Turnaround Talent: How One Franchise Operator Cleaned house and Turned it Around

Dave Melton has learned more than a few lessons during his 28 years as a multi-unit franchisee. The Domino's Pizza operator has ruled the New York DMA, and in 2009, his units took over the number one slot for sales in any Domino's market. All this while his stores generated annual revenue of $6 million.

Melton's recent book, Hire the American Dream, is filled with insight and anecdotal stories from his years of franchise experience. Building a great team of employees is paramount to his success and it's the general theme of the book.

Hiring and firing are crucial elements to any franchisee's success. Like many operators, Melton learned his hiring and firing lessons the hard way. During his first year as a franchisee, Melton says he was working 80-hour weeks and in his haste to get his stores staffed, "I didn't make the kinds of hiring decisions I should have." Some of his employees were argumentative, disruptive, and a few even stole from the store. As a result, he says he learned to fix hiring mistakes - fast.

Considering the importance of hiring and firing, here are 5 ways Melton learned to turn around a troubled work team.

1. Find the right solution for dealing with problem employees. "I always want my managers watching that bottom 10 percent of our employees and working on either improving them or replacing them," he says. "That way our team is always getting better." He recommends trying to salvage problem employees before letting them go. Perhaps they need a bit more training or direction to find their place. Always document meetings and conversations with employees, says Melton.
2. Spend more time on recruiting and interviewing. Melton says smart hiring is a skill that requires a significant investment of time. "My employees were the ones who were going to make the pizza and interact with my customers, so I had to get this part right," he says. What's more, he discovered that when he invested time in getting and keeping quality employees that it improved overall morale for his teams. Good people like working with other good people.
3. Problem employees are worse than you think. Melton discovered that problem employees may not steal directly from the company, but they steal in other ways. He says problem employees can not only drive away great employees but they can also drive away customers. "Not only do they not pitch in and help, putting more stress on the rest of the employees and creating animosity with their peers," he says, "just imagine how they'll behave with a customer they think they won't ever see again."
4. Avoid Rejects by Checking References. Since the restaurant industry has a notoriously high turnover rate, Melton says be careful when hiring employees with previous experience. There are, of course, valid reasons for leaving an employer but your job is to check references thoroughly. It may only take a 5-minute phone call to save a lot of grief.
5. Happy Employees Make Great Recruiters. When employees are having a great time, love their jobs, and everyone is successful, it makes for a great recruiting tool, says Melton. "I actively encourage my best employees to recruit their friends," he says. He adds that "sweetening the pot" by offering a recruiting bonus can also create a win-win situation.