Today's Guest

John Rotche launched his meteoric career in franchising riding around in pizza vans with Domino’s legendary founder Tom Monaghan. John shares the key lessons he’s learned along his journey as well as clarifies a common franchise myth. Now he runs Franworth, a private equity firm that invests in some of America’s hottest emerging franchises, with the help of a few partners including a football guy named Drew Brees.

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Episode Summary

I’ve been fortunate to spend the past 30-years working in the franchising industry. After college, I took what I thought would be a short-term job at Domino’s Pizza. I was lucky enough to catch the eye of the founder Tom Monaghan, he took me under his wing and taught me a lot about the franchise business model. 

One of the key lessons I learned from Tom was simplicity. For 20 years all Domino’s would sell was pizza and coke. While some people would debate him about offering other choices it ran counter to Tom’s goal of being the best delivery company with a quality product. Years later Domino’s does offer more choices but at their core, they are still one of the best delivery companies out there. 

My first venture into owning a franchise came when I bought my brother-in-law’s one van air duct cleaning business. As I looked around at the competition it was a fragmented market and a race to zero on price. Our idea was to launch a premium brand in a non-premium category. While we planned to charge a premium price we would also offer a level of service no one else in the industry had seen before. The great news is the idea worked and we were very successful at scaling the business. After that proof of concept, we decided to turn the business into a franchise model and within 3 years we scaled to over 300 franchise units. 

Along my journey, I’ve launched and exited several franchise brands, including TITLE Boxing Club that was named the fastest-growing franchise in 2017. Next, I saw a big opportunity to help smaller franchise organizations scale to 100 or more units. So we started Franworth to partner with brands in a mentorship role to help them succeed. 

If you are considering if you should start your own business or buy a franchise just look at the research from the Small Business Administration. What you will find is the success rate for franchise businesses is greater than the success rate of non-franchise businesses. The main reason behind that success is you are starting with processes and playbooks already in hand verse having to create all those processes yourself. Which allows you to focus your energy on the things that matter most like great service and a quality product. 

A common myth in franchising is that franchisors make a lot of money selling franchises. This is not the case once you factor in acquisition and startup costs. Where it can be a bit counter-intuitive is the time the franchisees need the most support is the same time they are paying you the least amount of money. There is an enormous amount of work the franchisor has to undertake before the franchisee sees their first customer. A quality franchisor knows this and they provide their services upfront long before revenue starts coming into that unit. 

Resources Shared

• Reach by John Rotche
• DUCTZ
• Franworth 
• Blinkist
• Thryv 
  

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