FranConnect: How this Tech Company Started Thinking Big

I joined FranConnect as CEO in March of 2015. I’m an enterprise applications software professional. My whole background is working with technology and providing mission critical software solutions to businesses around the world. I’m trained as an engineer, but grew up on the sales and marketing side of technology businesses. I worked in relatively large software companies and then in more emerging companies that were higher growth and being built and funded by private equity or venture capital. I’ve met some incredibly talented people along the way.

FranConnect is a company exclusively focused on providing a comprehensive set of enterprise-class business applications to the franchising market. I met Amit Pamecha, our founder, through the technology legal practice at DLA Piper. We were connected through one of their partners in 2014, and Amit further connected me with the private equity group who now owns a majority of FranConnect.

After a long courtship between Amit and Serent Capital, our private-equity partner, Amit sold a majority of the company to them in late 2014. He now serves on the board as a minority shareholder. Part of his agreement was to help with a leadership transition.

Company growth strategy

I had the good fortune of stepping into a healthy company. It's a very unusual situation to step into a CEO role where things are going well. In this case, Amit stepped down from the position he managed well, and I picked up where he left off.

• We have made big improvements across the FranConnect Sky suite and continue to provide updates every 90 days.
• We also now have three mobile apps.

We have done a lot to improve service delivery and customer success. FranConnect was always a great company. In the past, we focused more on the technical deployment of our software. Now we focus on creating value through the deployment and use of our software. As a consequence, customer conversations are focused on how we add value across the entire franchising lifecycle. We have modules that address every franchising business process for both the franchisor and franchisee and each of these modules has a tangible value proposition.

Unit economics focus

If you look along the franchise lifecycle, the two primary things that drive economic value for franchisors are:

• 1. unit economics, and
• 2. unit growth.

Therefore, we look at orienting everything around better and better unit economics and unit growth for the franchisor.

We did a formal study using a third-party consulting firm who talked to our customers and market influencers to develop an in-depth understanding of the market from an outside-in perspective – we put the most weight on what our customers shared. What we heard loud and clear is that unit economics and unit growth drive our customers’ businesses. As a result, we changed our approach to focus on those two things. It’s now the conversation around which we orient our internal discussions and how we build, deliver and support our products.

• We do ROI modeling now, and start the ROI discussion early with our prospective customers.
• We started investing more money into the people involved in the development and delivery of our products.
• We also have a lot more experience with best practices in change management and what best practices to apply to all aspects of franchising.

You can have the best tools in the world, but if you don’t have the right processes in place, you won’t get the best results. We have really focused to make sure our products and technology are helping our customers put the right processes in place. With customer service and delivery, we spend a lot more time understanding customer satisfaction. Our new services leader, Gabby Wong, is a thought leader in customer success and business applications software.

It’s about getting the right people in place and having a strong team. We have a lot of new folks who joined us in the last two years., We’ve also invested a lot in our infrastructure and processes. We are using tools to better serve our customers. We are improving our company culture. At every quarterly company meeting, we share our results – all team members have a stake in the success of FranConnect. All executives are compensated on our customer satisfaction scores. This incentive system reinforces our customer core values.

Future planning process

To keep thinking big, we have structured meetings off-site using good-to-great goal setting sessions as we think about the future. The executive team gets together off-site for an annual strategic planning meeting where we also take a 4 to 5 year view of our business. We ask ourselves tough questions about how to put our company in the best position to achieve our goals. These forums are very candid, with a lot of good, healthy debate that encourages disagreement, because one point of view doesn’t always make for a good outcome.

For example, throughout the first half of 2016, we developed a 2020 strategy – the strategy was developed after several off-site meetings where we discussed various paths we could take. As part of our planning process, we are always looking at how we can create value for our customers – through superior services and products. Our products are better; they are not just cool or different.

Our customers are investing in our products to drive better unit economics and higher unit growth. These outcomes inform how we sell, support, deliver and build our products. Getting the right people around the table and giving them the freedom to collaborate makes a big difference.

You never get it all right, and you have to constantly reevaluate and trust the process. I personally like short-interval feedback loops with a commitment to adapt, and I don’t set an overly firm path. We are constantly looking at data and results and asking ourselves if we need to refine what we’re doing.

Our software has always been hosted in a world-class datacenter, but it didn’t always serve multiple tenants (customers) within a single SaaS product. Now every time FranConnect Sky is updated, every customer using the product gets updated. There’s a robust quarterly process for delivering these new versions, including updated training and documentation which are a key part of the process.

By contrast, in the past, each customer had a slightly different version of our software. We continue to support these customers and intend to do so going forward – however, now they have an option to migrate to FranConnect Sky and enjoy all the capabilities it has to offer.

I spent a lot of time studying the franchise market before joining FranConnect. I came to the company as an outsider – what I did bring was significant and highly relevant enterprise applications experience. One initial concern some people shared with me was that I didn’t know franchising, which was true –I took this as a challenge.

I began spending a great deal of time with the IFA and attended numerous franchising events. Most importantly, I spent and continue to spend a great deal of time outside the office meeting with C-level customer executives representing all types of small and large franchisors. I also began work on my Certified Franchise Executive (CFE) certification which I received in early 2017.

And, I was recently nominated and accepted as an alternate to the Franchise Supplier Forum, an organization comprised of leading suppliers who represent the broader franchise supplier community. While I’ve learned a lot, I am going to keep learning. I love the diversity of this market and the kinds of companies that are represented because the franchise business format applies to all sorts of companies.