Multi-Unit Franchisee Magazine Issue IV, 2016 | Page 54
BY HELEN BOND
S
Succession
uccession
SUCCEEDING AT
IT’S NEVER TOO EARLY TO PLAN FOR A TRANSITION
F
or Wanda Sieber, what began as an ordinary phone
call became a wake-up
call. The person who
answered the phone told Sieber that the
owner of the business she’d called had died
unexpectedly, adding “We don’t even know
if we’re going to have jobs tomorrow.”
“It was like a lightning bolt through
my heart,” recalls Sieber who, with her
husband Bill, is a Unishippers multi-unit
franchisee with stores in Green Bay, Seattle, and Mobile, Ala. “This was a small
business, where people depended upon
each other. I immediately thought, ‘What
would happen if something happened
to us?’ That was when it was time to get
serious.”
Putting off succession planning is not
unusual for multi-unit franchisees, who are
preoccupied with running their everyday
business—not with when they will hand
over the reins, whether through careful
planning or an unexpected event. And as
more Baby Boomers inch into retirement,
the need to plan for succession has never
been more acute.
“We need to be looking not just at where
we are or need to be, but also ahead,” says
Sieber. Soon after that phone call, she says,
“We took care of all the things everyone
tries to avoid.” As the saying goes, denial
is not a strategy.
“What holds people back and has them
leaving so much on the table is the perception of what succession is,” says Kendall
Rawls a second-generation member of
52
the Atlanta-based succession planning
firm The Rawls Company. “Most people
believe succession planning is about retirement and exit planning. What we believe
is that succession is about value. It is not
about the things no one really wants to
talk about. It is about franchise growth,
sustainability, and creating options.”
If Rawls had her way, the word “succession” would be tossed from the conversation in favor of “building value.” Beyond
ROI and cash flow, potential buyers and
successors will consider future earnings,
key leadership, management expertise,
and family dynamics when valuing the
business. Add in the varied (and often
arbitrary) requirements of franchisors in
approving transfers, and a well-structured
succession plan is critical to preserving a
franchisee’s hard-won equity.
“If there is not a strong plan in place
from the franchisee, the franchisor holds
all the cards,” says Rawls.
Why and when a business owner decides to exit differs for everyone. Problems
occur when plans aren’t communicated
effectively, particularly within familyowned franchisee firms, says Dean Zuccarello, founder and CEO of The Cypress
Group, an investment bank and advisory
services firm specializing in restaurant and
franchise companies.
“In some cases it is like the elephant in
the room,” says Zuccarello. “The family
hasn’t done enough internal communication, planning, or soul-searching to discuss
the right plan for themselves.”
Whether a franchisee seeks security
or wealth from a sale, or is forced to step
back because of age or health, the goal
is to make decision-making as strategic
as possible. “We encourage people to go
through a disciplined process of evaluating those things,” he says. “So when the
time is right they are committed to the
process, they know why the time is right
for them, and there is no second-guessing
or missing an opportunity to act.”
Building for the future
For Weed Man subfranchisor and multiunit franchisee Terry Kurth, a secure
business future means building a strong
bench. A lawn care veteran and Weed
Man franchisee since 2001, he is counting on the leadership of his son Andy to
build the business into a $15 million to
$20 million company in the next decade.
Like many children growing up in a
family-owned business, Andy had worked
for the company when he was younger. He
joined Weed Man in 2004, armed with a
degree in soil science and turf management
from the University of Wisconsin-Madison. When a general manager quit without notice the following year, he stepped
into the job and has never looked back.
From their home base in Madison, the
father-and-son team have built a nearly
$7 million business, with satellite offices
in three additional Wisconsin cities, along
with Northwest Chicago, Austin, and
Denver. In 2015, they were named the
brand’s Franchisee of the Year.
MULTI-UNIT FRANCHISEE IS S UE IV, 2016
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