Five Lessons Franchisors Can Learn From Network Marketers to Expand And Build Their Franchise Companies

By Dr. John Hayes

Franchise companies tend to think of themselves as a level or two (at least) above multi-level marketing (MLM) companies, but having worked in both industries I have discovered that MLMers (or network marketers) do some things more efficiently and effectively than do many franchisors.

Five lessons

Here are five ways you can borrow from the MLM community and help your franchise network achieve greater success:

Build relationships first, empires second Make duplication as important as the system Be willing to work for others Make continuing education your business Cultivate a pass-it-on mentality

Build relationships first, empires second

Network marketers emphasize building relationships. Franchisors emphasize selling franchises. Of course, franchisors train and support franchisees, too — some do it equally as well as the best MLM companies — but often there's not much emphasis on building a relationship, either between the franchisor and franchisee, or among franchisees.

Scott Boulch, a marketer who has succeeded in MLM and also worked with franchise companies, says, "People in MLM understand their income is one hundred percent dependent on their downline success, so relationships are important. But in the franchisor/franchisee relationship there's less of a connection. It's like they get a big franchise fee upfront and monthly royalties, but there's less concern about the day-to-day development of the franchisee." Top network marketers value relationships — it's a way of life in MLM.

Tom Ziglar, son of Zig Ziglar, whose speeches and books have inspired countless network marketers and franchisees worldwide, adds, "Success is about relationship. What a new franchisee really needs is a relationship with a real human being at the home office who can coach them every week on how to grow the business, and who also has a real relationship with them. Great network marketers not only sponsor someone into the business, they coach them daily and help them grow and recruit new people. They are more than just the sponsor, but a friend.

Make duplication as important as the system

"Without duplication, all your time and effort goes to waste because you don't get a big upfront payment in network marketing, and you want to be sure you get paid on the back-end," explains Boulch. He says new MLMers are told "to do exactly what your upline does; don't deviate."

In fairness, franchisees are told to "follow the system." But it's not the same. In franchising, the upline is usually the corporate office. In MLM, distributors don't need to call the corporate office. When they need help their upline may live just across the street, or they'll be at the next weekly meeting. Hands-on help is almost immediate in MLM and it cultivates duplication.

"There's no room to be entrepreneurial," continues Boulch. "Entrepreneurs don't make good franchisees and they don't make good network marketers, either. Those who do exactly what their upline teaches them to do will succeed." Relationship impacts duplication, too. It's easier to get people to duplicate when they're working directly with someone who cares about their performance and welfare.

Be willing to work for others!

It's an odd thing about MLM, but the successful people, those at the top of the uplines, are willing to go to work down line. "The job of the upline," continues Boulch, "is to make money for their downline. It's backwards in franchising. Franchisees are seen as making money for the franchisor. But in network marketing, the upline works downstream."

Again, relationship is a key. If franchisees sense they have a "friend at corporate" they are more likely to perform better.

Make continuing education your business

Franchising is often in the business of franchising whereas network marketing companies are in the business of training and education. "Network marketing companies are constantly educating," says Ziglar. "They complete one event and they immediately begin building to the next event. They do a very good job of keeping people plugged in to everything the company is doing. There's massive communication effort upline and downline." In franchising, franchisees sometimes complain that they only hear from their franchisor when they've done something wrong.

In general, franchising can benefit by implementing more educational programming, as well as opportunities to communicate. Typically, in a good MLM company there are several network phone calls weekly for educational and communications purposes. In addition there are webinars and online updates. Typically, franchisors under-utilize technologies that advance communications and education.

Cultivate a pass-it-on mentality

Successful network marketers must teach the next person. They must pass on their expertise to the next person.

Franchisees learn the system in training, usually at the corporate office, and they get ongoing support, but not usually from another franchisee, or practitioner. Franchisees are not expected to teach other franchisees about how to work the business, and yet, franchisees appreciate learning from other franchisees. That's why franchisee mentoring programs are popular. The MLM community knows the value of passing it on.

"In MLM," says Boulch, "a distributor learns the ropes from another distributor, and is then expected to teach the system to many more distributors, thus creating their downline. Teaching re-enforces the training. The minute you have to teach someone else how to do it you get better at it."

Go ahead, step down to new opportunities!

Even if it feels like you're stooping, any one or all of these five lessons may stretch your franchise network to new levels of success. And there are at least five more lessons to follow — you'll find them in Network Marketing for Dummies, a book that I wrote with Zig Ziglar.

Since 1979, John Hayes has worked in the franchise community as a consultant, franchisee and franchisor. He is the author of several franchise-related books and countless articles that have appeared in media worldwide. Dr. Hayes has served for many years as an advisor to franchisors, franchisees and small business owners internationally. He is the author or co-author of 18 non-fiction books including the Franchise Pre-Investment Checklist, Franchising: The Inside Story, Start Small, Finish Big, You Can't Teach A Kid To Ride A Bike At A Seminar and Get It! and The Secrets of Cultivating the HomeVestors Millionaire Mindset. To contact Dr. Hayes visit FranchiseMastermind.com.