New Venue, More Content! MUFC draws the industry's best multi-unit operators
The annual Multi-Unit Franchising Conference returned to its regular spring schedule this year in Las Vegas, dealing multi-unit franchisees hand after winning hand of top-quality educational opportunities, brands, suppliers, and hours of peer-to-peer networking opportunities.
The annual event, held March 29 through April 1 at the new Caesars Forum—a spacious, state-of-the-art, 550,000 s.f. venue—provided a fresh look and feel for franchising’s premier multi-unit event.
The conference hosted several world-class keynote speakers, including NFL Hall of Fame running back Emmitt Smith and entrepreneur and author Jesse Itzler. The agenda was packed with general sessions and breakouts led by some of franchising’s top movers and shakers.
As always, the focus remained on providing a forum for franchisees, franchisors, and suppliers to gather, talk shop, and do some business. At the sessions, attendees soaked up fresh takeaways for improving and operating their businesses, and in the Exhibit Hall met with franchise brands and suppliers from across the board.
Despite Covid and spotty airline schedules, attendance held firm with more than 1,800 registrations and a sold-out Exhibit Hall. Breakout sessions were packed, as were the hallways, all abuzz with high-energy conversations. And, of course, the casinos and bars were hot spots in the evening.
This year’s numbers included hundreds of exhibitors from franchise brands and suppliers, along with more than 600 franchisees operating 16,500 units with more than $11 billion in systemwide revenue—and with plans to open more than 2,000 new units in the next 12 months.
For golfers, the conference teed off on Tuesday with the MUFC’s annual charity scramble-style tournament at the Arroyo Golf Club in Red Rock Canyon, high above downtown with a panoramic view of the strip. Back in town, the evening featured a franchisee-only get-together at Brooklyn Bowl on the Linq Promenade, offering franchisees a chance to throw a strike down the lane or to strike up conversations with new and old friends.
Day 1, Let the games begin!
Franchise Update Media Chairman and co-founder Gary Gardner welcomed the packed ballroom crowd to the first full day of the conference. He was followed by presentations from three past MUFC chairs: Michael Kulp, Guillermo Perales, and Cheryl Robinson. Each described the value of the conference to them over the years, and why they continue to attend each year.
Next up was the event’s first keynote speaker, Jesse Itzler, co-founder of Marquis Jet, author of New York Times best-seller Living with a SEAL and one of the owners of the NBA’s Atlanta Hawks. Itzler is a passionate entrepreneur and motivational speaker who drew on his own life experiences to encourage attendees to pursue their desires and prioritize the things that matter most in their lives.
“The limitations we put on ourselves are self-imposed,” he said. “Pain and discomfort make our brains say ‘Stop.’” However, he said, with dedication, determination, and hard work—even failure—you can accomplish what you want to, he encouraged the crowd in the packed room. He wrapped up his presentation saying, “We didn’t come this far to only come this far. Go do what you’ve always wanted to do.” The keynote sponsor was Inspire Brands.
Following a short break, a general session panel entitled “Strategies To Attract, Recruit, Retain, and Grow Top Talent” took the stage. Multi-unit franchisees Gary Robins (Supercuts), Michael Kulp (KFC, Taco Bell, Arby’s), along with Aziz Hashim (managing partner of NRD Capital) and Ashley Hollweg (CEO of Hollweg Assessment Partners), discussed today hottest HR issues.
The conversation ranged from how post-Covid technology is affecting recruitment to how to provide better opportunities for employees so they’ll stay. “You’d better be using gamification as a way to train your employees because that’s what they want,” said Hashim. Robins added, “Before you implement any new technologies, you must have good processes in place.”
A working lunch keynote session followed with Jim Sullivan, CEO and founder of Sullivision.com, who walked franchisees through his proven processes for multi-unit leadership. Drawing on his 20 years in the hospitality and retail industries, he blended in the impacts of Covid to outline what he called “The 5 New Rules of Leadership.” He provided attendees with specific strategies and tactics to find, build, and retain high-performing teams by keeping them engaged.
The remainder of the day’s educational offerings came in the form of breakout sessions that included “Build Your Infrastructure for Growth,” “Changing Consumer Behaviors,” and “Advancements in Operational Service Systems.”
The grand opening of the Exhibit Hall with plenty of food and drink soon saw the room abuzz with lively conversations to cap off a day of powerful content.
Day 2—sessions and inspiration
Breakout sessions were the order of the morning. Attendees chose from topics that included “Due Diligence for Choosing a New Brand, Segment, or Service System,” “Create Your Playbook To Grow Internationally,” “Strategies and Tools to Build Customer Loyalty,” and “Adapt to Current Market Changes.”
Attendees reconvened in the general session for an inspiring keynote from NFL Hall of Fame running back and three-time Super Bowl champion Emmitt Smith. In his easygoing storytelling style, he told the packed room how playing football taught him important life lessons, many coming from his coaches, others from his teammates, and shared them with the rapt audience. In a dream-come-true, real life fairy tale, he recounted how, as a young boy in Florida, he’d seen the Dallas Cowboys on TV and told his father he was going to play for the Cowboys one day. In high school, he actually did attend a Super Bowl in person at the Rose Bowl, where he told a friend that he was going to play in a Super Bowl there someday. As the rest of the story goes, he did go on to play for the Cowboys—in a Super Bowl—at the Rose Bowl.
“Success can be achieved by setting goals,” he said. “Write your dreams down and they turn into goals. Face the fears you have. Be aware of the people helping you along the way, and prepare for challenges and opportunities. That’s how you achieve success.” The keynote sponsor was Smoothie King.
Following Smith (a tough act for anyone to follow!), customer service guru John DiJulius took the stage to deliver a session called “Elevate the Guest Experience.” Addressing today’s labor shortage, he said, “Customer satisfaction is sinking like the Titanic. It’s at a 15-year low.”
Despite the Great Resignation, he encouraged attendees to maintain their hiring standards to keep up their levels of customer service. “Don’t fill positions with just anyone,” he advised. “Don’t keep poor performers.” He emphasized the importance of creating a healthy culture, being transparent with customers, and creating a “signature customer experience,” despite all.
Next up came the much-anticipated presentation of Multi-Unit Franchisee magazine’s MVP Awards. Winners were revealed and recognized with plaques presented to them on stage before a packed, and appreciative, general session audience. Read their individual stories in the pages of this magazine.
The economic outlook
FRANdata CEO Darrell Johnson took the stage next to deliver his annual State of the Economy presentation. “The global economy in 2022 is weaker than expected and inflation will stay longer than we thought,” he said. “Franchise growth should continue, but it will be at a slower pace.”
Citing research from the IFA/FRANdata Economic Outlook report, he noted:
- In 2021 total revenue generated by franchised businesses improved by 16.3% to $787.7 billion.
- Unit growth this year is projected at 2.2%, reaching 792,014 domestic franchise units, an increase of 17,000 from 2021.
- Franchise employment is forecasted to grown at a rate of 3.1% and recover to pre-pandemic levels, representing a net gain of 257,000 jobs over 2021.
On the labor front, he said there was “labor pain” across all of franchising, putting a considerable constraint on system growth. The biggest labor issue reported was the quality of today’s labor pool.
Private equity involvement in franchising continues to increase, he noted, with a record number of M&A deals in the franchise space in 2021: a total of 141 brands changed ownership, nearly doubling the previous high of 74 in 2017. PE firms, he said, are expected to be “hyper” active in 2022 as they continue to grow trust in the franchise business model and seek deals with franchise brands and larger multi-unit operators.
In addition, buoyed by firm consumer spending, government stimuli, and cheap credit, franchisors backed larger deal sizes. The average deal size hit a 3-year record in just the first few months of 2022, rising from 8 units in 2019, 7 units in 2020, and 10 units in 2021 to 19 units so far this year. MUMBOs (multi-unit, multi-brand operators) will become ever larger, driven by brand diversification, consolidation, and retirements in a tumultuous global economy.
On the financing front, so critical for brand growth, Johnson said underwriting challenges are slowing lending, as are high borrowing costs and increasing interest rates. Lenders are being more cautious than they have been in recent years, unsure how much government assistance is responsible for positive numbers from both brands and franchisees. They are adopting a wait-and-see attitude until more of the dust from PPP, EIDL, and other government assistance programs settles. He recommended brands—and lenders—use the FUND credit scoring model to gain greater clarity in their decision-making process.
Another general session panel took the stage with a panel called “Growth in 2022 and Beyond—Offense or Defense.” David Paris (Rent-A-Center, Rim Time, Popeyes) moderated a panel consisting of Dawn LaFreeda (Denny’s), Eric Danver (Hand & Stone Massage), Nate Garn (Sizzler, Little Caesars, Dunkin’, Red Robin, Wingstop, Jersey Mike’s), and Roland Spongberg (El Pollo Loco, Wendy’s, Denny’s, Krispy Kreme, Blaze Pizza). Their conversational Q&A approach included engaging discussions on the strategy of new development versus acquisitions and the pros and cons of each. Other topics ranged from access to capital and labor market challenges to inflation and supply chain shortages.
The day once again concluded with drinks, hors d’oeuvres, and more buzzworthy conversations in the Exhibit Hall and beyond.
Day 3, closing workshop
The conference wrapped up with a well-attended morning closing session entitled “M&A Workshop: Prepare Your Business for the Next Step.” With the increase in M&A activity (see above), the workshop focused on the fundamentals of preparing your multi-unit organization for both sales and acquisitions in the coming months and years. The panel of M&A pros consisted of attorney Kevin Hein, co-chair of the Franchise and Licensing Practice Group at Akerman; John Goldasich, managing director at Arlington Capital Advisors; Eric Schnyder, managing director of MUFG’s Restaurant Finance Group; and Adam McKean, director at Levine Leichtman Capital Partners.
The panelists laid out some basic strategies and tactics for business sales and acquisitions, noting the critical importance of rigorous due diligence, transparency regarding any past errors in company financials, and the how to develop the key relationships necessary for buying and selling units.
Franchisees liked what they saw and heard at the conference. “I’ve been coming to this show since 2006. I realized how forthcoming everyone was, how much they share, and this even changed my life,” said Greg Thomas, a Great Clips multi-unit franchisee.
“This is one of my favorite conferences to come to,” said Dawn LaFreeda, a multi-unit Denny’s operator and general session panelist. “I especially love the trade show, and I love the speakers and the panels. I think it’s just a great show.”
The 2023 Multi-Unit Franchising Conference will return to Caesars Forum in Las Vegas next April 25 to 28. For more information, visit www.multiunitfranchisingconference.com in the coming months.
CONFERENCE BY THE NUMBERS
Aggregated statistics from the 2022 MUFC
- 1,800+ Total attendees registered
- 600+ Franchisees registered
- 200 Brands represented
- 16,500 Operating units
- 50%+ 2 or more brands
- 16% 4 or more brands
- 80% 3 or more units
- 60% 10 or more units
- 20% 40 or more units
- $11 billion+ Total annual revenue
- 75% Franchisees seeking new brands
- 2,000 Units opening in the next 12 months
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