Family Business Balancing Act

For a successful working relationship, understand and manage the realities of family-run franchises upfront.


Family Business Balancing Act

New customers of eBay drop-off franchise Sold It in California, US, are usually taken aback by the booming cry, Where’s my lunch, woman?î that swells through the store from the back office. If they stick around long enough, they’ll quickly learn it’s just Richard Chemel’s friendly banter with his equally sarcastic wife and business partner, Helene.

Married for 26 years and Sold It franchisees for two, the Chemels keep the spice in their marriage and business with their lovingly unconventional exchanges. It works. In fact, customers are so drawn to the laid-back family atmosphere that they regularly stop by to say hi – or to snatch a cookie that Helene’s father has brought on what has come to be known as ‘Pop Tuesday’.

Meanwhile, business is booming for the Chemels – the customer return rate is more than 50% and their 2006 gross sales hit almost $500 000. They give much of the credit to the fact that they run the business together. People know we’re a family, so when they’re dealing with us, there’s a comfort level on both sides of the counter, Helen says.

The Juggling Act

Running a franchise with family members can be great, but it can also be anything but. The stress can get to you and it can flow over into your home life, says Richard. In the early days Helene would dissolve in tears, unsure of whether they had made the right decision buying the franchise. We’ve seen divorces come from franchises, and then they lose the business, so what’s the point?

The Chemels aren’t alone in their effort to juggle family life with business. James Olan Hutcheson, president and founder of US-based consulting group Regeneration Partners, says more than 75% of all firms in the US are family-owned and family-controlled. And there’s growing recognition of the complexity behind running a family business.

In family franchises, challenges are a fact of life, so here’s advice that Hutcheson and families we spoke with shared about the challenges they’ve faced and solutions found to help them survive and flourish.

1.Can your family withstand the pressures of a franchise?
A family and a business are two living entities, and a marriage between the two isn’t always harmonious. Make sure to take an up-close and honest look at both dynamics before you unite them.

Janet Blasig and Andrea Dedmon are a mother-daughter team who opened their first Slim and Tone, a women’s fitness franchise in Colorado, US, in 2003. Avid workout partners, they realised they could provide a better space for women than the health club they frequented.

They were right. Their first location did so well, they expanded to two more the following year and have over 1 000 members. However, they readily admit that if it hadn’t been for their relationship going into the franchise, they may not have weathered the journey. We’re lucky we handle each other so well, says Dedmon.

If something goes wrong or we get upset, it’s over 15 minutes later. I’ve seen other family dynamics where a miscommunication or a spat wrecks their relationship – especially when money’s involved.

2. Define the individual roles of family members
Nothing is more potentially destructive than a family running a franchise with no idea of the individual members’ responsibilities. You must define the roles and responsibilities for family members, says Hutcheson. ìIn family businesses, that’s often lacking.

In business, too many chiefs make for an interesting situation. The Attilios’ family consists of Mario Sr., Diane, Mario Jr., Nick, and a rapidly growing chain of six Hungry Howie’s Pizza franchises in Phoenix, US. They couldn’t be more close-knit, but they faced challenges soon after opening their first location in 2000.

Mario Sr. found it especially difficult to get past what he calls the ‘clean your room syndrome’ with his sons. In the beginning, telling his sons what to do would get construed with their pre-existing father-son dynamic. At times he’s had to let go and allow his sons to learn on their own in order to avoid conflict.

The family found the best way to avoid conflict was to have clear roles and responsibilities. Now Nick is head of all inside operations, Mario Jr. takes care of computers and tech support, Mario Sr. oversees construction of new stores and repairs, and Diane is responsible for clerical work. Once we understood our roles, it just made everything a lot easier, Nick says.

3. Clearly draw the lines between franchise time and family time
Spending time together running the franchise isn’t family time, and consciously defining boundaries early on can save heartache down the road. Newlyweds at the time, Brad and Michelle Loucks purchased five existing Taco Del Mar in the US in 1999.

They work primarily from their home office, which allows them to take care of their daughter and be fully involved in each other’s lives. Yet, maintaining a healthy balance between work and home life remains a challenge. ìWe both have a hard time sitting on the couch watching TV knowing the office is right there and there’s always something to be done, Brad says.

To resolve this, they spend every evening from dinner until bedtime together as a family.

Setting aside family time is also important for the stability of the franchise. Defining the division between family and franchise, then respecting those boundaries while in the workplace, was a primary challenge that Ty and Jane Branam of ServiceMaster in North Carolina, US, had to overcome to maintain peace at work.

Since they started in 2001, they’ve learnt how to categorise issues as either personal or professional, setting up a time and place to discuss issues outside of work, or at least in private. ìFamily issues are going to creep in, but the more you can keep it all about the business the better off you are, says Ty.

Aside from learning how best to address personal issues at work, the Branams have also discovered that sometimes the best solution is, in fact, to work apart. We try to split up our days so we’re not together 24/7, says Jane. I come in around 11:30 and work late, and Ty may come in early and then go out in the field or do cold calls. We’re trying to structure it so we’re not constantly together.

4.Keep the lines of communication open
Create a structure that encourages honesty and openness. This prevents issues becoming problems and ensures family members are in sync. Be brutally honest, advises Ty. You may find out one person wants to make more money than the other.

You may have two sets of dynamics working against each other – one person really trying to grow something, the other trying to move slowly. So you need to find out what you’re willing to put into it and what your expectations are of the other person.

Dedmon and Blasig have implemented two planning days a week, while the Attilios arrange monthly dinners to make sure everyone’s on the same page. Meanwhile, the Chemels make sure they never go to bed angry. There have been times that Helene and I disagreed strongly,î admits Richard. ìBut I don’t think in 26 years we’ve gone to bed mad at each other.

Families that Play Together

When all’s said and done, families that can survive the stress of a franchise (and vice versa) are usually made stronger. The support that family members offer one another can be invaluable. There’s no one we can trust more,î says

Mario Sr. The individual strengths of family members are also often commensurate. I couldn’t do without Richard and he couldn’t do without me, because we complement each other, says Helene. I don’t want to deal with technical problems, and sometimes he doesn’t want to deal with people.

The perks of running a franchise together are unbeatable. The fact that we have the opportunity to be together all day long, even though we’re working, is just rewarding in itself, says Brad.
One thing’s for sure: The path will never be lonely, nor the journey dull.

You might even learn a thing or two about the people you thought you knew best. You can’t help but learn things about your mate, because it’s a totally different journey through business than through married life, says Ty, who has been married to Jane for 18 years. You know there’ll be challenges, but those just give you a different way to grow.

In good times and in bad

Entering into a family-run franchise takes some planning. And even if you can address the basic concerns, there are some issues you probably haven’t even considered. James Olan Hutcheson of Regeneration Partners, US-based consulting group that works with family-owned and family-managed companies, offers these extra pointers:

  • Have a board of advisors to provide objective advice, and have a buy/sell agreement among the shareholders. According to Hutcheson, 15% of his clients have found themselves in a 50/50 partnership situation where neither party had enough ownership to operate or sell the business.
  • Be sure to have a family employment policy in place. ìThat will tell you how to apply for a position, how you come to work, who you work for, your compensation and how you can be terminated,î says Hutcheson. ìIt puts the business on a professional level as opposed to just a family level.î
  • Prepare for the future with appropriate estate and succession planning. ìLook at how the transfer of ownership and management will occur,î he advises. ìWho’s going to own the stock in the next generation? How the wealth will be divided is a big potential source of conflict. Some people may get wealth in terms of stocks, while other people may get the business. This needs to be considered so you’re not sitting in a crisis moment, trying to go through all this stuff.î
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