Stéphane Breault With Imagine Franchise Consultant Inc.

Intro: Broadcasting live from the Business RadioX studios in Atlanta, Georgia. It’s time for High Velocity Radio.

Lee Kantor: Lee Kantor here. Another episode of High Velocity Radio, and this is going to be a good one. Today on the show we have Stephane Breault and he is with Imagine Franchise Consultant. Welcome.

Stephane Breault: Thanks. Yeah. Thank you.

Lee Kantor: Well, I’m excited to learn what you’re up to. Tell us about imagine. How are you serving folks?

Stephane Breault: Oh, okay. I started imagine 15 years ago after a career as a CEO of Franchise Network. We sold the publicly traded company, and I decided to start my own and help franchisors to face, uh, you know, all the challenges that franchisors have and, you know, share my experience, but also share my knowledge and help them to grow. So what we do basically at imagine franchises executive coaching. So I work with franchise CEOs who are owner of the franchise and, you know, network of about, you know, 25 to 200 franchise operation, mainly in Canada. I’m from Montreal, Canada, mainly in Canada, but since the beginning of 2025, aiming to, uh, to work with, uh, American franchises, because we share a lot of things in common. And I really want to help as much people as I can.

Lee Kantor: Now, when you’re talking about a franchise or you’re talking about people who have already got their PhDs, they’re already in the business of franchising, not someone who has a concept that might consider being a franchisor.

Stephane Breault: Yeah. That’s it. So the existing franchisor, so they’re they’re active. They have, uh, you know, 25, 30, 50, 100 units. And uh, mainly I concentrate, I focus on the CEOs because normally that’s that’s where we start. And, you know, Enfranchising, we have a bunch of entrepreneurs and that the tough the toughest part for those CEOs is because, you know, switching from the entrepreneur to the franchisor leader, that’s a that’s a tough call. And I’m there to help them to step up so they can step up and scale up.

Lee Kantor: Now in a lot of cases is does it require kind of a change of leadership because the person who got you there may not be the person who is going to be able to grow the business because they are two separate things. One is creating a concept from a blank piece of paper and then having it grow. And then another thing is taking an existing thing and then scaling it. So do you find that in some cases, it’s best to just kind of leave the founder behind and then just find a CEO slash manager who can take the growth to a new level?

Stephane Breault: Yeah, sometimes, sometimes the discussions, you know, we have this discussion. I’m, you know, depending on the level of the franchise, you know, the number of franchisees and stuff like that. This this can be really true. Say, sorry, but you’re not the guy who will, you know, be the next step. So we might find you a COO or find, you know, you must you must find someone, a general manager, someone who will lead the network. And as a CEO, you will learn to become a CEO with not necessarily an operating role. So that’s that’s the toughest part. You know, uh, that’s one of the one of the toughest challenge. The other the other challenge I see, uh, is the CEO who’s really great. A great CEO, but, uh, the team is too weak. But those people are the ones who help the CEO to build the network to up the up, up to their what they are today. So, uh, you know, changing those people, finding new roles for the introducing new people. It’s it’s really hard to. So it’s kind of both. Boat. Boat. The toughest challenge I see with the CEO in franchise now.

Lee Kantor: Do you work primarily in, um, food, in um services, B2B, B2C? Do you have a niche that you have kind of, uh, kind of a sweet spot in?

Stephane Breault: No, that’s I have a quick service, uh, franchise background, but I’ve been franchisor of other kind of system. And since 15 years I’ve learned a lot about a lot of systems. So quick service is, uh, you know, I know it very well. So it’s not the point. Uh, now I focus a bit more on the wellness, the fitness, the education, uh, and helping people around the house, you know, or so. So it’s more like that, uh, quick service is part of my clientele. Actually. I have what, uh, three clients out of ten, which are in the quick service. The other part is are in other type of, uh, franchise industry.

Lee Kantor: Now, when you’re working with, um, kind of franchisees, uh, how has it changed over the years since you’ve been involved in this industry? I mean, um, I’ve done a lot of work interviewing franchisors over the years, and it just seems like now the franchisor is more of a professional franchisor, where they might have a portfolio of brands that they’re working with, or they might be in one kind of cluster group where they’re just serving, like you mentioned, home. So they could be the doing pool service, they could be doing painting, they could be doing landscaping. They could have a variety of businesses built around this one. Um, homeowner, consumer.

Stephane Breault: Um.

Stephane Breault: But the, uh, I think because of the, the technology, a lot of things are a lot simpler, uh, to, to manage compared to what it used to be. So the information is a lot simpler to get. And, uh, it changes a lot, uh, when you have franchisors with multiple brands to to lead. It’s a it’s another type of challenge. So they need those brand leaders to be a different type of people. Uh, keeping the entrepreneurship in within the network is tougher. So sometimes, uh, it’s not always nice. You know, uh, multi being a multi brand franchisor looks good on paper, but it could be a real challenge because you have your own you know, the first brand you build will always be your favorite. And uh that that’s tough to manage when you look with the large groups which have uh, you know, I mean like large group with thousands of restaurants. I don’t work with them, uh, mainly because I like to. I love to work with entrepreneurs. So that’s that’s why I’m not necessarily looking for a large franchisors like that, but with large groups, the, the key there, I think it’s getting to be more too much financial, not enough franchise oriented. So that’s that’s another culture, which I think is very different. So for entrepreneur who wants to go multi brands, I think they should think a lot about it because it’s a it’s not an easy game. It looks easy but it’s not easy.

Lee Kantor: Now any advice for the franchisors out there that like you said they’re in that kind of emerging where they’ve already proven themselves but they’re maybe are frustrated at the speed of their growth and maybe they’re at 25 and they’d like to get to 100. Or is there a way to attract potential franchisees that you found to be more effective than other things? Is there any advice around attracting, you know, great franchisees to the system?

Stephane Breault: I what I see, which is.

Stephane Breault: The most powerful is share the right stories, the franchisee stories. Stop. Stop saying you’re good. Let your franchisees talk about it and use those franchisees testimonials. Uh, real video, stuff like that. In your recruitment. It’s going to be a lot more powerful than you saying that. You’re a great franchise and you got the best business model in the world. That won’t be. It’s not as effective as making sure that you let your franchisees, uh, be a brand ambassador and and having them talk about it. The rest is more, uh, you know, everybody wants to grow, uh, growing fast is not necessarily good. Um, growing too fast is not good, that’s for sure. But, uh, you know, there’s a speed there, and there’s kind of a time, you know, time. Time will help you. So growing fast. Too fast. You don’t have the route. So it’s to support. So it’s going to be tough. You know it looks good. But then a year or two after, it’s, uh, it’s not good. So so yes, it’s fun to grow and to grow fast, but making sure that you follow the the real path and it takes, you know, people look at the franchise and say, how come they got 500 units? Well, but they’ve been around for 25 years. You’ve been around for five years, so don’t expect to be a 500 franchisees in five years. It’s not realistic. So it’s it’s tough to get the right one. So steady growth is probably the best the best thing to do compared to growth to rapidly. Then you get other business model like ads or regional, uh, franchisees or whatever. But that’s that’s technical. The point that I want to say is as a franchisor, you want to grow, make sure that your franchisees are your brand ambassadors, and the steady pace is more important than the speed.

Lee Kantor: Now, are there certain qualities you look like look for in a potential franchisee? If you’re the franchisor, are there some must haves and some some red flags for you. Like, do they get extra credit if they’ve already been a franchisee at a different brand, or is that a negative in your mind? Do they have to, um, you know, have run a business or is that a negative? Like, what are kind of the do’s and don’ts of choosing the right franchisee for the franchisor?

Stephane Breault: That’s a good question. Um, depends. I would say depending on on the type of franchise, uh, being in having been in business before is a good is a good, uh, asset. Uh, some some not necessarily. But uh, depending on the type of franchise, uh, the the question about, uh, are you a have you ever been another franchisee in another system, or are you still active in another system and wants to, you know, acquire a franchise of our brand? That depends on on the character of the person. And the character takes time to discover the character, so it’s not a fast process. So, so my my advice to all franchisors is take the time you need to know the person before trying to get to a deal. You know and know the person is not 1 or 2 interview. It’s more than that. So so you you need to make sure it makes sense for both of you. Because otherwise, you know, it might look good. So you you sell a franchise. But if if you have a how can I say if your franchisee is in the mentality of I’m the buyer, I’m the client, you’re the you’re the supplier. It won’t go far. So that’s that’s what I see often.

Lee Kantor: Now, um, when you’re working with the franchisors, what are kind of some signals to you that, hey, this franchise has some legs. Uh, what are some milestones or markers you like to see where you’re like. Okay, I can see this one. We got a chance on this one. And then maybe the flip side of, okay, if this is happening, that’s kind of not great.

Stephane Breault: Mm. Um, the first one is, uh, the quality of the, uh, the differentiation in the marketplace. I don’t care if you sell, uh, great burgers, but if you cannot differentiate yourself in the marketplace, um, you’re going to be like everyone. So it’s not a it’s. So I’m looking for differentiation. The other part is because they already have franchisees, I work with franchisees, and I ask my clients to to give me the financials of the franchisees. I want to make sure that the franchisees are making money. If they’re not making money, we won’t talk about growth. We’ll talk about let’s make sure those guys make money. See? So depending on the situation, uh, if it’s too bad, that’s another thing. But that’s also the other factor too, that I’m looking at is, uh, the the qualification, the franchisee qualification process. If it’s too thin and, you know, like, oh, you got the money, so let’s go and move on. Uh, probably I won’t work with this kind of franchise. So I’m looking for brand builders and not promoters. So someone who just wants to sell, sell, sell, sell franchise to be able to sell to a larger organization won’t won’t be my client, that’s for sure. I really love to work with brand builders who will, uh, put not only their heart, but also their head into it and, and, uh, work for, for the long term of their brand and their, their franchisees.

Lee Kantor: Now, is there a story you can share about, um, a franchise that came to you or franchise leader that came to you and you were able to help them get to a new level? Don’t name the name, but maybe share the challenge that they were having and how you were able to help them?

Stephane Breault: Yeah. Uh, just one, uh, just, you know, five minutes ago, I was with him as a, as a, you know, a CEO, and I coach him, uh, he recalled me three years ago when we started working together. Uh, he defined himself as being a restaurant operator, opening restaurants. Okay. And his view of franchisor was very limited on, uh, you know, get those guys to do the job, and we’ll take care of the take care of the rest. And today, three years later, uh, he’s opening one franchise, uh, every second week, uh, two weeks, 111 per two weeks. Uh, and it’s slow. It’s growth a bit because of the capacity of his team to absorb everything. But once every two weeks, he open a franchise. Uh, the the philosophy is the culture changed a lot. The franchisees are a lot more, uh, engaged and responsible. Just for an example, the franchisees are making their, uh, their audits themselves. And, uh, the business, uh, advisor, which we call success coach, uh, in this network, uh, are working with the with the franchisees, uh, based on their evaluation of their franchise and not on their, uh, franchise performance report. So it’s it’s another way to look at it. And they really improve the quality and the the success, the, the, their, uh, throughput there in, in quick service. Their throughput is, uh, is, uh, phenomenal. Uh, they just, uh, share with me that last month the, their, uh, comp sales were plus 37. Uh, so that’s, that’s massive. And and they just did you know, they’re doing the right stuff because they focus on the right the culture. The mission is clear. The the the the values are here and they work with their franchisees. They don’t work like a franchisor telling stuff to their franchisees. They work with a franchisor working with the franchisees to make things happen.

Lee Kantor: Now, do you have any thoughts about, at least in the United States right now, there is a drive for more private equity firms and these large financial conglomerates that seem to be scooping up a lot of franchises. Can you share your opinion of whether that’s a good thing, or that’s something that maybe has some unintended consequences down the road that we might be dealing with?

Stephane Breault: Same thing in Canada, by the way. Uh, so, um, I think on the value, you know, on one side for the franchisor work, you know, ten, 15, 20 years to build a brand. And, you know, it’s great because they can have a lot of, uh, you know, the wealth creation is, is is massive. Um, Uh, what I’ve seen so far is some are great because they let the, the, the, the management in place and they’re trying to not to disturb the culture. So some fun. You know, I a couple last year I worked with with one investment fund who acquired a franchise network in Canada. And the reason I work with them is because they have a philosophy of you let the management do what they do and you help them to succeed. And we’re not there to control the operations. So their philosophy was a lot more, uh, effective. And to making sure that the changes of ownership was not destructive. So that’s that’s one of the things. So some are more disruptive, some are less. So I think that the ones who are less will have greater success, because what I see with the others. And we, you know, I have a couple of examples of franchise network who were super good with the owners. They’ve been sold to a large investment fund, and two years later, nothing is working. You know, it’s all the culture. People are gone. Uh, I can talk about the famous chain in Canada who’s been bought by, uh, an American investment fund a great deal for for the shareholders. But, uh, you know, now you look at this chain and it’s it’s now an ordinary chain. And it used to be an extraordinary chain network. So sometimes it’s, you know, it’s ordinary. And I think we will we will, you know, this is a timing for that. Uh, I think we’ll see a lot of resale of those networks because the investment fund, uh, will will not be able to generate the value that they were looking at.

Lee Kantor: Yeah, that’s what I’ve seen as well, where the, you know, when you get a bunch of math people into a room to try to to buy a brand, like you said, the importance of the brand and the differentiation, and they’re just looking at it from a standpoint of mathematics. You know, then it makes sense to, okay, let’s get rid of one pickle. Let’s get rid of, you know, instead of this type of, uh, ketchup, we’ll use this type of ketchup because we’re going to save a penny. And then all of a sudden you just suck the personality out of the brand.

Stephane Breault: Yeah. And it’s, you know, uh, one, one thing managing a franchise network with a PNL is probably the worst thing to do, because franchise network is not about. It’s about the people we’re creating everyday, the experience with the consumer. So if you if you just manage by the PNL, you know what? It’s not about the numbers. It’s about, you know, the top numbers. And franchisees will make the money if it’s a good system. Them, uh, and you help them. But the day you decide to cheap or to, you know, just to look at it from an ROI perspective or for a EBITDA perspective, you get into a situations where you lose the the faith. One of the critical in my book, I talk about, uh, franchise Excel, which is my the model I use to, uh, to work with my clients. But there’s a part which in there which I call the formula of success. And the first, the first part of the formula of success is faith and faith, not in God, but faith. Faith in the, the, the, the network, the the franchisees, the management’s working together and so, so, so. And when you buy, when large large investment fund buy, the faith is going away. So the the one of the key essential part for the success is just going away, people. You know, the management is gone. People change and it’s now just a job and stuff like that. So you know, it’s it’s it’s sad for a lot of network. See.

Lee Kantor: So yeah I mean it’s tempting like you said because it can be a lot of money for a handful of people at the top, but it usually doesn’t trickle down to the franchisees who are really the heart of the brand after after the franchisor has kind of created it, but the franchisees are living it in different markets around their country, so they’re the ones who take the hit. They don’t get any of the financial benefit. They just take the hit from that transaction.

Stephane Breault: That’s sad. So yeah, but I’ve seen some good I mean like, uh, good transaction and make sense and help the as a matter of fact, you know, help to grow the franchise. The at the right level so they could have, you know you know, benefit franchisee could benefit. But too often I see just a PNL Personnel management and just financial. Just looking for the return and the exit strategy. Uh, so growth for, you know, some those investment funds, their horizon is, you know, 5 to 7 years. So, uh, you know, in franchise, uh, you can do a lot of damage in five years, right?

Lee Kantor: And that’s and that’s when they’re buying it. They’re looking to offload it at some point. It isn’t somebody with a dream that is like, hey, I’m gonna, you know, build this world, uh, based on my idea. These people are it’s a financial transaction that they’re looking to get out of it at some point. So that means the numbers have to keep going up, or else they’re going to lose money and they don’t want to do that.

Stephane Breault: So what they do, they force the, uh they will force growth. They will force everything to, uh, to make sure. But that doesn’t mean that it’s going to stay and it’s quality, and franchisees will pay for that. Most of the time. That’s right. You’re right.

Lee Kantor: So if somebody wants to learn more about your book, the franchise Excel system, um, or just coaching from you or somebody on your team. What is the website? What’s the best way to connect?

Stephane Breault: Yeah, the best way to connect will be with my, my website as uh, imagine franchise.com. Uh, and then you’ll, you’ll find me and we can have a discovery session talk, uh, you know, whatever are the issues and see what we can do or not together. And, uh, in all respect of, uh, what I the entrepreneurship and the entrepreneur.

Lee Kantor: Good stuff. Well, Stefan, thank you so much for sharing your story today. You’re doing such important work, and we appreciate you.

Stephane Breault: Thank you, thank you.

Lee Kantor: All right. This is Lee Kantor. We’ll see you all next time on High Velocity Radio.