had four other conversations and half of them were exactly about this.

Aicha Bascaro (20:42.504)
Hmm. Yeah. Sometimes, you know, this is a lot of this is about leadership lessons and skills, right? A lot of the times human beings want to be liked. We want to be liked. And we think that the way that we’re going to be liked is by being super nice, giving people what they want. And sometimes we’re doing that and damaging our business. It having, and I don’t want to say confrontation, but having difficult conversations with wives and husbands, partners.

managers, district managers, employees, literally having difficult conversations with people. I think that’s one of the very important and emotional skills that you need to have. And knowing that having those doesn’t mean that the people are not gonna like you. As a matter of fact, I am one to say that if you are strong, if you are fair, if you are objective and you’re able to communicate to the people the why of what you’re doing,

any conversation, no matter how difficult it is, is possible, especially because you know that you’re doing it for their benefit too. It’s not just for your benefit, you know, and that’s the thing that I think that is so important for people to, to know, uh, you know, that, that ability to have those conversations and have it land in a way that is still a positive conversation. I mean, I talked to people about, you know, when they don’t smell good, you know.

when their clothes are dirty, when they are not doing the things that they’re supposed to be doing, but then actually find out why that is, you know, and have them realize and acknowledge that really they are responsible. So that’s something that, that’s a skill that it takes time and really willingness to even learn it and understand psychologically, you know, and separate yourself from the people and the good that you’re doing. But I think that that’s one of the ways, one of the things.

dan rowe (22:37.334)
Hey, pretend you’re talking to franchisors right now, giving them advice. What are three things that they should teach that they’re not teaching now?

Aicha Bascaro (22:45.556)
Mmm. You know what? I would love to be able to tell these. Please franchise source if you’re listening to me to help franchisees. First of all, I will tell you, if you are a retail or food service business where cost of goods is your largest expense, which is true for most franchises that are, like I said, retail or food service, please give them the ability to know what the ideal and theoretical cost of goods are.

Please, because I’m teaching them that. That’s a franchise source system, please. And what I mean by that is you need to have not only the technology and the POS system to calculate your theoretical cost of goods every single day, an hour if possible, but then teach them what that means and then teach them about inventory and then the variance between the usage and the ideal cost and that and how to tackle that waste.

That is, I think by far, one of my biggest surprises. Now I come from very large, what I call legacy brands that had that. So when I started with Academy and started getting into a lot of other brands, at this point in time, we have serviced hundreds of brands then. I cannot tell you how shocked I am when a franchisee comes to me and I say, hey, you know, okay, you’re having issues with your cost of goods. What’s your ideal? What’s your actual? What’s the variance?

Don’t know, don’t know, don’t know. So that’s one. So definitely that. The second one is, I know that when it comes to labor cost, every model is different. And really labor cost is not only driven by the model, but also by the franchisees policies. Because a model might say one thing, but either franchisee decides that the minimum, I’m gonna go into the details now.

dan rowe (24:13.378)
They don’t know.

Aicha Bascaro (24:40.016)
But if the minimum shift, if the franchisee decides that their policy is that the minimum amount of hours they’re going to schedule employee is four hours, then you’re going to have more waste than if from a franchisee that the minimum amount of shift, length of shift is two hours because then you’ll have, you know, a lot less, a lot more waste if you have a larger minimum shift. So I know and understand the franchisee’s policies will affect the outcome of the labor cost. But if the franchisee’s SOAR could provide some guidance

on how many people to have and when and why, as a guidance so that the franchisee then can then interject their policies and being able to minimize the expense, reduce the waste, that would be great. Because a lot of people, again, they have no guidance as to what the labor model is. It’s funny because franchisee source do say, oh, food costs should be X% and labor costs should be X% based on what? Even as when it comes to cost of goods,

It varies by not only by business and by model, but even by store, even within the franchise. Product mix. Exactly. So, you know, so here they are giving them one blanket number, but maybe within my store, if I have four stores, one food cost should be 35%, another one 33, another one 29, because of the product mix, but then I’m giving my managers the same, the same target. And then for somebody is easy to make. And the other one will be impossible without cheating the customer.

dan rowe (25:44.938)
Or by product mix. Like what are you selling? Like it? Yeah.

dan rowe (25:59.884)

Aicha Bascaro (26:07.88)
So understanding those nuances of the business, you know, and I call those a franchise sore system because they should be able to give that guidance because a lot of it is based and starts with whatever the brand is. So those are the two things I would say. And the third, you know, I know that in discovery day, they do go a little bit over the financials, but really go through the line by line item of what they mean and what could they potentially negotiate with vendors or which ones they have the empowered to.

the empowerment to actually go and get better costings from what they’re showing, that will give them a little bit much better view of what their financials will look like and how they actually can control the outcome of the profitability. So really a lot of I would say it’s just that part.

dan rowe (26:50.816)

We’re gonna stay on financial. We’ll touch on each of these real quick, but, and also turnover, like franchisors don’t teach, like, not everyone you hire is staying. It’s like, how do you deal with a boom in franchise in the face of losing people? It’s like, it’s all something you have to teach, otherwise someone’s gonna crash their way through that. So back on the.

Aicha Bascaro (27:12.244)
I say, it’s a good point. You know, I actually, you know, sorry about that, but I actually don’t put that on the franchise door because that’s about the people. I mean, if they will talk about it, that would be amazing. But I really think the franchisee needs to know that, you know, I will say that the turnover is the largest hidden expense in any business, the largest, because it’s hidden in every single line item of your P and L and you’re not even looking at it, you have no clue, not measure, no metric, no goal, nothing. Yeah.

dan rowe (27:28.535)

Totally. Yeah, totally.

dan rowe (27:41.678)
Well, and then there’s another subject, like, you know, even if the wrong people stayed now, what, what’s that cost to your business, but back on the financial. So one thing that I noticed, and we make this for our brands and our franchisees, like I’m so surprised when a franchisee opens so many times, the franchisee, even if he’s busy his first month will still say, I’m out of money, I’m not making money, I’m bleeding cash. And it’s like, why, what, why do you say that? And they’re like, well, I have no money in my checking account. I’m like,

let me see your financials. And they like, I haven’t done my financials. It’s like, well then how do you know that you, how do you know you’re not losing, you know, the, you’re not, that you’re not making money. And they say, cause I’m out of money. Like I don’t have as much as I thought, even though I have a, so something’s wrong. They get into panic. They get into this downward spiral. It’s like, Oh my God. And it’s so avoidable for franchise or would just, and we help franchise or is with this. We said, separate your startup cost, your capex in a different thing.

in a different account, run your business, right? You got to run the P and L of your business. And so many times, like when a restaurant opens or any franchise opens, but especially a restaurant, the day it opens for the next month or two, you still have invoices. And so what’s happening is that, yeah, you might have a busy month, a busy month sales, but you’ve got to make payroll. And all of a sudden, a big general contractor bill came on a payroll week and you know, whatever. So one simple thing a franchisor can do is have their franchisee set up a

a capex account and track everything separately so that at least if your bank account feels broke or feels empty, at least you can reconcile why. But it’s important. And you think about psychology is everything your state of mind and your, you know, your sense of happiness. What I mean, what kind of reference are you giving if your lines out your door and you feel like you’re losing money? You’re like, Oh my God, I got my whole life savings into this business lines out the door and I’m still not making money. Like you totally misfired.

on an opportunity for that franchisee to give a completely different reference. And then, you know, so one is that you separate your capex from your operating like that. That’s at least a clearer way of painting a financial picture. Another thing that franchise or is don’t do, and it affects both food and labor is your, um, is, uh, your ramp up period, right? So like when you’re ramping up, they all say, Hey, your prime cost should be this. Well, that’s after your place has gotten mature.

dan rowe (30:04.65)
Right? Like that, that’s after you’ve gone through grand opening, you have to staff for the sales you want and you have to staff first. So if you want, if your systems are doing 20 grand a week in sales and you know, you opened up a busy location and you think you’re going to do 30 or 40, you can’t staff 20 grand. You have to staff 30 or 40. You have to be in, you know, otherwise you’re going to get a bunch of customers coming, having a terrible experience in leaving. And then you basically govern your sales at a certain level.

Two things franchise or is could do a lot better job of is, is just, just planning for the opening better, both with that CapEx and PNL. And then the other thing is they have to be able to tell a franchisee your food and labor costs your first 90 days are going to be whacked. Here’s why. Here’s what it’s going to look like. Here’s why, you know, you have to have extra people, you’re going to have turnover, you know, yada, yada.

And then you also have to have a plan in place to deal with the turnover. If you don’t have a plan to recruit while you’re busy, cause so many times these guys are barely hanging on and they don’t have time to go find new people. They don’t have time to go recruit. So I don’t know. Like you just spurt the spark, those, those two things in my mind. And then the turnover. Yeah. I mean, they, nobody teaches turnover as if as if every employee you hire staying and nobody trains people for that.

Aicha Bascaro (31:20.432)
Yeah, you know, it’s funny. A lot of franchisees use the financials basically to pay taxes, Dan. They don’t really use the financials as a way to really, as a dashboard, to see where you are, where the business is. And that’s absolutely critical. And they should actually, not only should they use it to analyze that, but they should have, when you first open a franchise, you should have a business plan, a 12-month business plan, which…

I assume they submitting that when they’re getting the franchise in the first place. Now what happens with that plan? Do they just throw out the window or is there any feedback in there as far as when the first months what it should be? I don’t really know about that. But if you have a financial plan, that’s something that we teach our franchisees. Every October we have our three day financial planning for the next year. And so they have a clear picture or if they meet that financial plan, where are they going to be by December of the next year?

and it’s a month to month plan so that they can actually month to month, look at where the plan was, look at the financial financials, compare those and see where the variances are and then move on to the next one. The same thing should be when you open any new unit. If you have a new unit, you should have a fully developed financial plan, especially if you have prior units where you can have a very accurate one. You know that at the beginning, you’re going to potentially start for more sales than you maybe that you get. Maybe you do get those sales.

But either way, your labor is going to be high. But if you have a financial plan that shows you what you did and why you did it, when you compare to actuals, they will tell you the story. It will calm your nerves because you say, Oh, what happened was that I stopped for 30 and I got 25. So turnover will happen. So people will leave. The better ones will stay and then we’ll continue. And then as we need, we’re going to hire more people, but you need to have that knowledge and understanding. And when you first open a new, your first franchise, you do not have that.

dan rowe (32:53.294)

Aicha Bascaro (33:12.308)
Uh, and the first unit, you definitely do not have that knowledge and information. And so a lot of scare, you know, stress overwhelm happens. I have some people that have reached out to me in that level. And, you know, sometimes they call me and they reach out to me when it’s too late, when they tell me I’m this much in debt, this much behind in the world. There’s nothing I can do that at that point. You know, it’s just so, so sad when that happens, but yeah.

dan rowe (33:32.062)

Yeah. You’re right about the financials and do you recommend people keep two sets? One, keep a set of financials so you don’t pay taxes. I got that. But then the other part is there needs to be a set of financials. If you ever do go sell your company, obviously you can’t show that set of financials, you need to show the upside. But even having that just for sanity check or something, just, I mean, nobody buys a franchise for a stack of contracts and

all the liabilities that comes with owning a franchise, they’re buying it, thinking they’re getting to a new place in life. And there’s just so many of these avoidable problems that freak people out and they never get there.

Aicha Bascaro (34:12.528)
Yeah, I don’t really, I don’t say that you should have two sets of financials. I say, you know, you should have the right one and put the right things in it. Um, you need to understand what it says, you know, like don’t have your account and do it like you have to do it when we do it, we do it with our clients. We, we step by step. This is what this means. This is what that means. You know, tell me about the history. Tell me about your first opening or your last opening. What happened? Oh, consider that might like really understanding.

the business at a very detailed level. And I know that it sounds like it’s a lot, but if you do that in the first, you know, a few, a couple of years of you being in business, by the time you’re 20, you have 20 units, it will be easy. But if you really spend the time to really understand anything that you don’t understand clearly so that you can explain it to somebody else, you need to learn it, understand it, see the history, see what happened, why it happened, dig deep.

Because once you get that level of knowledge and understanding, you’ll have it forever. And then you will not have the questions or the concerns because you will know what is happening and what to do about it. So I really think that that, and some people are just too busy. You know, it’s kind of like whenever, we have all these, we signed to a new platform and oh, here’s, I’ll sign this agreement for all the, what do you call it? All that big old 10 page long requirements. And you say, yeah, sure, I read it.

dan rowe (35:37.706)
Yeah, yeah, yeah.

Aicha Bascaro (35:38.384)
It’s like that. They don’t read the franchise agreement, and they don’t read their financials. It’s like, oh my God. So, yeah.

dan rowe (35:45.711)
Yeah. Hey, hey, where’s give us an example or two of where somebody was off track and you helped them get their business back on track. What are the things that are easy for you to work with them on to get them back on the track that they wanted to get on?

Aicha Bascaro (35:58.532)
Mm-hmm. So, we focus on the business management systems, right? Anything to manage the employees, to manage your revenue, to manage your financials, and to scale into multi-unit and build your leadership organization. So I’m not a financial advisor, so I don’t know, I cannot advise you that I’m not a banker, I’m not a lawyer, I’m not an HR specialist.

For that, you really need to go to experts on that. What we do is when people are in that two to five unit of hell and they don’t know how to bring this bear back and how to control it, that’s kind of what we help. So different ways. I had a client that joined us before he acquired seven units. He acquired them all in one chunk, but he actually looked for knowledge. He is a financial banker background.

He did grow up in a franchise with his family, actually making sandwiches, but he knew that all his parents allowed him to do was make sandwiches. They never gave him a view into the business side. And even though he went into financial and banking, and that’s how he saw how many franchises were successful, how he decided to actually, he did is acquire his parents seven unit brand.

franchise and so but before when he was in the process of doing that’s when he found me and said hey Aisha this is my background I know how to make sandwiches I know how to do the finances in the back I don’t that thing in between of the people and the structure and the training and all that don’t know anything about that and so that really is our sweet spot if you if you have one unit or about to acquire one or more and you want to know how to set the systems in place so that you can

define and document the processes and procedures and policies that you need to have in place so that you can train your people and delegate operations so that you can go into multi-unit and scale. That’s what we do the best. So here’s an example. Within two years, he went from zero to I think 20 now, 22. And he was able to do it that fast because he properly implemented all those policies, processes and procedures in place.

dan rowe (38:07.021)

Aicha Bascaro (38:15.328)
into an organization that already existed. So he had to even change the culture and roll all these things out and change the way things were going. And it worked out so well that he’s at 20 and looking for more, his goal is 100 now. Now we have a different franchisee that had also multiple units. I think he had like eight, smaller brand. He was having challenges with it. And when he joined us, we taught him about the systems process that he found out.

dan rowe (38:29.165)

Aicha Bascaro (38:45.028)
you know, where the issues were and why they were where they were. And he realized that he was not with the brand that he was going to be able to scale. And so he implemented systems, clean it up, you know, create structure and eventually sold that brand and went on to move on and do other things. And so, you know, like that, we have, like I said, tons and tons of stories. And our the usual is, you know, franchisees, like I mentioned, that are one thing to grow or animal or growth.

and they can’t sleep, they don’t have vacations, they cannot leave, they are being buried in phone calls because they don’t have those systems in place. That’s what we help them with, yeah.

dan rowe (39:25.262)
So they’ve got to be able to take a step backwards to get several forward. And, you know, yeah. So to summarize franchise or should acknowledge that the hardest part for a franchisee is, is going from two to four from, I guess, one to, you know, five or six until you’ve got that multi-unit team and S and that your business is working off of systems, off of systems. And so most don’t.

Aicha Bascaro (39:48.944)
Yeah, we usually say the first district manager area. Like in how many units, it depends on the volume and the cashflow of the business that is able, when are you able to hire that district manager? So really from one unit to the first district manager, that’s the hard work right there.

dan rowe (40:00.759)

dan rowe (40:08.886)
But like a French, if a franchisee, if he can’t leave for she here, she can’t leave for a month and go on an amazing vacation, take their family on a vacation. If they can’t do that because they’re worried their business will crumble. They don’t have a business. They have a job. Yeah. They bought a job. So.

Aicha Bascaro (40:24.761)
Exactly. And I think that would be a great measure. Have you gone on vacation in the last year? The answer is no, then you need systems, basically. That’s it.

dan rowe (40:35.07)
Yeah. Okay. Yeah, that that’s good. This is helpful. So and so you have 300 plus videos. Is that what you’re saying? You’ve got 300 videos and anecdotes and tips and tricks. How do people

Aicha Bascaro (40:46.808)
Yeah, yeah, many. Yeah, a few years, a couple of two or three years back, I started a YouTube channel where I started to share, you know, tips and, you know, best practices for franchisees. Like I said, our focus is the franchisee. And there’s so many people that are focused on helping franchisees in all kinds of ways. And we made a conscious effort of conscious choice to help franchisees. And so you’re going to go to our YouTube channel, the American Francis Academy.

And you’re going to see lots and lots of videos really guiding franchisees on how to become, you know, top performing multi-unit franchisees. And yeah, so that’s how, how we do. And we have also another playlist where we have actually what we call the franchise wisdom, where we have interviewed several franchisees that have been successful at becoming a multi-unit, you know, franchise. And some of them are retired. Some of them are doing it right now.

dan rowe (41:39.094)
Yes, success leaves clues. Like, I don’t know why if I were buying a franchise, the first thing I’d want to know are who the most successful franchisees and like, what can I learn from them? So there’s so much info out there. Yeah. But there’s so many of them out there. I find that they’re great. Like I’ve approached huge, several hundred unit, one franchisee with over a thousand units, they’re, they’re kind, they’re nice. They understand what you’re going through. And I find people in this community give you advice. They’ll give it if you ask for it. So.

Aicha Bascaro (41:49.519)
Make him your best friend.

Aicha Bascaro (42:07.856)
Yeah, they all want to help. They just don’t have enough time to give it to them in a structured way like we do. But absolutely all franchisees, everybody, if they can help, they will help. I have not met one that was not willing to have a conversation with you and answer a question or two for sure.

dan rowe (42:08.322)
That’s great.

dan rowe (42:25.538)
Yeah. So on your other book, the multi-unit franchise master, I’m going to order that next. What is one or two good lessons someone learns from that? What’s, what’s one or two good things that they can pick up to get through that purgatory of two to four stores.

Aicha Bascaro (42:40.048)
Yeah, great question. In that book, I actually show the progression on when you should be adding to your infrastructure. Okay? In that book, it really talks about the view of a multi-organization and how you have the operations and how you have your admin, and then you have your district manager responsibilities. And it talks about when do you start adding,

internal employees versus external employees and how to scale the organization and what to what’s whose responsibility to do what because I think that’s one of the questions I had a call with today with the franchisee and said look you know they were already at nine stores they said well you need to hire district managers and we don’t even know what the district manager does and I said yeah so that’s you know and it’s true that is um because they’re so they’re not that even though there are a lot of them but they’re not so many that the franchise or

can even because a joint employer develop a training program for district managers anyways. So that’s what the book does. It really gives you a pretty good perspective of what is the role of the owner and the overhead and office support and support team and the district manager in relations to each other. So that gives you the picture of, okay, this is what it should look like and yet maybe at the beginning I’m doing everything but then as I’m growing then I can add this

Aicha Bascaro (44:06.212)
And only once I get to a certain number of stores, would I bring them internally? Like literally, how do you take those steps to grow and understand that that’s the journey, right? Because when you know where you’re going, it’s easier to accept where you are right now and do the hard work because you know that there is a light at the end of the tunnel where you’re going to be. But a lot of people don’t even know where that end of the tunnel light looks like, you know? And so that’s what that book I think does for people that are or want to become multi-unit.

dan rowe (44:30.763)

dan rowe (44:35.778)
Well, I remember when I met you, I told you, I think franchise or should hire you. And you said, no, our customers are franchisees. And I not to argue with you, I think franchise or should hire you because you’re like this middleware because most people that work for franchise or is most of the people supporting franchisees. They don’t know what you know. Right? So like the people that are the area rep, the franchise support reps, whatever you call them, franchise business consultants, they don’t have your background. So they can only give superficial.

advice and insight to their franchisees. So yeah, no, this is great, but wow.

Aicha Bascaro (45:08.456)
Well, I would tell you that franchise stores have actually looked for me. And, and obviously I don’t, don’t not talk to them. Obviously I want to help everybody and helping. We are franchisee advocates, franchise source supporters. I love franchise source, but because of them, the American dream of business ownership through franchising is possible. So, Hey, love you guys, ladies. Um, I have a couple of them approach me and I have actually a couple of them that.

any of their franchisees that want to go multi-unit, they’re required to go through our mastermind program because they have had failures in the past and they wanted to avoid that. I say, hey, they found me, we have a conversation, we told them what we do and they say, you know what? Anybody wants to say they wanna be multi-unit, they’re gonna have to go through your program. Other franchisors do reach out and we do training. Sometimes we go do presentations for the conferences and things like that. So I do support franchisors for sure.

dan rowe (45:41.61)
Yeah, good.

Aicha Bascaro (46:05.4)
We’re focused on reaching out to franchisees, but if any franchisor out there would like to have a conversation and how we can help them, I’ll be happy to.

dan rowe (46:16.452)
Thank you very much. Thank you. Thanks for coming on. You were awesome. Appreciate you pitching in and we will stay in touch. Look forward to seeing you again. Thanks. Thanks for doing this.

Aicha Bascaro (46:24.612)
All right. Thank you, Dan. Thank you. See you in the other conference. Bye.

dan rowe (46:28.467)
Okay, bye bye.

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