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Operators test out potential franchisees with hands-on internships

Chicago homebuilder Andrew “Drew” Ferris traded in his tool belt for an apron to become a franchisee of Moe’s Southwest Grill, but before signing a deal, he invested a little sweat equity in the brand.

Ferris completed a four-week, unpaid internship at one of the Atlanta stores of the fast-casual burrito chain. He swept floors, bussed tables, restocked the salsa bar and learned food prep. He worked six days a week, eight hours a day. And when it was over, he remained enthusiastic and accepted a franchise agreement to build as many as 10 Moe’s in Chicagoland over the next five years. 

Moe’s, which has more than 400 restaurants in 34 states, launched the internship program this year as a way to screen potential franchisees who have the money to open stores but lack restaurant experience.

“My closest thing to restaurant activity was cleaning a butcher shop when I was in high school,” Ferris said. “It really showed you from a hands-on standpoint what needs to happen day to day.”

Many franchisors are improving their pre-screening processes as a way to avoid future problems. Along with more typical “discovery days,” some restaurant companies also are putting potential franchisees into their stores for practical experience — before a deal is signed. Franchisors say the practice is more likely to ensure the success of a future operation and better relations between corporate officials and the franchisee.

“Since Focus Brands acquired Moe’s about three years ago, we have a philosophy: We are going to take as much time to bring new franchise partners into the system as we do when we bring new people onto the corporate team,” said Moe’s president Paul Damico. 

Ferris went through the internship even though he is partnering with an experienced Moe’s franchisee, his brother Brian Ferris, who owns 12 Moe’s in the Atlanta area. He’ll return for four more weeks of training before his first store opens in Schaumberg, Ill., in September. 

Internships are uncommon in the franchise community, said Alisa Harrison, spokeswoman for the International Franchise Association in Washington, D.C. 

“Many have training sessions and other exchanges to determine if a potential investor is a good match, but requiring a potential investor to complete an internship is one of the newer ways to determine the sustainability of an investor,” Harrison said. 

Some franchisors might be reluctant to bring in a potential franchisee before signing a deal, said John Driedger, vice president of franchise development for Pizza Fusion, a 22-unit organic pizza chain based in Fort Lauderdale, Fla. Pizza Fusion puts potential franchisees through a behavior screening assessment called TraitSet to find operators with the right attitude and conduct for the brand.

“The franchisor is afraid of showing the franchisee all of its blemishes,” Driedger said. “Then they are afraid the franchisee will not want to do it. Or they are afraid they will take what they learn to create their own concept. In the back of a franchisor’s mind is the thought: Don’t steal my idea.”

But getting the real-life experience in a store helps both the potential franchisee and franchisor determine if they are right for each other, said Tom Goldsmith, director of development for Culver’s ButterBurgers & Frozen Custard, the 419-unit quick-service chain based out of Prairie du Sac, Wis. Culver’s puts potential franchisees to work in its stores for six to 10 days before agreeing to a development deal. The candidates come to Prairie du Sac and work in a company-owned store, where they learn every job in the restaurant, interact with customers and meet Culver’s executive team.

“I would guess that about 10 percent leave after the second or third day as they figure out this is not for them,” Goldsmith said. “We’re all very happy to discover that now rather than six months later or a year after they’ve opened a restaurant.”

Poor franchisee selection can have long-term, negative effects on a brand, Moe’s Damico said. 

“Two or three bad franchisees who do not want to do what the system wants to do, who do not believe in the franchise or the direction of the brand creates a distraction,” he said.

Moe’s former parent company, Raving Brands, was sued by three former Moe’s franchisees in Southern California in 2007 for fraud, unlawful trade practices and violating state franchise investment laws. That same year Moe’s was sold to Focus Brands. The case was dismissed in 2008.

Operators need to be just as careful selecting franchisees as they are in choosing employees, said consultant Bill Wagner, chief executive of Accord Management Systems, a Westlake Village, Calif., company that offers management and employee assessment tools for restaurants and retail clients.

“Most states are at-will states,” Wagner said. “At the end of 90 days, if it’s not working out with an employee, you can get rid of them. There is not much of a legal challenge or financial obligation. With restaurants you are looking at people with a 10-, 15-, 20-year license. Once you bring that person on board and they get familiar with operations, it’s almost impossible to get them fired.”

Beef ‘O’ Brady’s Family Sports Pub based in Tampa, Fla., also has used behavioral testing to prescreen franchise candidates, but is now also considering some sort of on-the-job screening, said Nick Vojnovic, president of the more than 200-unit family sports bar chain. 

“You can sit at a desk all day long and answer questions and interview,” Vojnovic said. “But the real test is in the store — how do they deal with people, how do they deal with employees? The rubber hits the road in the restaurant.”

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