Lead

How many direct reports do you have? Consider these four scenarios.

And Does Anybody Else Know About It?
Keith Gerson has spent more than 35 years in franchising in many different sales, development, and leadership positions. Now at FranConnect as president of global operations, he has agreed to combine his personal experience with FranConnect's franchising database to write about franchisor/franchisee relations, growth, culture, technology, and more in an ongoing column.

As we approach the new year, many of us are finalizing our strategic plans and budgets. We've spent countless hours ensuring that every ounce of discipline, creativity, and resources has gone into the effort. Yet, despite an ever-improving economy, too many CEOs will not have achieved the top-line revenue growth they budgeted for 2013...

Wan Kim is a quick study. After graduating from Boston University with a degree in international management, he began his MBA studies at the University of California-Irvine at the crest of the investment-heavy dot-com boom of the late '90s/early 2000s.
"I left school to go back to South Korea and chase the bubble," he says. "But I discovered there's no such thing as easy money." It was a career move that left him thinking hard about what kind of business was sustainable.
Kim says he knew people had to eat, and he liked what he saw in the franchise business model. But he wasn't interested in less healthy choices like burgers and pizza. "I had been a regular customer at Smoothie King when I was in college in America," he says. "I thought I could make the concept work here in Korea...

In the eyes of Catherine Monson, the most important role of a CEO is leading and inspiring. "It's critical for the leader to communicate a clear, compelling vision and align the different departments or teams with the company's priorities," says Monson, CEO of FastSigns. "I set the vision, goals, and standards and then work through my team to achieve them."
When Monson took over the 25-year-old brand in early 2009, she put this approach right to work. First on her agenda was clearing up a communication gap between corporate and franchisees. Some franchisees were unhappy with the lack of support they felt they were receiving from corporate, resulting in stalled brand growth.
Monson created a sales incentive program and instituted monthly company meetings for sales updates, program developments, company announcements, and praise for departments on their projects and efforts...

At Fresh To Order (f2o), guests experience a unique offering--flavors and service inspired by fine dining served at a fast casual pace--and at fast casual prices. We created both the concept and the category niche, which we call "fast-fine." Our eight locations across Georgia and Tennessee serve flavorful, fresh, and affordable favorites in 10 minutes for around $10 per person.
Diners have embraced the new offering, and our restaurants have experienced double-digit same store sales growth for the past three years--although, in 2000, when I began contemplating a restaurant concept that fused the speed and inherent benefits of fast casual with the flavors, ingredient quality, and service level of fine dining, f2o seemed like a "crazy idea...

TV Game Show Host Pat Sajak getsBehind New Loyalty Program Franchise Concept
Pat Sajak has been hosting TV's Wheel of Fortune for the last three decades but now he's playing host to a new franchise concept and the payoff could be huge.
Great American Deals is a new variation on the daily deal concept made popular by Groupon. But co-founder Sajak says it's unique because it builds a community of connections between local business owners, consumers, and the franchisee. The goal is ongoing customer loyalty and lasting relationships at the local level.
Franchisees don't need real estate or a lot of equipment with this home-based concept, start-up costs are low - as little as $49,500 - and there are no long hours managing a staff...

Last May Paul Brown made a bold move. He left behind his hotel management career to move into the food service arena, taking over as CEO of Arby's. But it's a move Brown was well prepared to make. He has extensive experience and a proven track record in leading global and franchise brands including Hilton Worldwide, Expedia, and InterContinental Hotels Group.
"What I have learned throughout by career in franchising is it is really a competition for capital," says the 46-year-old. "If a brand provides a great return on investment for franchisees, they will continue to invest and build with that brand." Brown says he loves the franchise business because it's a "relatively straightforward virtuous cycle." He sums it up like this, franchisees make a great return, franchisees invest and build more units, franchisor makes a great return, franchisor invests more in the brand, and begin again...

Meg Roberts says her professional career path changed course into the franchising business unexpectedly. The Michigan native always thought she would be in the advertising business, studied it in school, and went to work for one of the largest ad agencies, BBDO in Chicago, eventually working on major accounts such as Wrigley. But the high stress and long hours weren't conducive to a family and any life outside work. So she moved back to Michigan where she lived not far from Molly Maid headquarters and, as fate would have it, she even knew someone who worked there. One thing led to another and in 2007 she found herself as the director of marketing for the 30-year-old brand.
"One of the things that I came to realize very early on was that franchise marketing is much more complex than consumer retail marketing," she says...

Behavioral metrics is just a fancy way to say, "Measuring the people side of business."
If the concept is unfamiliar, it's because behavioral metrics rarely make it to a P&L. Sure, in most well-run organizations we measure the costs of turnover, employee engagement, and leadership development, but let's take it a step further. For example, think about measuring the difference between the personality profiles of high-performing franchisees and those unable to make the grade. Why are some capable of meeting or exceeding expectations, but others aren't?
By knowing the financial and behavioral gaps that exist between best and worst performers, franchisors can improve their selection of the right franchisee--and influence the performance of existing franchisees...

Throughout my 14 years with East Coast Wings & Grill, we have constantly strived to develop a laser-like-focus on our unit economics. This vision recently led to the creation of a new division for our brand: Unit-Level Economics/QA.
Systems and structures are logical responses to complexity, which grows almost exponentially as a company expands. Within these systems there is data that, if not measured and held accountable, could be the difference between a franchise unit's bottom line or sustaining a positive one: data drives prediction, data holds accountable the result.
The ultimate goal of imposing a new structure and instituting a new system is, of course, predictability. Unless a brand has the ability to determine where a franchise unit is today and project where it might be tomorrow--in a week, a month, this quarter, and ultimately this year--it is not on a trajectory for growth...

Amy Nichols has always loved working with animals. In high school she worked in a pet store. In college she worked in a biopsychology lab with birds. But she always thought she would have to find a "real job" after graduating from college.
"Growing up and living in the Northern Virginia area put me right in the middle of the telecom industry," says the 39-year-old founder and CEO of Dogtopia. "It gave me great exposure to big business--both the good and bad sides--and really helped prepare me for founding Dogtopia." Despite her success in the telecom industry, she didn't find that life fulfilling. That's when she returned to her love of animals and the light bulb went on: there was a big need for dog daycare, and few were providing it...

If you follow the news, you've no doubt heard a lot about the impending rules of the Affordable Care Act (ACA), which became law on March 23, 2010. At the extremes, we've all heard the strong reactions from some franchisees saying the added costs from this act will put them out of business, that they will cut pay, or are unsure how to manage employees to offset the onerous costs the legislation will impose. More commonly in the home care industry, we hear about franchisees concerned about head counts rising above the 50-employee limit, or worried they'll be forced to cut back on hours to keep employees at part-time status.
Make no mistake, though: the Affordable Care Act does carry a great deal of significance for franchising, and it will affect the cost of doing business for franchisees across all concepts...

Resiliency and optimism permeated the air at this year's Multi-Unit Franchising Conference, held at Caesars Palace in Las Vegas March 27-29. In tune with this year's theme--Driving Profitability--these individuals are not only driven, they believe the best is still ahead.
In her opening remarks on Wednesday morning, Franchise Update CEO Therese Thilgen welcomed attendees, saying, "Multi-unit franchisees continue to evolve by facing reality. They're a resilient group that succeeds because optimism is part of their nature."
That set the tone for the next two-and-a-half days, which were filled with high-octane panels and educational presentations and participative sessions--along with hours of networking possibilities...

Peter Holt received an early Christmas present late last year when Tasti D-Lite CEO Jim Amos announced he was stepping down and that Holt had been selected to take the reins of the 25-year-old brand. But for Holt, the moment also was bittersweet.
"Jim Amos has been there with me since I first got into franchising back in the 1980s," says Holt. "He's a dear friend and mentor and I have enjoyed working alongside him all these years."
Holt's franchising career has taken him from his first job with the IFA to Brice Foods (I Can't Believe It's Yogurt! and Java Coast) to Mail Boxes Etc. to a stint with a private equity firm before coming to Tasti D-Lite in 2007. Until last year, he had served as COO at the company, where he led the 2011 acquisition of Planet Smoothie and the integration of the two brands...

Part 1 of this series addressed how to improve attendance at franchisee conventions. Part 2 discussed how to maximize the benefits to your franchisees. This final article explores strategies for taking the momentum generated at your convention into your franchisee operations and using it as a recruiting tool for your next convention. As with the first two parts, we drew on the results of an online survey conducted by Speak!, Ingage Consulting, and Franchise Business Review, which drew responses from nearly 200 franchisors.

Hosting a top-quality, exciting conference can do many things for your organization. For starters, it inspires your current franchisees, sparking and renewing enthusiasm for the business and for the relationship between the franchisees and franchisor...

Applying metrics to the "people" side of franchising

As franchisors, it's your primary responsibility to make operational decisions based on the franchise system as a whole. Being a strategist comes with responsibilities, such as determining the level of your organizational health, monitoring channels of potential threats, and developing action plans that tackle and solve applicable problems and solutions. Sounds somewhat erudite, doesn't it? Based on this thinking, selecting the right franchisee sounds like the least of a franchisor's worries. Wrong. Actually, it's what will make the rest of the workload that much lighter.

The power of personality
As CEO of a firm that creates behavioral metrics and benchmarks, I'm constantly conducting research into the behavioral patterns of successful people...

A strong leader needs to define their vision for success, effectively document it, and communicate it over and over again.
We have two jobs: 1) providing the tools, systems, and products for our current stores to succeed; and 2) spreading the Cartridge World message so more entrepreneurs join our franchise. Motivated entrepreneurs who seek a path to fulfill their financial goals and are able to communicate the value of a product and service will succeed.
We are reinvigorating both our current business support systems and franchise development efforts with the help of focused internal and external people power. We have partnered with a very strong franchise development organization to jump-start this process.

8 workplace values that drive success
Defining, communicating, and living specific values create the culture of an organization...

Sam Ballas waxes eloquently--and passionately--about East Coast Wings & Grill, the company he acquired in 2001. As CEO, he preaches the product's quality and the menu's diversity, lauds the devoted team of professionals he's assembled in the corporate office, and talks about his careful system growth strategy that emphasizes quality over quantity. But he sums up the brand best when he says, "We get it. Franchisees first, then corporate success will follow."
Ballas grew up in a Greek immigrant family that operated restaurants. "By the time you were 12 years old, you were shoved into a restaurant busing tables or running a cash register," he recalls. But he also was learning how businesses operate. His parents wanted him to go to college and have a better life than they had...

When I joined Arby's as president in May 2010, I was eager to once again work with the roast-beef sandwich leader and pioneer, where I served as vice president of product marketing and strategic planning in the early 1990s. This time I had a much greater task at hand. Through the collaborative effort of a new leadership team, we succeeded in restoring the confidence of our franchisees and their employees and reinvigorating our menu. With eight consecutive quarters of same-store sales increases, we are laying the foundation to start growing the brand again.
Part 1 of this series (Franchise Update, Q4 2012) explored the strategic steps taken to bounce back from four years of slumping sales and profits. In Part 2, I discuss how Arby's refranchising strategy contributed...