Leadership, Stoicism, and Franchising | Michael O'Driscoll | On The Homefront

BRIEF SUMMARY
In this episode of The Homefront, Jeff Dudan welcomes back Michael O’Driscoll, President of Franchising and COO at Homefront Brands. A globally respected leader with nearly four decades in franchising, Michael dives deep into what makes a great franchise system—from the foundational elements of a healthy brand to the realities of scaling and the critical role of leadership. Whether you're an emerging franchisor or an aspiring franchisee, this episode is packed with no-nonsense insight and strategic guidance.
KEY TAKEAWAYS
- Franchising is a business model, not an industry. It spans nearly every sector, making standardized definitions of “success” highly contextual.
- Great franchises start with great assets. The underlying business must be sound, replicable, and unique before it can be franchised effectively.
- Emerging brands offer upside—with risk. Joining early can yield outsized returns, but only for those who understand the trade-offs and can weather development.
- Start well, go well. The first 120 days can shape a franchisee’s entire journey. Franchisors must invest in onboarding and early momentum.
- Human-centered design matters. Franchisees should be at the core of system design, training, decision-making, and feedback loops.
- Scale happens—or doesn’t—based on leadership. Systems collapse around years 4–6 if foundational investments in people, tech, and culture were skipped.
- Franchise success = mindset + resilience. The ultimate predictor of success isn’t the system—it’s the people and their character, discipline, and accountability.
FEATURED QUOTE
“Don’t die wondering. Face the fear and have a go. Regret is a very destructive thing—and I don’t want to live with it.”
TRANSCRIPT
Global Franchise Wisdom: Meet Michael O'Driscoll of Homefront Brands
Jeff Dudan (00:01.038)
Hello everybody. Welcome back to the Homefront. I am Jeff Duden, your host. And today, Michael O'Driscoll, President of Franchising and Chief Operating Officer of Homefront Brands, but really one of the most storied and respected people in the franchise industry today, franchising all over the world. Welcome Michael.
Michael ODriscoll (00:22.199)
Thanks, Jeff. Good to be here again.
Jeff Dudan (00:23.986)
Yes, absolutely. So for listeners who have been with us for a while, Michael Odrisko and I did a show. It's one of the early shows. If you want to go back and reference it, some incredible life lessons, stoicism, philosophies, and really just an incredible journey. So we'll point you back there to listen to that if you want to go deep into kind of how Michael thinks about the world and our place in it.
Today we're going to talk a lot about franchising specifically, but for the people without giving people homework to go back, Michael, tell us just a little bit about you and your background.
Michael ODriscoll (01:00.087)
Sure, no, that's happy to do that. So I've been in franchising for around 37 years. Seems like a long time because it is. I actually started in my father's business in the great city of Brisbane in the state of Queensland in Australia. He was in the early 1980s, the founder of Australia's largest residential building franchise called New Steel Homes, which is no longer, it's been bought and sold a few times.
I cut my teeth there, really saw the power of franchising as a wealth creation and business growth tool. From there, I got very fortunate. I bounced around a little bit after dad sold the business, worked for companies that in some way or another specialized in franchising, whether it was a communications firm or a bank, for instance, Citibank. I worked for Citibank in Australia.
and got to roll out that franchise finance program over the years. They're very successfully to many countries and many thousands of franchisees and franchisors were financed through that program. It was very successful. From there, I worked in about four, five different franchise companies. Middle to senior manager eventually got to CEO or director. So I've had a successful career in franchising.
All of those franchise systems have been in the building materials, consumers, financial services, property maintenance, property services. I've covered all of that ground in my career. I've also done a stint in management consulting. I was a principal in a management consulting firm in Australia, really got deep into the strategy side of things, an organisational design in that business model.
which is very useful, but decided I needed to go back into real work, shall we say, with great deference to the consultants, and move to America, where I had been doing lots of business anyway over the years in franchise and helping franchisors get into the US marketplace. Because in my opinion, it's the largest and most lucrative franchise marketplace in the world. I mean, there are other countries where there would probably be just as many franchise units.
Michael ODriscoll (03:22.539)
but I doubt whether they would have the same kind of financial volume success as they do in the United States. I met my now partner working here. I've helped quite a few different franchise brands with their entry into the United States and a couple of US brands with their assessment of international markets and where do they go, how do they do it, because there's a variety of ways you can do international franchising. It's just not one method.
Michael ODriscoll (03:53.993)
it needs to be done well because it is cross-border transaction and there's cultural issues in play. But I enjoy the international franchise side of things. When you actually get into the research about it, it is just phenomenally successful everywhere. I mean, there's probably countries where franchising isn't used, but I can think of most of them where they are and they've all got franchise associations of some description. And they've been...
I've been very happy to play in that global franchising space. I've been very fortunate. There we go.
What Makes a Great Franchise System? Key Qualities Explained
Jeff Dudan (04:28.926)
Michael, I can't think of a better person to ask this question to, and I'm going to throw you just a big squishy softball here. What makes a great franchise system?
Michael ODriscoll (04:41.323)
I can't hear you, Jeff. Your sound is disappearing.
Jeff Dudan (04:44.33)
Really? Okay. I said... Okay. Let me turn up the mic just a little bit. How about now? Is it better? Okay, great. So I can't think of a better person to ask this question to. I'm gonna give you a big softball here and you take it wherever you want to. What makes a great franchise system?
Michael ODriscoll (04:45.779)
Yeah, I don't know whether that's me or that's you. It's just really soft.
Michael ODriscoll (04:55.744)
Oh, that's better.
Yeah.
Michael ODriscoll (05:13.156)
Well, first of all, I don't think there's any one definition, right? And that's a really, it's a cop out answer, but franchising itself is not an industry per se. It's a method of distributing goods and services, right? People often, and certainly the franchise sector perpetuates in a little bit where people think it's some kind of industry sector, you know, but it's not. It doesn't have any official classification.
most federal governments around the world, if you went into their Bureau of Statistics, you wouldn't find necessarily franchising as an industry category. You might find a mention somewhere in there, but franchising as a method of distributing goods and services exists across many industry categories, if not most these days. There's pretty much not much that hasn't been franchised or in one form or another. So it is very difficult to define necessarily what good looks like, because what's good in
home services might not necessarily be the same standard of practice that you would see in quick service restaurants, for example. So, although there are some universal principles in the sense of how do you treat your franchise owners, your franchisees? Have they invested in an underlying sound asset? You know, it doesn't matter whether you're been at franchising for three years or six months. If you're a franchisor, the person that is granting the franchise rights, you're
It is absolutely essential first and foremost that the underlying business, the thing that is being franchised is sound. So is it something that some guy just started and went well for six months and then started offering franchises? Or is it something that has a trading record successfully over a few years at least, preferably longer, so that there is a substantive underlying business asset that has a degree of uniqueness to it that is replicatable across many markets?
That in essence is what a good franchise model is. Now having said that, it is also by its nature very entrepreneurial. So people take risk in expanding businesses using the franchise business model. And when I say risk, it's classic entrepreneurial risk. They have limited capital, even though they might have a successful underlying business, but they use the capital of franchisees.
Michael ODriscoll (07:35.031)
to expand the network of those franchises and build scale inside that brand for the benefit of themselves and the franchisees. So that was what in, that's kind of a bit of a classic definition of franchising if you will. Now, these days it's thankfully way more sophisticated. There are still the entrepreneurs that rip in there with a business idea, see an opportunity or they owned a business and they think, I want to scale this thing but I want to do it fast and I want to do it.
on a shared capital basis. So that means using franchisees capital rather than build a big corporate head office. I want to keep it lean and I want to grow rapidly. So, you know, it's not uncommon for new franchise systems if they get their franchise program right to grow by a hundred percent plus per annum, you know, that's the nature of the model. What you have to be is savvy enough to support that growth.
because growth, hyper growth is as challenging to support as business decline. Although one is better to work on than the other. So in franchising in that sense these days, it's become a little bit more sophisticated. There are laws that you have to comply with in the United States. There is disclosure regime that you have to embrace. There are brokers that you had consultants that you might want to deal with. It's a very sophisticated and mature marketplace.
for people to own small businesses and grow their businesses. Most of the people that buy franchises these days are reasonably well informed because it is such a ubiquitous method of doing business. Now, it's not some kooky sitting on the side way of doing things. It is deeply entrenched across many industry categories. If you walk down Main Street somewhere, you'd probably see seven or eight out of 10 of those businesses in one form or another a franchise these days.
It's very ubiquitous, very common method of doing business. But what makes a really good one for me is the underlying asset must be sound already, preferably with at least three years of trading underneath it. Then you must look at the leadership of that franchise company. Do they know what they're doing? Now you can give them a few points for being new to franchising.
How to Evaluate a Franchise Before You Buy In
Michael ODriscoll (09:51.687)
learning as they go, as long as they do the right thing, like join the International Franchise Association, go and seek education about what good franchising looks like, network with people that have done it before. Maybe hire people inside their organisation that have some experience, particularly when it comes to marketing, because the lifeblood of all franchise, good franchise systems is their marketing methodology. It should be proven, known. They should have people dedicated to that function.
who know how to help franchisees run local marketing programs in their territories that drive their top line growth. That's really, really important. So if you're looking at a franchise system, you want to scrutinize what are their marketing chops. All right. You need to know that they know how to help you acquire customers. All right. That's really, really important. So you look at their marketing systemization is a word that's used in franchising. So I look for things that have been.
have been early adopters of systemization? Have they got a little operations manual, even though they might not have been around for a long time? Have they bothered to document policy process as a learning? Do they have a dedicated training function? Not everyone does that these days, but that's really important. Have you taken your intellectual property and have you developed it in a way that is easy for adults to learn so that they know how to...
spend a few weeks being taught your business, and they can reasonably go out into the field and operate that business, even though they've never done it before. So that's really, really important. So that speaks also to the quality of the underlying asset. It needs to be that replicatable business that is not difficult for people to operate. They don't need a PhD, they don't need an MBA, they need their capital, they need their right attitude, they need their character and resilience.
and they need their discipline to apply themselves to the implementation of an annual business plan. So for me, when I'm looking at what makes a good franchise, I look at those things, but I also look at who is it that I'm dealing with on a day-to-day basis if I'm a franchise owner or franchisee? Is it the owner of the business or the founder? Is it a general manager? Is it an operations business coach style person?
Michael ODriscoll (12:17.247)
And I make sure I try and connect with those people. And as best as you can, good franchise models hire people that come from the sector, not just with franchise business model experience, but if it's a fencing company, they know something about building a fence business, or they know something about how to build a fence, because you need that technical expertise. And that's what people are investing in. They're actually investing in you and your people and the intellectual property you've created that teaches them.
how to run a business and have a better than average chance of being successful. So I look at all of those things. A lot of people will write a big capital letters culture. What is it? Do they resolve conflict in a healthy manner, which is something I've heard you talk about before. Are they able to move past things, points of difference, actually collaborate and find ways of cooperating together for the benefit of all the stakeholders in the business. I think...
people really need to look closely at that. Who are the people I'm dealing with? Not only their experience, but their character, their philosophy about business. What's their vision for the business? Are they here just to flip it quick, make a few bucks and move on to the next thing? Or do they actually have a long-term commitment to building a viable asset that is successful for all the stakeholders? So there's some of the things that I look at when I'm thinking about what is a successful...
or what makes a good franchisor, there's some of the things. I mean, you can go into great detail about each one of those points, right? But at a high level, particularly when people talk to me about what's a good franchise. I wish I had a couple of bucks for every time I've been asked that question over 37 years, I wouldn't be sitting here. I tell people, you've got to do your homework. I'm still surprised people come into franchise models without doing sufficient homework. You've got to understand, what do I get?
and what don't I get? The second part of that is what do they do and what is my responsibility? Because you're a business owner, it's your business. You've taken a franchise license from someone, but they don't run it for you. You have to run. You have to be accountable for that business ownership. That's the other thing I look for in good franchise businesses, right? Is what's the health of the franchisees? They might all be new.
Michael ODriscoll (14:41.271)
But is their attitude right? Are they participating in meetings? Is there a lively and constructive exchange of ideas and problem solving? That's the kind of thing I also look for, for a relative mark of, is this a high quality franchise system? Not all about the franchise or, if they've got franchisees, what are they like? You can ask that question as well.
Jeff Dudan (15:03.786)
I think that's an incredible point. Much of what you just spoke to lean towards the emerging new brand perspective. Obviously, if you're going to join a, I don't know, a Minikey, a Mako, one of those big, you know, 50 year old brands that has thousands of locations, the systems are going to be set, the business practices are going to be set, you're going
Jeff Dudan (15:34.16)
refined over many, many decades. And there are definite advantages to that. What might be some of the advantages to joining an emerging brand? Of course, Homefront brands that we're building together. In partnership, we're building that. And while the companies that we've put into the platform have been operating some since 2006, 2007, as a platform, we are emerging. And we've got...
great new systems and you know, so there's opportunities I think for people to join kind of a fast growing emerging platform. What might some of those opportunities or advantages be?
Emerging Brands vs. Legacy Franchises: Risk, Reward, and Opportunity
Michael ODriscoll (16:13.131)
Yeah, you're quite right. There is a difference between if you're a franchise owner, your assessment and what you might expect if you're joining an emerging system. And an emerging system is, it's got a few definitions attached to it, that it's, you know, the range is broad, and versus a mature system, so like a Subway, who's been around for like 50 years or 60 years or whatever it's been. And, you know, very prescribed processes, policies, benchmarks.
a heavy systemized and successful way of doing things, right? So there should be a higher degree of predictability to that. You might not get a big, steep growth trajectory, depending on the market that you're going into or whether you've bought an existing site or not. But an emerging franchise system comes with a different set of risks. Obviously, it's a newish style business that hasn't been around for 50 years. The underlying asset might've been trading for many, many years. So the thing...
that they built the franchise, the business that they built the franchise business model on. Hopefully it's been around for quite a long time, very successful trading record, a lot of know how in there. But at the same time, when you come into an emerging system, it's pretty typical that not everything is worked out 100%. The franchisor is still building their expertise. They're still building their expertise about the franchise business model. They'll have deep expertise about the business that's being franchised.
Michael ODriscoll (17:38.955)
The operations manual might not be 100%. They might not have everything documented. The training might be done not by professionals, but by individuals and subject matter experts in the business, which is perfectly okay. They might not have a massive team, might be very, very lean. You might be dealing with the founder or you might be dealing with just a couple of people. It's the old story, they don't know what they don't know at this point in their journey. Although I still argue that it's become more sophisticated than that.
So what should you expect? Well, you should expect that and accept that you're going into an emerging system. It's not all fully baked. There's stuff that needs to be developed as the system grows, as they appoint more franchise owners, as more trading volume goes through those franchise owners and they acquire more customers, they get more capabilities to analyze that data and understand how to get better at acquiring customers and growing the top line. And then you've just got throughput through the franchisees to be able to benchmark.
all of the KPIs that you need to benchmark to understand what the pathways to profit might be for those franchisees. Very hard to do in the first year of operation, but gets better as time goes on. So it's kind of like, it's the ultimate representation of entrepreneurialism in the franchise business model where you have emerging franchisees. If you get in at that ground floor opportunity, rightly, if you're in there for a while and you're successful, you're probably...
going to see greater returns over that period of time, because you've taken the risk equation and you've gone early rather than later into an established mature model, which has more predictability to it, but perhaps not the same growth trajectory or return. So it's all about the risk profile you want to take, right? I know at Homefront, we've got some very sophisticated franchise owners that recognize it for what it is.
underlying business assets are very sound, been trading for a long time. It's a sophisticated team. It's a, you know, we've gone the extra step to hire well ahead of revenue and get all the expertise and the leadership and the technical subjects, like lead generation that we, we believed we needed to be to go faster to that enterprise mature level of organization. And I think that helped us attract that caliber of franchise owner. We've got very sophisticated owners.
Michael ODriscoll (20:03.815)
very successful senior executives or people that have owned many businesses before or other franchises, but they're savvy enough to recognize the ground floor opportunity and what that means over a 10 year period of their franchise agreement. So I think it just gets down to risk profile and what your appetite is. And with an emerging brand, yes, absolutely you will carry more risk in there, but you should
all things being equal see a greater reward at the other end of that journey.
Jeff Dudan (20:35.894)
That makes a lot of sense. Michael, I've often heard you say to franchisees and other speaking engagements that it is our desire for you to start well so that you go well. Specifically, you are talking about how a franchisee approaches the first phase of their business, market penetration, market launch, the onboarding process, training, hiring.
negative 60 when they decide to join a franchise system up through training and then that first 120 days trading in market. Can you talk a little bit about the things that you would indicate to people that they should focus on if they want to start well?
Why the First 120 Days Can Make or Break a Franchisee
Michael ODriscoll (21:26.259)
Yeah, sure. It's a good point. Look, like anything in life, if something starts well, it feels pretty good, right? You think, oh, okay, this is good. You know, should have been doing this ages ago. It's the same in business. And I think, again, this is the power of a franchise business model, right? A degree of systemization of replicatable intellectual property, you know, that's documented and trainable. It's what's essential. And I've learned this over 37 years. I think you have too, is that
Jeff Dudan (21:33.14)
Yeah.
Michael ODriscoll (21:55.423)
It's in that first four to five months that the behavior gets baked in. Right. So whatever the franchisee experience is in that first four to five months, and you could include, you know, negative 60 days to opening versus, you know, 60 to 90 days afterwards. Um, it's pretty much what you get, right? So if it's an average or poor experience, that could define the rest of the relationship for the term of the franchise agreement and you get a sub optimal performance because everything seems hard, right? The franchisee.
has had a poor experience by their own hand or the hand of the franchisor or both. It's very much a two-way street franchising. So if that's poor experience, you kind of got it forever versus anything in life. Anyone can reflect on, think of when something started well for you and how you felt psychologically and emotionally about that versus a poor experience that you had. Something that starts well gives you confidence
It gives you resilience because inevitably in business, something will go wrong. It's just the nature of human beings being involved in business. So if you start well, it gives you confidence. It gives you focus. It gives you resilience. Three incredibly important things to have in business ownership. You do not need to be a rocket scientist to be a business owner. You need to have the character and the wit to go about it the right way.
and the accountability and discipline. That doesn't need, you don't need to have six PhDs. You don't need to have owned businesses before to have that. So I think about that as starting well means, can we get a franchise owner writing business, or at least doing estimates, lots of estimates, right? In their territories, even before they get to training, if that's possible, right? But sometimes you need them to get through training.
But it's essential that if they're transacting before their grand opening, in my opinion, that sets everything up for success. They see the art of what is possible without actually formally being open. And their confidence is boosted, their enthusiasm is boosted, their attitude is right, and they're good to go. And take a lesson from anything in life that you've done. If it's started well, you're good to go.
Michael ODriscoll (24:22.439)
It just feels right and you feel like you can conquer the world. All right. So it is absolutely essential. And this is a part of high performance or good franchising and responsible franchising, whatever you want to call it. Is the good franchisor invests in that. Right. They, they get their act together and they make sure from the get go, the customer journey, well, not the customer journey, but the franchisee journey. Is just good from the start.
And then you set yourself up the right way, and then you've got a really good symbiotic relationship and you can resolve future challenges together in the right way because you've got relationship equity in the bank and you can just get it right. So over the years, I have learned very much the importance of creating franchise business models that just focus on starting well, right? That experience for the franchise owner. So their confidence is good and their focus is great and they're accountable.
high. And that, you know, I narrow that down to the first four to five months, but it's also true of the first 12 months. Hey, it's their first 12 months of being in business. We want that to go well. A lot of franchises, people that buy franchises want profitability now. You know, they think it just happens, but it doesn't. You actually have to build up a trading track record. You have to grow your top line. There is no bottom line without a top line in business. That's not the way business works.
So, you know, I often recommend to franchise owners, profit is important, but only if you've got a top line to help you create that profit. So keep focusing on growth. By their very nature, franchise business models are growth orientated business models, right? They need to grow, right? They can't meander along at one or 2% like a big corporate paradigm. They need double digit every year.
because you've got an owner driving it at the local level and you've got a franchise or holding that owner to account on their performance because both win out of that. I mean, that's an incredibly powerful relationship when done well. And I always tell franchise owners, the profit will be there if you're disciplined enough with how you run your business, but only first and foremost, if you've grown the top line. So that first 12 months,
Michael ODriscoll (26:47.219)
Sales, sales, building profile in your community, making people or helping people understand who you are, what you stand for, why you're doing it, and how they can engage with you, absolutely essential. Lay that foundation for the first 12 months. Inevitably, people have signed a 10-year agreement. They're making a long-term commitment, hopefully to at least five of that. They've got to get those foundations right from the get-go. Otherwise, the building will have problems down the track.
Jeff Dudan (27:17.834)
Yeah, fair enough. At Homefront Brands, we've invested heavily financially and also from an energy and attention perspective in this concept of human-centered design. And what that means for us is putting the franchisee at the center of everything we do. One of the things that's clearly evident is in our learning management system, our investment in our learning management leadership, our learning management team, our learning management
It's we're one of the I don't know anybody else who net promoter scores their franchisees every month But we do and our learning management system Especially and coming out of training. We also get net promoter score coming out of training and every month Because we're growing so fast that we want to make sure that perception is reality and we're focusing on Making sure that we're focusing on the issues that affect our franchisees in operating their business but
When you look at the learning management system, what other ways are we focusing on keeping that franchisee at the center of everything that we do? And how important is that philosophically subtle, but significant in growing a healthy franchise system?
Michael ODriscoll (28:37.459)
Yeah, no, it's a great question. So this is in the bucket of starting well as well. If your approach as a franchisor is to just award franchises and say, here's the ops manual, here's a bit of training and away you go type of thing, what we'll call franchise light, it's leaving money on the table for all the stakeholders. And it's really not the responsible thing to do. In my opinion,
Human-Centered Franchising: Putting the Franchisee First
Jeff Dudan (28:42.811)
Mm-hmm.
Michael ODriscoll (29:08.351)
Great learning and development. So learning and development design, so for adult learning, right? That's a particular method of teaching people. And that's what we prescribe to at Homefront Brands. We've got a very, you know, well experienced learning and development executive who creates the content. So it takes all that wonderful intellectual property we have in each brand and basically creates online learning modules and classroom learning modules. Very important.
Because it's not just the one off at the initial training, it's the ongoing commitment to knowledge. Knowledge comes from the franchisor, but knowledge is also created by your cohort of franchise owners. So the good franchisor creates a method of harnessing the work done by franchise owners in the field to keep developing the franchise business model for everyone's benefit, capturing those gems of wisdom that come from frontline trading.
is absolutely essential and is a very important part of responsible franchising. So I make sure that, and that's an example of putting the franchisee at center on the organization. Franchiseurs that pretend that they are the all-seeing, all-knowing being are being delusional. They're not the person that is interfacing with the customer, even if they've got a call center inside their organization, which is very important to in some way, let that voice of the customer fall directly on the franchisor ears.
So they have a balanced view when they're talking to franchisees. It's still the franchisee is the primary customer point, right? That's where they're not. They're the ones operating the businesses around the country every day. They know what works and what doesn't. The responsible franchisor knows how to listen to that without getting emotional, right? And says, that's good. That's a fantastic idea. We should trial that before we roll it out.
or has a lucid argument around why they're not going to do something even though a couple of franchisees might think it's a good idea. They just don't dismiss things out of hand. They give an appropriate amount of airtime to the franchise owners because they're the ones doing the business. So unless you own corporate outlets, which is not uncommon in some franchise brands, so that you're directly interfacing with the customer, you have to rely on the franchisee to run their business well.
Michael ODriscoll (31:34.811)
and to give you feedback about their experiences so that you can keep developing that intellectual property for all the stakeholders benefit. And again, if you found a responsible franchisee you would absolutely see that they would do that. And in validation, when people are making their assessments and they're talking to existing franchisees, you should be able to hear that from the existing franchisees. Yes, they give me the time of day, they listen to me, they explain why they're not going to do things.
They just don't issue policies and make us do stuff. They actually explain things. They consult us when there's big decisions to be made and just don't shove stuff down their throat all the time. These are intelligent people that have taken a risk journey with you. Don't treat them like children. Treat them like adults that you would have a warm relationship with that you should be able to trust in order that you can together both build the franchise system.
So wherever you get them, there's some stuff, some days you just, something happens and you just have to issue policy, right? So guys, and, but you set the expectation as I do in training, I say there'll be days where you just have to take one for the team, like in any team environment, right? And there are days when we'll sit down and have a chat about it and say, is this the right thing to do for everyone? Right? And both parties can get to explain their position. It's not always easy to do that, right? Because people get emotional about things because they get attached to their idea.
or their way of doing things. And so they create this emotional attachment and they get wound up about it. They get really passionate about things because they are and that's what you want. You want a passionate group of franchise owners driving their businesses. But at the same time, you want to encourage ideation but it needs to be managed. It just can't be freewheeling. Because what might be a unique circumstance for one franchisee that works really well for them.
that rolls out to the whole network and doesn't work can be dreadful experience for everyone. So there's ways of doing things, right, in franchising that a responsible franchisor does. And that is, you might have a really great new product or service, but instead of releasing it to, you know, your large cohort of franchisees and train them on it and all that kind of thing, get the vendor involved, whatever's going on.
Michael ODriscoll (34:00.435)
You do it with a really small group of early adopters and prove it out. And then you roll it out in chunks rather than everyone. That's a responsible thing to do. Right. That's really important. And that's, that's what we mean by putting the franchisee at the center of the organization. Right. The first thing you have to ask yourself, and this gets real hard, right? This gets real hard. You need to be an experienced franchise executive to get through this. Is this the right thing to do by the franchisee? Because if it's not.
Jeff Dudan (34:09.11)
That's right. That's right.
Michael ODriscoll (34:30.535)
and you might make a quick buck out of it, but they don't get a lot of benefit out of it. It is a long-term nightmare, in my opinion, right? It just erodes relationship equity. Anything you can do that's good for the franchisee that helps them keep growing their top and bottom line, you are well served by as a franchisor, and you shouldn't complicate it any more than that. So it's essential that franchisors, in my opinion, have the clarity of thought about what it means to put
the franchisee at the center of the organization. Ultimately, they are the user of the intellectual property alongside the customer who's getting the product or service. But it's the franchisee that has to deliver that. They have to take what you've taught them at the take what policies and procedures that you have and the tools that you provide them. And they have to make it work in a geographic location somewhere. So when you think about that, and you think about what it looks like to them, you have to keep it.
relatively simple, even though it might've been a complex project that you worked on. The delivery needs to be simple. It needs to be built alongside the franchisee as much as possible. And then you need to set an expectation about what they will and won't get from whatever it is that you're doing with them. So yeah, human centered design, what does that mean? It's an old technology term. I'm not that old. Or an organizational term where you say,
You recognize that the stakeholders in a business are like users of software. As you know, the iPhone experience is elegant. If you've used the iPhone all the time, you don't have to think about it too much. You just pick it up and you start your finger, drag all over the screen. It's intuitive, right? That's what we mean by putting the franchisee at the center of the organization. We're taking that intellectual property. We're constantly refining it, but we're keeping it relatively straightforward for people to be successful inside that model.
Why Some Franchises Scale—and Most Don’t (90% Fail Within 12 Years)
Jeff Dudan (36:25.858)
Let's go to a topic that I'm very interested to hear your perspective on. It could be a little controversial. And the basis of where I want to go is why do some franchise systems scale and others do not. And to set it up, I would say, I would share, which isn't a stat that the industry is probably proud of, that 90% of franchisors fail within 12 years.
Michael ODriscoll (36:42.869)
Yeah.
Jeff Dudan (36:55.634)
Observationally to me, people have learned how to attract people to a franchise system and to award them franchises. There's things that you can do to participate in getting leads and bringing people in and getting them to give your business a go. Now I've observed that over year four, five and six.
and I've looked at this across businesses I built and businesses that other people have built. If a system has cracks in it, year four, five and six is where those become magnified because you can get people the first year you're going to get a handful of people in, they're going to be you know picnic baskets and they're going to definitely feel and rightfully so that they had input into how the system was built. They've got proximity to the owner founders.
Michael ODriscoll (37:34.795)
Hmm. Yes.
Jeff Dudan (37:51.778)
Year two you accelerate year three now. You're maybe up to what would be considered a standard Cadence of bringing new franchise owners into the system year four if things aren't working and If you've made some false starts and you've dwindled that bucket of relationship equity with that first 30 or 40 franchises that you've gotten the system
that you've shown them that while you talked a good game that you weren't willing to make the investments You weren't well, you weren't able to put them over the target You weren't able to make their life easy You weren't able to give them intelligence to figure out how to get another couple of points out of the business top line or bottom line at that point There's belief that's lost inside of a franchise system and I see so many systems getting to that year four or five and six and They've got it now. It's a break fix
or it's an overhaul or they've got to do something because they either didn't know what to invest in, in what order or they just couldn't afford to do it or they just chose not to. There's a lot of different reasons, but I'm shocked at the number of systems with 20, 30, 40, even 100 units that end up in some state of disrepair or some state of decline. And it's not something that we talk about in the industry a lot, but it's certainly out there because we don't want to.
Obviously we don't want to disparage our industry, but I also think from a responsible perspective, especially if you're looking at joining a system that's been around for one or two or three years or four years, what are you looking for if I'm a prospect? What are the types of things that would indicate to me that the business is going to continue to scale? And I think the last thing I'll say before I kick it over to you is
I heard Charlie Chase say this, who's the CEO of First Service Corporation at one time. He said, when you make a decision or an implementation into a network, it's 18 to 24 months before you understand the impact of the decision that you made. So when you were talking about not rolling, you know, piloting things, you have to be really careful because you're spending other people's time, energy and money. So when you're, when you roll something out.
Michael ODriscoll (39:44.965)
Thank you.
Michael ODriscoll (40:04.001)
That's right.
Jeff Dudan (40:06.55)
And everyone's like, OK, I trust you, franchise or I'm going to give this a try. And then it's going to run its way all the way through the markets and all the way through people trying it and adopting it. And if they look back after 18 months and say that wasn't good, you've only got so many of those before the sentiment inside of the franchise system turned skeptical. And skeptical is not a way to be nimble.
and have speed to market and take advantage of opportunities. You really want a high trust, high capability, high credibility relationship with your franchisees. All of that lays into the relationship equity piece that you mentioned, but I'm interested in your perspective as to if there's anything that people could look at where why some franchise platforms scale at that year four, five and six, and then others, it's the top of the hill and the decline starts from there.
Michael ODriscoll (41:01.567)
Yeah, it's a good question. Look, I don't know how correct, pardon me, that 90% number is probably about right. Look, franchising, I do believe it mitigates risk for small business owners, right, when done well, versus just, hey, I'm gonna start a fencing business and try to figure it out. You're walking into something that is a little systemized, has some methods of doing things.
It's not unreasonable to expect that the risk profile is less than sort of going it alone, right? Cause you don't have to go and figure out what systems and software you should have and how to, how to require customers, all that constant. Um, franchising in many markets around the world has a bit of a self perpetuating sort of myth that it's risk-free. Um, that's not right. Obviously nothing is risk-free in life. There is always risk attached to everything. So people need to recognize that. Um,
The second thing I would say is that I think it's an exercise in human behavior. Why is one entrepreneur more successful than another one? Why is one just successful and one is not? It's the same question I get asked about franchising. Why is one franchisee who takes the same system, brand, gets the same territory, pays the same amount of money, is more successful than someone who does the same thing but goes nowhere? What is that?
That is fascinating to me. And that is just straight out human behavior and thinking. It gets down to the character of the people. It doesn't matter whether they've owned a business before. It doesn't matter whether they've got a college degree. It just matters whether they've got the wherewithal. And what do we mean by wherewithal? Mindset. Do they have a positive mental attitude about, I can make this work. I am gonna make this work. The talk coming out of them is all the right kind of talk.
Do they have the character to make the tough calls? Like if they have to move an employee on or a contractor on because they can't do stuff, move them on. Make the tough calls of business that you need to make rather than let things linger and just keep getting mediocrity. It just doesn't work. And then there is the resilience and the accountability. Do they look in the mirror every day and say, if it is to be, it is up to me?
Michael ODriscoll (43:24.567)
A franchisor doesn't run my business. I run my business. My employees don't run my business. I run my business. I am accountable for producing an annual business plan and implementing that plan and holding myself accountable to it. Thank goodness I've got a franchisor who's there to coach me and guide me and give me the warning signals if something's off track and how do I get back on track? Again, the power of a good franchise model. But ultimately, they're accountable.
Jeff Dudan (43:28.142)
Alright.
Mindset Over Metrics: The Human Factors That Drive Success
Michael ODriscoll (43:52.223)
And they've got the resilience to get through the tough times. In 37 years, that's what I've seen at the franchisee level. Same age, same amount of money, same business model, same territory size, and it's just the individual. Do they have the wherewithal? It's the same for a franchisor, in my opinion. Franchising is harder for a franchisor. Again, the perception is, hey, a franchisor creates a franchise business model.
zooms up to 25 to 50 outlets or franchisees. Rolling in money is the perception that they are when it's not the case at all, right? They're still scaling. They're still investing in the business. They're probably paying themselves modestly, probably building good equity in the business. But it's still a hard road, right? Franchising is just the same as any other business model. Life doesn't get good until you've got the scale and the scale. And even then, you need good
to be a successful franchisee, you've got a top line and a bottom line to manage, and you're responsible to a large cohort of franchisees and your head office team members. I do think that just like starting well for the franchisee is important, starting well for the franchisee is important. They probably come in with, if they're a founder, great vision, very bold. At night, they're dreaming about having a thousand franchisees that are on stage at the
and they're getting wildly applauded because they've created this model that's made all these people money. Wonderful fantasy. And it's important to have those dreams, right? You gotta dream big in order to get big, right? It all happens with that ideation and that staring out the window going, this could be massive and I can do it, right? And facing down all of those fears and then getting your business, pardon me, get your business head on and...
creating the disciplines and accountability inside the franchisor so that you go well. So a responsible franchisor does not just sell franchises or award franchises to anyone that walks through the door. They have to be discerning. Even though the capital is important and you wanna award franchises and grow your brand, you have to have the discipline to look at each individual candidate on their merits and say, is this the kind of person?
Michael ODriscoll (46:17.643)
that I can continue to work with in the right way in five to 10 years time. Right? Can you, now you, like all great relationships, you don't know what you've got until you really got it. All right? So that's the risk bit, right? We think we know our partner when we get married, and then we find out a whole bunch of stuff we didn't know, right? So it's, and we either accept that and roll with it, or we run for the hills. So in business, it's the same.
Jeff Dudan (46:28.621)
Red.
Jeff Dudan (46:36.08)
Haha
Michael ODriscoll (46:44.723)
You want to make an assessment on whether or not you can work with that candidate. Are they going to be a net positive contributor or are they just going to be a disruptive soul? Now, I don't mind the disruptive souls if they're doing it for the right reason. They're challenging you with intelligence and common sense. They're just not throwing rocks at things because they're grumpy about the fact they're not doing very well in their business. So it's you absolutely
When you get to that four to five, six year mark, if you haven't been scurrying and it's a hard slog, then it's easy for your mind to go, forget it, I'm walking away. Right, because just like the relationship in personal life gets hard, if you can't find a way through it by anchoring to that positive, why am I doing this? Why am I doing this, right? What is my end game? Too many people in my opinion started business, whether it's a franchise or something else.
whether it's a franchisee or a franchisor, they don't start with the end in mind, right? They say, I just wanna be rich and famous, or I just wanna be rich. And I want people to like me because I created this opportunity and I did well. Very noble and very important to have those ideas and ideals. But ultimately, you have to say, well, what's my end game? And I think, again, thinking about the most successful franchisors and franchisees,
They have an end game, right? And they might say, I'm taking 10 years to build a hundred year legacy that goes multi-generational wealth, just like we talk about at Homefront Brands, right? Noble, obtainable and impactful, right? And I think great franchisors have that. They can articulate that. They can tell you what the journey is that they're on and where it's going. Now, there'll be forks in the road. Things will happen where they might have to adjust the end game a little bit.
Jeff Dudan (48:14.014)
Right.
Jeff Dudan (48:22.594)
That's right.
The End Game: Scaling with Vision, Discipline, and Emotional Intelligence
Michael ODriscoll (48:40.471)
But more importantly, they still have an end game. They're North Star that guides them, that makes them do the right thing instead of just, hey, you've walked in my front door, here's a franchise. And that's irresponsible. That's not doing the right thing by the existing franchisees. There is a responsibility that franchisees have that people that don't know about franchising don't really understand. And even the existing franchisees might not fully appreciate it.
You think you're just awarding franchises to anyone. Sometimes what franchisees think of franchisals, but you're not. I know that we're very discerning about the way we do it at home from, because we want everyone to play nice, right? The power of a franchise model is when the franchisees are not hunting against one another, but they're hunting in packs to keep the competition out of their markets and be successful, right? That's fantastic. They're solving problems together. They're cooperating. They're being wise about how they work together.
That's really important. So I think a lot of people just get fatigued because they allow their mind to trick them into saying, this was harder than I thought it was going to be. I should just give up. Whereas the most successful people go, yes, this is hard, but I still see the path to my end goal. So I'm going to make a commitment to resolving hard or accept that the journey is tough, right?
You know, one of those stoic lessons I like to slip in, it's not so much about the end game, it's about accepting what the journey is to get to that end game and not fighting it, right? Saying, I thought it would be easier. That kind of talk doesn't help you, right? Okay, it's tough, business is hard. Anyone who's been successful in business will not tell you it was a walk in the park. No one says that. You know, they said, well, it was hard and there were times I questioned myself.
Jeff Dudan (50:21.918)
Right.
Jeff Dudan (50:31.371)
Yeah.
Michael ODriscoll (50:35.943)
is this the right thing I was doing? It's perfectly normal. Where humans fail, in my opinion, is because they just don't have the resilience or the grit. They just go, oh, it's too hard. And that, to me, defines the difference between a successful person and not a successful person. Now, that is also normal, by the way. There are people who love the challenge. They're there for the fight. They want that daily high impact. Let's go. Let's...
scrap for every dollar, and they do it with good grace, hopefully. They're not difficult people to deal with. And there are people who just melt under pressure, and they just can't handle it. That's who they are. Some people can change that within themselves and overcome that, and just some people can't. And that is the human condition. As best we can as a franchisor, I think, and I reflect on my time as a franchisor, there's been some very difficult situations.
You wonder what the hell am I doing here? And how did I get here? And what am I gonna do? And then you remind yourself that you have a commitment to others. You have a commitment to provide for your family. You have a commitment to your head office employees. You have a commitment to vendors. You have a commitment to shareholders and you have a commitment to franchise owners to keep investing in yourself, to be better as a leader and coach your people how to get through the tough times.
If you've got to that four year mark, unless it's just a financial disaster, examine why things aren't going well and get help. Because if you're four to five years in and you've got 20, 30, 50 franchisees, you've got something. As a franchise business model, you're onto something. If you can stay the course, get the help you need, whether that's capital, whether it's extra people.
whether it's an advisory board, whatever it is, right? Invest in that, get through that, and you'll find, you know, get from 50 to 100, get to 100 plus, you just chunk it down. Try not to do it all in two years. You chunk it down into attainable goals on an annual basis, and you hold yourself to account on.
Jeff Dudan (52:45.675)
Right?
Jeff Dudan (52:50.974)
Yeah, franchising is a people business, and I've found myself saying that the older I get in life, the more important it is who I go through life with, and that's certainly true in franchising because it's a long-term relationship. There's mutual accountability. There's absolute alignment and goals, objectives that need to be agreed upon and committed to between all of the stakeholders in the business. And it's really, I mean, it is a collaborative effort. So...
Michael ODriscoll (52:54.56)
Got it.
Jeff Dudan (53:19.574)
When we talk about us or we at Homefront Brands, it's all of us. It's our partners. It's our vendors It's franchisees their employees our employees. I mean we are we are one and we work together on it Michael We're coming up to the top of the hour. I've got my favorite last question For you if you had one sentence to make an impact in someone else's life today What would you say to them?
Michael ODriscoll (53:43.163)
It's the same one I said last time, Jeff, and that is don't die wondering. All right. I've taken great risk in my life for great reward. Sometimes it hasn't worked out, but dust myself off, keep going, right? Because you're a long time dead. If you wonder whether you should do something or not, start that business. Ask that girl or guy out for a date, whatever it is, right? Face the fear. Face the fear.
Jeff Dudan (54:08.802)
You're a long time dead, huh?
Michael ODriscoll (54:12.675)
and have a go at it. Have a go as we say in Australia. Just don't get to the end of your life and go, I wish I did. I hear that story a lot. Regret is a very destructive thing and I don't want to live with it. Sure, I could have made better decisions in my life. Everyone could have. I don't beat myself up about it because it's dumb. It's just like, how can I be a better person? And am I living the fullest life that I can?
Jeff Dudan (54:14.655)
Yeah.
Michael ODriscoll (54:41.979)
And am I making a contribution? So don't die wondering. Have a good.
Jeff Dudan (54:46.786)
Michael O. Driscoll, president of franchising, chief operating officer, Homefront Brands. Thank you for being on the Homefront today. We appreciate your wisdom and your input to all of us. And everybody out there, absolutely, thank you for listening. Have a good day, sir.
Michael ODriscoll (54:59.787)
My great pleasure. Thank you, Jeff.
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