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Tapping Former Executives to Start a Franchise: Jim Evanger

 

Jim Evanger’s Story: While Jim Evanger was happy that his wife, Michele Evanger, was running her own interior-decorating and home-furnishings business in the mid-Nineties, he was satisfied with his corporate career as a sales-development executive with a global pharmaceutical company.

Then his company sold his division, and he began to crave more control over his own work life. “That, along with what Michele was doing, turned on the light bulb,” recalls Jim, who quit his corporate job in 1996.

For Jim, another light went on that led to his and Michele’s decision to massively increase the scale of her tiny company, Designs of the Interior (DOTI), by selling franchises. Jim had noticed that service franchises in general were becoming more popular and more successful. And Jim saw opportunity in interior design, where Michele not only provided design consulting but also leveraged those services into the retailing of high-end furniture and accessories.

“The home-furnishings category is a $200-billion-plus (U.S.) business,” he says, “and at the time there was very little franchising going on. I saw an opportunity that hadn’t been tapped – and that still exists today.”

Jim created DOTI Franchising with the infusion of nearly $200,000 in startup funds from several sources, and he’s never looked back. Franchise sales were slow at first, but today, DOTI has 21 franchises – and Jim is aiming at an eventual total of as many as 300. In fact, Jim’s ambition now is to “become one of the top 50 retailers in the home-furnishings industry” in the next three years, and to create a $50-$60 million brand.

“We’re starting to see some breakout growth now,” he notes. “We nearly doubled our size last year, and this year we’ll add around 70% more locations than we finished last year with. We’re still at an early and very dramatic stage in our growth curve.”

Jim’s Key Move: Tapping Former Executives to Start a Franchise

At first, as he marketed the DOTI franchising opportunity, Jim didn’t pursue any particular type of candidate. But he was only about a year into the startup when he realized that his ideal target franchisee would be somebody just like him: a former corporate executive who has been liberated, one way or another, from big-company life, wants to become an entrepreneur, and would be open to pursuing that goal by starting a franchise.

Once he made that decision, Jim says, franchise sales took off. Fifteen of DOTI’s 21 franchisees so far are former executives. “They were coming to me saying that they had so many skills and ideas and experiences that they hadn’t gotten a chance to leverage in the corporate world,” he says. “We gave them that chance.”

Jim says there was a lot more than familiarity at work behind his decision to specifically pursue current and former corporate executives to start a franchise with DOTI. For one thing, he determined that these candidates are more likely to be capable of – and interested in – building a large, multi-store organization rather than just the right to run an individual location. As an entrepreneur who wanted to expand his company quickly, Jim believed he needed franchisees who were accustomed to running businesses of a significant scale.

“These owners aren’t looking to buy a job,” he explains. “If they’d wanted to do that, they could have stayed in the corporate world. Yet, what a lot of franchises offer is only the chance to be the guy behind the counter. With us, you’re the executive: You manage the people and build your organization. They’re looking for something that they can leverage and grow and build equity in – not just be the coin collector.”

But Jim also realized that tagging his ideal franchisees isn’t the same as bagging them. “It’s easy to profile these people but hard to find them,” he admits.

So he hatched a multi-pronged strategy for recruiting corporate types to start a franchise through DOTI. He networks with franchise brokers, whose clients are intended franchise purchasers looking for the right fit with potential franchisors. Jim and staffers communicate with  brokers on the phone, via e-mail, through DOTI’s newsletters and at brokers’ own trade shows.

“We keep them abreast of our evolution, because they want to put their candidates into businesses where those candidates will be successful – because that leads to more referrals for the brokers,” Jim says. “So it’s important for them to see how well our owners are doing.”

DOTI also targets executives and managers in the home-furnishings industry, figuring that they are the ideal candidates for flipping to entrepreneurship. There, Jim’s approach is much more informal, individualized and stealth-like, largely via e-mail and the phone.

Once DOTI and a likely candidate identify each other, they begin a process of mutual investigation that can take a month or more. There is a scheduled phone appointment with the company’s franchise-development staff. DOTI e-mails the candidates loads of documents, including training-program manuals, results of the company’s internal satisfaction survey of existing franchisees, and contact information for DOTI franchisees.

Toward the end of this two-way qualification period, remaining candidates attend a “discovery day” in suburban Chicago, during which they visit local DOTI stores and meet with Jim and Michele.

“By the end of this intense process,” Jim says, “both sides know if there’s a fit.”

One of the last but most important parts of the process, Jim says, is for DOTI to impress strongly on new franchisees that running their own company really will be very different than working in the “cubicle farm” – even when they’ve been running the farm.

“What’s always challenging for people coming out of the corporate world is that once they’re self-employed, they’re wearing all the hats,” Jim says. “They hire people, but ultimately they’re in charge of every single thing. And they’ve usually been such good delegators that they aren’t used to it – to having to recruit every employee, manage the website that we build for them, implement local marketing. Or even clean their own offices and pay the bills!”

But once those who start a franchise understand and embrace this entrepreneurial challenge, Jim says, it becomes clear why he selected them. “These people are business builders – that’s what they’ve learned in the corporate world,” he says. “And that’s what they’re doing now not only for themselves, but for us.”

Jim’s Bonus Insight

Jim figures it’s hard for a startup business to fail – no matter what its business concept is – if the owner has intelligently targeted the aging boomer population in this country.

“They’ve got this tidal wave of discretionary income that they’re going to be spending, and their homes and everything in their homes are at the top of their lists,” he says. “I can’t think of a better market to target over the next 10 to 15 years.”