“If you qualify” are three words that actually mean what they say at Potbelly Sandwich Shop, which explains why the company conducted extensive research and took nearly a year to sell its first franchise. It would be unusual to find a franchise opportunity that doesn’t use those words as part of its recruitment pitch, and equally unusual to find a company that doesn’t use those words simply to qualify prospects financially: If you’ve got the money you can buy a franchise! Not at Potbelly. “If you qualify” is more than lip service. It’s a mouthful!
And, frankly, most prospective franchisees don’t qualify.
Mike Walters, Franchise Zone Manager
“Maintaining our culture is more important than selling a franchise,” explains Mike Walters, Franchise Zone Manager, and a Potbelly employee for more than nine years. “The Potbelly Advantage, which embodies our values, mission and vision, provides the strategic framework for our company and we won’t jeopardize it. That’s why we take franchise development step by step. Before we make a decision we constantly ask, ‘How will this decision impact our culture?’ If it’s going to be negative, we won’t allow it.”
Since its founding in 1977, Potbelly has opened 215 corporate restaurants, an average of seven a year, in 12 states. Two years ago the company decided to enhance its growth via franchising. At Potbelly, enhance doesn’t mean “speed up” as it would at many other franchise companies. Even as a franchisor, Potbelly might still only add an average of seven units annually, and that would be fine so long as the culture doesn’t take a hit.
Franchise Navigator: Identifying The High Performer Profile
“We’ve been very purposeful in planning our franchise rollout,” continues Walters, who’s part of a franchise team formed in January 2010. “We’re never in a hurry.” Fortunately, Potbelly doesn’t need to sell franchises just to stay in business (something else that’s not true at many other franchise companies). “It’s taken us two years to build the franchise model because building a strong model is a priority.”
With 215 units already in operation, Potbelly wanted to identify the personality profile for a qualified franchisee. And that’s something else that differentiates Potbelly from so many other franchise companies. Potbelly didn’t have to guess about the qualifications. “When our senior leadership team said it was important to develop a franchise profile, we decided to evaluate our own team,” continues Walters. “We know their performance, and if we can find franchisees like them then it will be easier to help the franchisees succeed.” That’s when Potbelly commissioned Craig Slavin, founder of Franchise Navigator, to survey the company’s general managers and create a High Performer Profile. Not only would all future general managers have to resemble the profile, the franchisee profile was also modeled on the High Performer Profile. Of course, these were the people who were already successfully operating Potbelly’s units!
Understanding The Components Of A Qualified Lead
Franchise Navigator is a behavioral, skills assessment tool that, since 1997, identifies the prospects that have the “right stuff” to be franchisees in any particular business model. The Franchise Navigator has demonstrated that there are four critical elements to a qualified franchise development lead:
- Financial – whether the prospect has the money to open and operate a franchise.
- Geographic – whether the prospect wants to open a unit in a geographic location that allows for market development.
- Skills – whether the prospect has the right skills to execute the business model successfully.
- Values and Behavior – ensuring that the prospect can embrace the company’s culture.
The first two elements are relatively easy to identify; the last two: skills, values and behavior, are key components in business, and especially in a franchise company that wants to protect its culture. Franchisees who can’t deliver in these areas are more likely to fail and create havoc. That’s where the Franchise Navigator earns its value. It provides an online survey tool that takes a prospect less than ten minutes to complete. Potbelly can then view the prospect’s profile superimposed with the High Performer Profile. That’s when Potbelly knows if the prospect is a match or a mismatch for its business model.
Through interviews, background checks and questionnaires, Potbelly collects information from prospects who are also encouraged to view the company’s online brochure, which Franchise Navigator also designed to attract candidates that resemble the High Performer Profile. The e-brochure features a story line about the aspects of operating a location and being a franchisee in the Potbelly system. “The eBrochure is specifically targeted to the profile we want to attract. We use the e-brochure to provide a lot of information upfront, and it’s a great time saver. It answers most of the preliminary questions asked by prospects,” says Walters.
“We rely on the Franchise Navigator to tell us more about the prospect’s personality,” he continues, “and how it compares to the profile of our best operators. It’s another checkpoint for us. It works well because we get a different and objective perspective once we understand a prospect’s Franchise Navigator results. Do they fit into our culture?” Until that’s known, the prospect doesn’t qualify.
Actually, it takes at least two to make a prospect at Potbelly. The company seeks only single unit operators, but they come in pairs or partnerships. Walters explains, “Our business model requires a team approach. Each of our units requires 100 hours a week of management labor, so that requires two people. We build a local, family, neighborhood business, so it takes a partnership.” Potbelly isn’t just about the excellent food; it’s also about becoming a landmark. “We want our franchisees and general managers to become part of the neighborhood, sponsor local events, do some fundraising for local schools, sponsor local musicians who play music inside our restaurants, etc.,” says Walters. “It’s a huge part of our vision.”
The results from the Franchise Navigator clearly denote whether or not prospects share Potbelly’s vision, and whether or not they’re likely to work together successfully, and within Potbelly’s culture. “During phone interviews we get an initial impression of our prospects,” Walters continues, “but we rely on the Franchise Navigator results to tell us more. Then, when the prospects come to our Discovery Day, we can ask pertinent questions to dig deeper into their personalities and to see how they react to one another and to us. The Navigator’s results re-enforce our process and our decision making.” Walters says he and his colleagues pay attention to the Franchise Navigator results because “we’ve found them to be accurate. If the Franchise Navigator results aren’t where we need them to be, we won’t move forward with a prospect.”
And only then does a prospect qualify!
John P. Hayes, Ph.D. has worked in franchising for 30 years as a franchisor, franchisee, speaker and author. He coaches franchisors and franchisees.
