Franchise QB

Episode 44: Rogelio Martinez-President and Founder of FranFast

• Mike Halpern • Season 1 • Episode 44

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Summary

Rogelio discusses the evolution of the franchising sector and the need for specialized segments within the industry. He shares his journey in franchising and the inspiration behind creating FranFast, a franchise management suite. 

Takeaways

FranFast offers four pillars of franchise success: franchise development, new store opening tracker, franchise compliance tracker, and franchisee communities.

Emerging franchisors should build departments and teams based on benchmarks and points of reference to ensure scalability and success.

Potential franchisees should consider their long-term goals and choose a franchise that aligns with their passion and vision for the future.

Chapters

00:00 Introduction
04:12 The Evolution of the Franchising Sector
06:35 The Four Pillars of Franchise Success
25:05 Advice for Emerging Franchisors
27:56 Choosing the Right Franchise for Your Future
31:26 Conclusion

https://franfast.io/

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Mike Halpern, CAFC
mike@franchiseqb.com

This is the Franchise QB Podcast, where we empower entrepreneurs to win big in franchising. We huddle up weekly to educate our audience about the most successful small business model ever created. Franchise it! Welcome to the Franchise QB podcast. I'm your host, Mike Halpern, a 20-year industry veteran and entrepreneur. My mission is for listeners to achieve their American dreams of creating wealth and independence through franchise ownership. Every week we speak with franchisees, franchisors or vendors that support the industry. Thank you for joining us and let's get started. Joining us in the huddle today is Rogelio Martinez, president and founder of Fast Cloud Consulting. the makers of FranFast, a complete franchise management suite built on the Salesforce platform. Welcome to the show, Rogelio. Thank you, Mike. Great being here today with you. Great. It's great to have you here. Thanks for joining me. So I'm going to talk you up a little bit about your background and then we'll kind of jump into the brand. You've established yourself over 20 years as a prominent figure in the franchise and technology industries. This is really interesting. Previously, you held the position of President at Berlitz, which is a language education and leadership training company and possibly the oldest operating franchise or in the market today. They were founded back in Providence, Rhode Island in 1878 and awarded its first franchise in 1889. You don't hear years and dates like that very often. So your strategic leadership and vision significantly contributed to the company's global presence and success. And you told me earlier they're headquartered in Princeton, which is kind of near and dear to me because I'm from Bucks County, PA. Spent a lot of time there in my formative years. And then this is really interesting about you. You were inspired by a book you read, Tim Ferris' The Four Hour Workweek, and you made a life-changing decision to relocate from Toronto to Costa Rica, where you are today as we speak, embracing a new lifestyle while continuing to drive innovation and growth in technology and franchising. In addition to that, you've been an IFA, International Franchise Association board member for over 11 years. So welcome to the show and tell us a little bit about how you got started in franchising 20 years ago or so. Sounds good Mike. I want to go back to when I was 12 very quickly. I had a cousin that used to travel the world and speak multiple languages and he would tell me all these fascinating stories. So... When I was growing up, I wanted to be in international business. So moving a few years after, I was just graduating from an MBA program at HEC, University of Montreal. And right after graduation, moved to Toronto. And I found a job opportunity to collaborate with an emerging franchise work that was a technology related franchise. So I was offered the possibility to help with the global franchise development. And all my dreams from when I was 12 and going around the world in multiple languages, I saw materializing the opportunity to build that dream. So I took the job. This company was founded by Dan Monaghan, a very prominent figure in the franchise and industry. I believe he's the president of the IFA Foundation right now. And it was an incredible ride. We became the fourth fastest growing franchise in the world. We were opening about 60 units a month. We did over a hundred countries and I had the possibility to open franchises all over, like New Zealand, Singapore, Nigeria, Chile. That was an incredible experience, not only from the business perspective, but legal, tax, accounting rules. It gave me a very solid foundation to continue a career in franchise. Yeah, that's really unusual because a lot of the guests I have on the show don't have that exposure in terms of international presence. mean, that's a lot of countries and each country has different laws, different franchising approach and all that. So it's really interesting that you cut your teeth in the international space. So thank you for sharing that with us. So what have you seen over the past couple of decades? How have you seen the franchising sector evolve? When I started in franchising, the segments were were very broad. For example, senior care in the past was, you know, probably one or two segments in senior care franchises. Now there are so many specializations and that's happening within many segments in food, in hotels, car rentals. Now we have the luxury ones, the economy ones, the middle of the pack. So I think specialization within segments has been key in building new opportunities for entrepreneurs, not only the franchise or entrepreneurs, but the entrepreneurs that believe in a given market or business model and join an established brand with a proven track record in what they are building. So that's what I have been seeing a lot of specialization, a lot of news segments, a lot of boutique segments, and a lot of people are doing some incredible things and sometimes finding opportunities that are already in the market. but no one is serving or sometimes just building new markets. It has been fascinating these last two decades. Yeah, that's a really interesting observation. brings me back to you and I started our careers in franchising around the same time. And in the early 2000s, I remember the first Chipotle that opened up in our area in Alexandria, Virginia. And back then it was like Taco Bell was like the fast food in the Mexican space. And then Chipotle came along and kind of changed the game. And then there's been a whole lot of other. you know, brands that have evolved and come out to kind of fill those different niches, you know, all the way from fast food to fine dining. So that makes a lot of sense how, you know, you've seen all these different kind of iterations form and then franchise out over the past couple of decades. So let's, let's talk about the, the company that you operate and own as president, FranFast. So what is FranFast and why did you decide to build the FranFast model? Yeah. So. In 2016, around 16, 15 years of leading franchise networks around the world, I became frustrated with the technology available for franchise source to unify our operations and franchise source has. So typically a regular franchise source has about 14 different software to try to put together their networks. Because in franchising, franchising is not really an industry. It's a delivery, it's a distribution channel for the concept like hotels, car rentals, senior care, food. That's the industry, know, food industry, hotel industry. And franchising is how you bring the product and service to the market. So all these technology companies like the Oracles, SAPs of the world, Microsoft, et cetera. they don't see businesses as a franchise business. They see businesses as a food business, as a hotel, a rental. So they don't think on business cases or franchising. And that creates an incredible fragmentation of solutions. You have the territory solution, the inspection solution, the sales solution, et cetera. But a suite that would put everything together, there were one or two. But I was frustrated because business models like the ones I run had to adapt to those one or two that were available in the market because the bigger ones like the oracles of the world, they didn't really have anything. I had to patch a lot of solutions. So one day I just said, you know, that's it. I'm just going to build something that will make sense for franchise companies and that could be flexible and scalable enough so franchise source don't need to adapt to the technology, but the technology can fully adapt and the business models of franchisors and franchises. And that's how in 2016 I left Berlitz and started developing FranFast. Of course, it was a big challenge because I'm not an engineer. in business. I studied business and finance. So I had to study a lot, full time for several months until I started hiring more smarter people than me. And we created the first iteration of FranFast in 2017. Today we just count with incredible clients, many public companies, some of the largest brands around the world, 4 ,000 units, 6 ,000 units in franchise under their name words, as well as some very small, like probably the first two or just launching the first franchise. We created something that can definitely support emerging of franchise 500 franchises. Yeah, I appreciate that. And before we go into the four pillars to better understand the specifics of the offering, it sounds like your product is adaptable for, like you said, emerging brands, mid -market brands, legacy or enterprise concepts. So I'm sure there's different pricing structure and access to the system based on how large they are. Is that accurate? That is correct. Yeah, it scales with the number of users and the size of the business. Super. So let's kind of get into it in terms of the four pillars. So you have a franchise development manager, which is kind of the world I live in, which is helping to navigate the right people into the brand and figure out if they're the right fit. And that's usually a 60 to 90 day process, or take. Then you have a new store opening tracker, which obviously oversees that project, kind of a project management tool, franchise compliance tracker. So you can see who within the system is operating within the rules and is in compliance and in good standing with the franchise system. And then this is a really interesting piece is franchisee communities, because I think that's such a valuable piece that gets lost sometimes. It's not just the support coming down from the franchisor, but it's the ability to network with other like -minded owners around the country, which is really where the secret sauce is in franchising. So can you touch on those four pillars for us and kind of explain? how a franchisor kind of leverages those tools to kind of make their business better? For sure. Yeah. The four pillars you described, I call them the four pillars of franchise success to build the vision of the connected franchise work in short. in franchise and those four areas are the ones that as industry veteran franchising, that's how I saw we could make sense in integrating a pool franchise network in different functional areas. So franchise development for us, it is very important to standardize our recruitment and selection process. Something that is not standard cannot be managed. So if we have a team in franchise development, we can see what's working and what's not because everybody's following the same process. Then we can better coach franchise development people on where we see that the conversions are lower than the rest or where they are getting stopped. So for coaching and... efficiencies, it is very important to standardize. Something that I really like about the process is that we integrate with DocuSign. So CFD disclosure process, it's completed in a breeze and many of our clients bring a lot of speed. One of the success stories we have focused on this pillar is Dave Scott Chicken, which became the number one fast cash return to growth. And the VP of French Development, Shannon, a very good friend, once sent me a note that said something like, In the last four years, thanks to FryFast, we have developed over 950 restaurant commitments. So that was incredible. that's had a lot of satisfaction to see what we're supporting. Thanks for sharing that with us. That's really interesting. And that's really, you know, what I've done in my career is working with different systems to kind of make sure I can communicate effectively with the right people that are truly invested in educating themselves about the brand. So having that system, I mean, you and I remember back you know, 15, 20 years ago when the FTD was the UFOC and we had to print it out and FedEx it and get the receipt faxed back and all that. So those days are gone and the technology that you guys are utilizing with DocuSign is, it's great. I mean, it's, it expedites the process and it gets people to be in business quicker. That's great. Yeah. So let's talk a little bit about the next phase. So tell us a little bit about the store opening tracker. Yeah. I think this part is where we can see the most win for clients building their networks. The onboarding and development process of centers that haven't really been sold, either vans or kiosks or standalone locations or home -based locations, we have a process. And this is where most people go all over the place and don't are not very efficient because times and tasks and dependencies are not clear for the three main stakeholders here, which is the team at Franchiseur, Home Office, Franchisees, and vendors or contractors that they need to interact. The typical Franchiseur has an Excel spreadsheet and keeps calling the contractor and franchisee, have you completed this? Have you done this? Have you completed this? And it's all over the place. So what we did is a collaborative environment where everybody knows when and who has to complete what. At any given point, everything is updated in real time. One of our big clients on this is one of the fitness networks. When we started working with them, they had over 1 ,000 gyms in development schedule that need to be built. Can you imagine having 1 ,000 lines in an Excel trying to figure out what you need to do next? That would be quite cumbersome. Exactly. So after we implemented this, it was night and day for them. So another of our incredible successes stories with this fitness network. Yeah, there's a lot of people that are kind of working together and I can see the inefficiencies of having, you know, the spreadsheets and the phone calls. That doesn't sound all that attractive. So the fact that you kind of streamline that in one place is really useful for franchisees and franchisees and vendors. So let's talk a little bit about the franchise compliance tracker. Once franchises open the doors, some franchisers don't have a formal process to do the hand holding potentially within the first year and then recurrent review and coaching with their franchises. Some franchisers wait for the franchisee to call, hey, I need help. But we want to be more proactive. We want our clients to be more proactive. so they can set bases for success. Instead of waiting for something to go wrong, anticipate potential pitfalls and be there for the franchisee so the entire network achieves a higher level of success. This is, for example, when someone is launching, having like the weekly review, the three-month review, the semester review, the yearly review, not only to see if they are doing what they are supposed to do on the day -to -day, like, they using the uniforms? they using the new sign outside? Not only the day -to -day, but the strategic part. Have they hired their PPC and SEO marketing agency? Have they posted in social media the minimum of 10 posts a week or a month? All these minimum standards to achieve success. A lot of home -based businesses, they need to do a lot of guerrilla marketing. like the table fairs, like going outside the local Walmart, know, some established franchise networks with B2B, like have you done your 10 call a day, B2B call calling or whatever they need to do. So it's not just about, did you sell this amount this month? It's like, okay, did you sell this amount? But did you also do your posting? Did you do your calls? Did you do your meetings? Like do reverse engineering? so they can achieve the goal at the end of the month and at the end of the year. So with the operations and compliance tracker, we help making sure no one drops the bill. So if there is a deficiency on one side, maybe the support team didn't do something on the franchisor side of the franchisee as deficiencies in doing the flyer or hiring the local marketing, whatever it might be, is there some type of like... How are they notified? Is it like you're falling behind and you get a notification? How does it work in terms of the actual interaction with the product? Yeah. So we have automatic tests and alerts, for example. if the system, and this is of course every franchise or tell us exactly what they want, but let's say if the system detects that there is no phone call or email with a franchisee to bring them to my neglected franchisees, for example. So I know, okay, I have three franchises I haven't touched base with them in the last three months. Or it could be, okay, you have a lease renewal coming up in six months, then franchisee gets the alert, franchiseor gets the alert, they shop around for a new lease, potential lease, you know, with better conditions, or they start working on the renewal with enough time, because we don't want like one week before expiration, starting negotiating with the landlord, right? So very proactive in terms of alerts and tasks that get automatically set. The alerts can come with email, or we also have the option of having alerts by SMS. And also the transactions, we integrate with Stripe or ACH, create card transactions. So the accounting department doesn't need to be collecting anymore. Like, you send the check? Did you send the check? It's more like all automatic. We create an incredible amount of efficiencies by eliminating manual operations. Awesome, very cool. Thanks for the examples. So let's talk a little bit about the one that gets me most excited, which is franchisee communities, because there's a lot of different softwares out there people can join. I'm really curious how this works within your platform and how you rolled this out. So tell us a little bit about how the franchisee communities pillar works within the FranFest model. I guess what motivated me the most to build the fourth pillar was the couple of stories we have from McDonald's. One is that the Happy Meal was an invention of a Guatemala franchisee of McDonald's, and the Big Mac was also an invention of another franchisee. And by the way, just a side note, as you mentioned, I'm in Costa Rica. In Costa Rica, I believe it was in the 70s, was the very first McDonald's franchise out of North America. So, wow, didn't know that. Interesting. Is it still operating to this day by chance? About... Eight years ago was re -grounded to KFC. So when I was still at McDonald's, there was a plate outside. Once we did a franchise trade mission with the IFA, lot of people came to Costa Rica and we went to visit the site. So that was pretty cool. Yeah, really neat. Thanks for sharing that with us. Very cool. So given that franchises bring an incredible amount of value, experiences from other places, very talented individuals joining these networks with the dream of becoming, you know, a successful and achieve their financial freedom, we want to capitalize from all this talent of those hundreds, thousands of people joining networks. So we believe that collaboration between franchisee and franchisor in an open environment or segmented environment, it is healthy and important. So with this franchisee community, we encourage building, for example, collaboration groups, the marketing beta group, the franchisee advisory council, where they can collaborate. share best business practices, pictures from their windows, how they are displaying products, how they are marketing new solutions in the businesses. So we have the file and resources collaboration, the knowledge base, the collaboration groups, like discussions, very similar to what you would be very used to seeing in social media with the likes and with the follow ups and hashtags. So it's very vibrant, very collaborative. And franchisees can also create collaboration groups that are limited to only franchisees hosting announcements. So there are some franchisees that are bit more demanding on how communication gets disseminated in the network. So we can have like with moderators, franchisees only, selected franchisees only, like the FAC, Franchisee Advisory Council. But at the end of the day, it's one place where franchisees can find, request, and look for whatever they are looking for to run their business most successfully. Yeah, I know I love that. And it's something that you answered my question. I was going to ask if the franchisors generally moderate or participate, because some of the key feedback is going to be really useful for them to modify systems or procedures or take new ideas and test them out before they're rolled out throughout the system. And I'm a licensee of Franserve, not a franchise, but you know, licensing agreement and we have cohort groups where we get together weekly and every other week to share key learnings. And one of those groups is just independent. It's a few consultants that kind of hold each other accountable for their business and help each other. And then I have another group that we call a power team. And that's when it's the, the, the, the network has someone that participates. and then takes those key learnings back to the company to make it better. So it's kind of neat that I participate in two different cohort groups. One's kind of monitored, one's not, but they're both very effective for me to grow my business and learn about different brands and learn about different techniques and technologies. And I love that. The fact that, you know, and a lot of the candidates I work with, that's what they're doing in validation. You know, they're talking to some of the top performers or performers in the system. And then beyond that, when they decide to join the system, it's good for them to have that outlet where they can say, hey, I'm having a problem with this. Help me. And the fact that a franchise or kind of encourages that usually leads to better success system -wide. So thanks for sharing those four pillars with us. So, you know, you've been there since day one. What is your favorite feature that FrameFast offers? I think it is the we start to build our development schedules. That's difficult to manage and we have a guided process like okay name of franchisee a term How many units per term? Yeah back like like everything is All created so franchise source can better track the the openings by commitment and something very important is that a lot of people don't realize this sometimes franchisee by like I want to buy five territories that I need to open within five years some often forget that if you don't open in the year you are supposed to open, you are in default and you can actually be terminated by as per franchise agreements. Some franchisers may do, you know, some great spirit, okay, no worries, you will, you know, build the one you're behind next year, but they have the right to terminate. So it is very important for franchisees to track their commitments as well as franchisees who are supporting the opening of those commitments with franchisees. So this development schedule we certainly have allows for the right alerts and the right dependencies to be built so franchises are always in good standard. And it's very easy to use. And this, again, was inspired by this fitness network that was struggling big time with all the openings they had in development schedules managed by Excel. Very cool. Thanks for sharing that with us. So, I mean, you've obviously been in the industry a long time. What advice do you have for the emerging franchisors? I know that probably makes up a pretty good piece of your inventory of clients. What would you say for emerging franchisors? Any advice for them? Yes, definitely. I would advise that they always build departments, functional areas, using benchmarks and points of reference. For example, in the industry, If you are building a support department for your franchises, roughly you need between one support person for every 12 to 20 franchises. So depending on the industry, it might be 20, might be 12. But even if you have one person built on where you are supposed to be scaling, because you don't want to over saturate one person because you didn't plan in advance when you were supposed to get the second person. and the third person in the team. Semi -franchise development. If you are developing new franchises and working with candidates in Excel or in your inbox, you probably won't be able to manage more than 18 to 20 candidates that are all active in your pipeline. Then if you get a good CRM, you are probably going to be able to manage between 28 to 40 franchise candidates. So if you, let's say you have a good CRM and you are in one branch development person for every 30 candidates, well, once you start seeing that your guy already has 35, 40 in the pipeline on an active basis in the last three months, don't wait anymore because you are going to be losing a lot of potential great franchisees in your network just because you are not scaling at the right time. So think about the benchmarks on where you are. supposed to be scaling and bringing the second person, the third person. And then once you have about 12 people reporting to the head in the franchise, emerging franchise or size, is less than 20 units, what you have, well, emerging franchise or might be, I consider between 20 to 60. Of course, there are some like starting zero to 20 and 20 to 60 is very critical. Because that's when you are going to start getting about 12 people reporting to the head. Then you need to throw the next layer of management. Now you need the VP of franchise development with one or two people underneath. You need the VP of support with one or two support agents underneath. That's between 20 to 60 units. You need to think about the next layer and so on. So that's my advice. Yeah, that's really good advice. You know, for both the kind of support side, which is so critical, especially in emerging brand, as well as development, like invest heavy and having the right ratios, having the right amount of support and sometimes over invest in those things so that, you know, if there's an issue, it's going to fall on the side of we have, you know, a big payroll because we're overdoing it in terms of supporting our development efforts and we're overdoing it, supporting our owners because it's a lot better than the opposite happening because, you know, foundation, especially when they're emerging, the brand will crumble if it doesn't have a great core group of early owners that are just really familiar with how the system works, that they're getting properly supported, etc. So what about the other side of this? People that are listening to us now that are looking to get into the right franchise, what advice would you have for them? Mike, about three weeks ago I had the privilege to attend the France Air Convention in Orlando. And that's where you and I met. Incredible event. let me tell you something. When I was in franchise development, more focused, like let's say I was in franchise development very heavily, both until around 2016. Then I became president of a network. So I was less involved in all the franchise consulting networks. France was pretty much a start. It was small, really, like 2012, 13. It was not really in my radar as some back in the day. I was blown away three weeks ago. I just couldn't believe the incredible talent that Transerve has today and the brands that have joined the inventory as options for franchise candidates. So I think that for people that want to become financially independent and with pride of ownership, I would just suggest that reach out to the mind palpurnce of the world at Transerve. They have an incredible inventory. They are such professional people with the right methodology to help us find the right business model. Now there are two things. Some people say, okay, where am I going to make the most money? And then, you know, there are several options. But when, where am I going to make the money? And I'm going to be passionate about opening my doors every day. Because if I want to make money, probably I can just as by a sandwich franchise. Nothing got grown with sandwich franchises, but I'm not passionate about what is related to a sandwich franchise. I can make money, but I can potentially buy a business coaching franchise. I'm probably going to be incredibly excited helping those entrepreneurs building their businesses because I'm already passionate about that. it's not only the money, the most important. Of course it's important, but it's not the only part. It's where you are going to get the fuel to be excited, to keep going and achieve your success, achieve your dream that initially led you to build your own business. That's my advice. That's great advice and thank you for the compliment and yeah, it makes perfect sense. This has been really educational. I really appreciate you taking the time, Roelio, to kind of walk us through the model, share a lot of your insights with your 20 -plus year franchising career. Anything else that you'd like to add to the mix before we wrap up today? Think about what direction you want your life to take in the next five to 10 years. And whatever you decide today, just make sure that it's aligned to that vision for the next five to 10 years. So you can make it longer, make it longer. But at least five to 10 years, just make sure your decisions are aligned to the vision for your life. That's my final. That's good advice and it's good advice for both franchisors and candidates exploring franchise ownership. if anyone listening would like to connect with Rogelio to discuss FranFast, contact me at FranchiseQB.com or on Twitter @QBfranchiseQB. I'll get you connected with him and his team. Thank you Rogelio so much for taking the time to get in the huddle and speak with us today about FranFast. Thank you for the invite Mike. Talk to you soon. Thank you for listening to the Franchise QB podcast where you're at the helm of your future as a franchise owner. If you enjoyed the content, please rate the show and recommend it to anyone that might be interested in franchising. Make sure to visit FranchiseQB.com to subscribe to my newsletter and for an actionable playbook to go from walk -on to legend in your new business. Follow us on Twitter @QBfranchiseQB and join us every week for a new episode. See you next time. Visit FranchiseQB.com. take the next step of your journey towards wealth, independence, and franchise ownership. And remember, when working for the man gets old, you must do something bold. Thank you for listening.