Franchise coach superheroes cannot fly without an airplane (and some can be found there very often), and they won’t be found wearing capes or spandex (other than on Halloween). But every franchise coach needs to have superpowers to help their franchisees and to drive performance. Here are 3 Franchise Coach Superpowers and how you can overcome their related weaknesses.
1. Captain Intuition
This coach is very intuitive, and has a natural sense about what the franchisees need. Almost always coming from a sales or service background, he has a high EQ, and is typically very popular among franchisees.
Related Weakness: Captain Intuition may be so good spontaneously or “on the spot”, that he may lack discipline in the planning department. Providing this coach with planning tools with intuitive workflows is a must.
This super-hero is the lady to go to when a franchisee is in trouble. She is always cool under pressure, and knows exactly what to say to have her franchisees go from chaos to confidence. Highly resourceful, this coach uses all tools at her disposal to get franchisees where they need to go , whether it be head office resources… and beyond.
Related Weakness: The “dark side” of resourcefulness is a coach who may struggle to follow procedures. Arming her with powerful audit tools can ensure she stays consistent with the brand.
3. Doctor Do-Right
This coach is the “go to” person when it comes to procedure and important details on legislative concerns such as food safety or compliance with other state or provincial standards. His secret weapon is his electronic checklist, and he has a sharp eye for detail – solving problems before they start.
Related Weakness: Rule-following, when taken to its extreme becomes rigidity. This coach may be challenged to “think outside the box”. Getting this coach inspired by best practices of others, or better yet, baking them into project management tools can be a great way to help.
The Coach Dream Team
Do you recognize any of these heroes? The good news about working as a team, is that everyone can balance out each others strengths, and related weaknesses.
Quality is king in 2018 and Recipe Unlimited (formerly CARA Operations) continues to make meaningful investments in technology to strengthen its top spot in the Canadian marketplace. While Recipe’s brands such as Swiss Chalet and Harvey’s are leading the Canadian restaurant scene, to maintain that competitive edge technology is key.
FranchiseBlast’s Brand Consistency solution was selected by Recipe to help them reinforce their #1 position as Canada’s largest full-service restaurant company. Recipe both franchises and operates restaurant brands including Harvey’s, Swiss Chalet, Kelsey’s, East Side Mario’s, Montana’s, Milestones, Prime Pubs, Casey’s, Bier Markt, and Landing restaurants.
The Gatineau-based technology firm helps franchisors create consistent operations on their audits, where a coach runs a high-tech checklist of compliance items such as food safety, quality, service and more. It offers immediate, actionable insights for both franchisors and franchisees, and even creates leaderboards so brands can celebrate their operational superstars.
“I see a quiet but meaningful revolution taking place in the restaurant industry.” says Jason Kealey, President of FranchiseBlast. “Good is no longer sufficient. Operational excellence is key to winning and retaining today’s customer; even leading restaurant brands are looking for that competitive edge with brand consistency – that is what our software is all about.”
The versatility of FranchiseBlast’s solution has helped it find success in the restaurant industry. Working with Canada’s iconic restaurant brand aggregator strengthens their position globally.
“Franchising is undergoing a major transformation right now,” said Kealey. “Franchisors are focusing on unit-level economics, both top and bottom line, to help units grow.”
Since 2007 FranchiseBlast has helped franchises in their quest for operational excellence. Integrating best practices from some of the world’s best-known brands, FranchiseBlast combines elegant usability with turn-key quickstart programs. FranchiseBlast’s clients include brand aggregators such as Focus Brands and individual franchise brands such as Pita Pit and Tropical Smoothie Café among many others.
Several food safety scares in the 1990s, prompted franchisors across the world to pay more attention to better compliance. During this time, Sonic’s Chris Galuskin helped roll out a food safety initiative that was so successful, that health safety authorities in some regions allowed crew members to skip wearing gloves. We talked to Chris about the “20/20 rule” that he helped Sonic implement, and how people today could roll out something similar.
What was your role at Sonic and what is it today?
Chris: “At the time I was a Franchise Consultant and it was the greatest job that I ever had. Sonic is a great company and I had a lot of fun. I eventually wound up becoming a Director of Operations. Later, I worked for franchisee out of Louisiana as a Director of Operations. Today I do some consulting and connect with people across my ever-growing network.”
What interested you initially in the franchising community? Chris: “I just love it. You’re dealing with people who are entrepreneurs – they are always thinking outside the box. I love seeing people become successful, especially when they either use your idea entirely, or they adapt bits and pieces from it. Sometimes it is about helping them see what is right in front of them and that look in their face of “wow, I didn’t even know that”. Those things are really energizing for me.”
Thinking back to that time, of the late 90s, what prompted the renewed interest at Sonic about Food Safety?
Chris: “We had this initiative, which was a national drive, and we really adopted it and made it our own. That was the ServSafe testing and certification. We really ran with it and our passion was to get everybody that was running a shift in the brand was to be ServSafe Certified.
“The first thing was to get our internal staff to be certified and train others, so it was a “train the trainer” model. That’s what really drove our interest and we started to really dig down deep into what Food Safety really was, and what that meant to us. We wanted to put a stamp on the brand. “
According to the ServSafe website, “the ServSafe Food Safety Training program leads the way in providing current and comprehensive educational materials to the restaurant industry. More than 4 million foodservice professionals have been certified through the ServSafe Food Protection Manager Certification Exam, which is accredited by the American National Standards Institute (ANSI) Conference for Food Protection (CFP). “
Stef: How would you describe your program?
Chris: “The program was called the “20/20 rule” which was where the company empowered the franchisees and their staff to wash their hands every 20 minutes for 20 seconds. It caught on with our franchise network and their teams. We would set a timer and we would put people in on the schedule and we would write a number or a letter next to that name. Participants knew that when the bell went off for group “A”, they washed your hands. We tried to pattern it around the fact that everyone could physically wash their hands every 20 minutes for 20 seconds.
“That program became so popular with the local health departments in some counties that they allowed us not to use gloves because we were washing our hands continuously. They were so impressed with it that we became the “poster child” for food safety.”
At that time, how many locations did Sonic have?
Chris: “When we began, we were probably just short of 1,000 units. By the time I left, I physically opened the 2,500th unit on the outskirts of Jackson Mississippi. It was a time of dramatic growth.”
How did you communicate that program and roll it out in a way that it worked at so many locations?
Chris: “One of the great things about Sonic is that they communicated very well. Through our ServSafe training, we physically had 75-80% of the brand rotating through this program. It was a topic discussion in every class we had. That in-turn got back to the unit-level and they shared that information as well.
“We also challenged them to share what the impact was for their people and we wanted them to communicate that back to us. This was shared in some of our publications that we have within the system.”
When you mentioned the communications, is that something that GMs of the restaurant would see, or did you have a publication that went out the front-line staff?
Chris: “The GMs would get to see it, and they would post it on their communication boards. We had small posters that were put up next to the hand-washing stations that communicated that to front-line staff as well.”
What challenges did you have in terms of the program? Chris: “Any time that you are dealing with humans, they always “buck”. They think it is different and they resist the change. But some of those challenges are good because some people come up with creative ideas to complete their tasks. People who are like that and are very curious and eventually they see the results for themselves. They understand why it works.
“Once you get enough buy-in, it becomes contagious. That was one of the things that Sonic was so great at, and still is today. They’re a very happy-go-lucky culture. It is a finesse that reflects in their commercials. They do this Dr. Pepper Sonic Games where they all come together and compete.
“If you are communicating, repeating, enforcing and following up, things become culture. It is part of who you are. It is in your DNA. That particular program eventually became their mantra for food safety.”
Do you think that having that happy-go-lucky culture helped with trust between the franchisor and the franchisee?
Chris: “That is one of the reasons why I loved working for Sonic. They had a sense of allowing you to be empowered for the change in the brand. Your voice meant something. Patty Moore was the President at the time; she was very influential in instilling that type of culture. She was able to talk to the dishwasher and the CEO in the same breath – she connected people. It is a very humble brand. “
If someone was to do something similar, what advice would you give them based on your experience in this program?
Chris: When we did the program, it was labor intensive. It was the most untechnical application that you could imagine, using pencil, paper and egg timers. Today “there is an app for that”. Also – don’t be afraid to ask for help. That is my experience with networking and asking questions. You will be surprised by the answers that you get!
For every Battle Tested Strategy, we do a series of “fun” questions. Enjoy!
What new behavior or habit adopted in the past 5 years has most positively impacted your life?
Chris: “Connecting with people who are like-minded – and it does not have be foodservice or retail. It is finding out what makes them tick and what drives them to do what they do. I think if you get a tidbit of that information, it makes you better. It becomes a “brain rolodex”; it is in there somewhere. You can pull back that information and remember “I talked to someone the other day.””
What is a purchase less than $100 that has most improved your life?
Chris: “A couple of things: One is having the right cord for the right technology. It is priceless, and it is only $10. I am an Apple user and integrating it with other things can be excruciating. The other purchase is getting the best router that you can find. I don’t know if it is because I have become impatient with technology, or because my processes are dragging so much more broadband. But, man I love my router!”
What would you put on a billboard?
Chris: “Learn something new today.”
What book have you gifted the most to other people.
Chris: “It is Andie Andrews The Travelers Gift. It is the best read I have ever had – I literally get goosebumps when listening to the audio version.”
Nonprofit Endeavors work with FranchiseBlast to enhance mission of service
Long-standing national nonprofit Endeavors chose FranchiseBlast to help them maintain quality service for the groups they serve across multiple states and Puerto Rico. Moving from pencil and paper to a digital solution positions Endeavors to provide consistent services across offices while preserving a lower overhead.
“Our goal at Endeavors is to provide key services that empower people to build better lives for themselves, their families, and their communities,” explains Travis Pearson, CEO and President of Endeavors, based in San Antonio, TX. “Using FranchiseBlast will assist us in providing a consistent experience across all of our offices and all of our services.”
“When we looked at Endeavors, they were a non-traditional fit for us,” said Dean Hatzitheodosiou, Sr. Sales Director at FranchiseBlast. “But as we explored it further, they actually have the same needs as the thousands of franchise locations that we already work with.”
As one of their services, Endeavors provides support to veterans who are in housing crisis. Using the high-tech “smart” checklists from FranchiseBlast, they can ensure that Veterans have high-quality services; additionally, that experience is the same regardless of which office they go to for assistance.
“Endeavors is a non-profit that sees value in quality control,” said Hatzitheodosiou. “That makes them a perfect fit for FranchiseBlast.” Franchising, as a community, has many non-profit ties, including Franchising Gives Back run by the International Franchise Association. FranchiseBlast has participated in these events since 2016, most recently in Phoenix.
Since 2007 FranchiseBlast has helped franchises in their quest for operational excellence. Integrating best practices from some of the world’s best-known brands, FranchiseBlast combines elegant usability with turn-key quickstart programs. FranchiseBlast’s clients include brand aggregators such as Focus Brands and individual franchise brands such as Pita Pit and Tropical Smoothie Café among many others.
Minimum wage is going up across many regions across North America and around the world. While many businesses plan to simply pass those increased costs to the customers, according to polls, others are looking to get more efficient. While reducing the labor force can be an incredibly painful decision for any entrepreneur, we have thought of an alternative. Technology can be a way to increase efficiency with the labor that your franchisees already have while maintaining their profitability if implemented effectively.
1. Optimize Shifts
Use technology to spread the shifts effectively, ensuring that your franchisees are not overstaffed or understaffed at any given time. There are tools available that analyze millions of possible schedule scenarios before selecting the right one. Instead of being a complicated task for a local manager, they have one less thing to do. Doing this at the head office level is also a great benefit for franchisees in terms of their investment in the brand.
2. Support Getting Back In the Business
For some franchisees, the wage increase means that the owner has to get more hands-on in the business themselves to keep their profit margins steady. This could be uncomfortable for those who have built a staffed business specifically because they want to have more time for things outside of work that they care about. If a franchisee has not been behind a counter or taken customer calls for a few years, this can be a big change. But, the difference is that the world has changed as well while they were away and it may give them a chance to get creative about their business.
To support them in this endeavor, you can automate some of the franchisee paperwork such as digitizing P&L collection, creating automatic polls or simplifying other processes. Also – as people are preferring asynchronous communication with shifting schedules, having “watch anytime” training or company updates is better than a live webinar.
3. Take Advantage of the Self-Serve and Mobile Revolution
Mobile has changed the way that people shop, eat and connect. For some concepts, customers may prefer to order themselves, as McDonalds has discovered or others may like a self-check-out option at the end of the meal, reducing one task for servers. As posted elsewhere, off-premise is one of the areas that is growing for restaurant, and on-demand apps such as UberEATS, DoorDash and are a big hit with the younger set. Offering your franchisees opportunities to reduce their costs using some of these self-serve options. Interestingly, many of these can happen from the customer’s own device.
4. Implement Benchmarks and Scorecards
Franchisees sometimes get the mentality attached to certain processes, or a “herd mentality” can take place, even if it is not based on evidence. One very promising trend we have seen is the greater prevalence of Unit Level Economics or EBITDA Departments. These teams look closely at the units, and what truly predicts a profitable business. Creating benchmarks based on what is working, and what is not and regularly scoring your franchisees is a fantastic way to track progress, and provide value to your network.
Are You Ready?
Are you ready to start managing minimum wage increases proactively rather than reactively? Contact us to learn about how our scorecards are helping forward-thinking franchise systems around the world.
Gino Wickman’s book, Traction, has taken the franchise world by storm. It was in a session at the International Franchise Association convention in Phoenix in 2018, and it has been the subject of countless articles by thought leaders. For example, according to Eric Stites, CEO of the Franchise Business Review as published on the Franchise.org website:
Wickman’s simple yet genius tool, Vision/Traction Organizer, will bring clarity to the key priorities of any business. Having a clear vision and a detailed plan will dramatically improve your franchisees’ success. PostNet International Franchise Corp., BrightStar Franchising LLC, Moran Family of Brands and ZOUP! Fresh Soup Co. are just a few brands using “Traction” (and companion book “Get A Grip: How to Get Everything You Want from Your Entrepreneurial Business”) to push their businesses forward.
If you aren’t using Traction right now in your business, you may want to consider it. According to Shelly Sun, the Chairman of the International Franchise Association Executive Committee and the President of Brightstar Care as quoted in MSA Worldwide‘s profile:
For us, this means putting the right processes and people in place to enable their businesses to run smoothly without their 100% involvement. Gino Wickman’s book Traction outlines the Entrepreneurial Operating System (EOS) and the steps to help business owners get clear focus on the right people and processes that are essential to the growth and profitability of their business.
Brightstar has invited Wickman to a number of conferences and use the methodology extensively. So – the next time you are at a franchise event, look to the right then look to the left. One of them has likely read or implemented the book in their organization.
What is Traction?
EOS is a set of tools which helps businesses succeed. According to the EOS website:
EOS®, the Entrepreneurial Operating System, is a complete set of simple concepts and practical tools that has helped thousands of entrepreneurs get what they want from their businesses. Implementing EOS will help you and your leadership team get better at three things:
Vision—getting everyone in your organization 100% on the same page with where you’re going, and how you plan to get there Traction®—instilling focus, discipline, and accountability throughout the company so that everyone executes on that vision—every day Healthy—helping your leaders become a more cohesive, functional, healthy leadership team
Although many of these tools can be found in the curriculums of business schools, and franchisor teams may know of them, in reality, many franchisors do not have the structure of the focus to make this happen without a formal process, such as EOS.
EOS and Scorecards
At the heart of the EOS system is a series of numbers, determined by the team as most important, and tracked on a weekly basis at formalized meetings. These numbers are called a “Scorecard”. There are seven truths according to Wickman that make scorecards work:
What gets measured gets done.
Managing metrics saves time.
A Scorecard gives you a pulse and the ability to predict.
You must inspect what you expect.
You can have accountability in a culture that is high trust and healthy.
A Scorecard requires hard work, discipline, and consistency to manage, but it’s worth it.
One person must own it.
Whether or not Traction is the model that you choose to follow, like so many others, do any of these “truths” resonate with you? Would having any of these truths present in your organization help?
The Automatic Scorecard
Released at the 2018 IFA conference, FranchiseBlast was pleased to offer up our custom Franchise Scorecard. Traction devotees, and “numbers people” alike were compelled by the scorecards as a way to simplify the reporting process. Contact us to learn more about how they work and how they can fit within Traction.
It is the hot month of August… but September is around the corner.
As the weather gets cooler, thoughts turn to “back to school” if you have kids, and “back to work” for the rest of us.
I was talking to a few colleagues about this the other day. It seems that even though the “official” New Year is January… it seems like September is the time when we get “back to business”. It is the time when releases get done and decisions get made. Everything about the fall leaves and the cooler weather says “new start.”
So… what will your September look like?
We know our audience of franchising professionals does not always have time to read some of the bestselling business books. If you want to have a quick look at the best, we took some of the most innovative ideas out there, to help you get started in September the right way!
1. Management by OKR (Objectives, Key Results)
OKR (Objectives, Key Results) as described in Measure What Matters by John Doerr shows how the venture capitalist “works”. As one of the original investors in Google, John Doerr is legendary in the Silicon Valley community. The principal behind OKR is simple:
Set tasks to achieve this goal (key results)
Make the tasks measurable
For example, if you sell junk clearing services online. For one location, you want to grow revenue to 1 million this quarter (that is your objective).
Your key results would be:
Get 5 leads/week at $100/lead from Google Ads.
Run a 20% discount advertised in a Direct Mail campaign to 10,000 residents with a repetition of 3.
While a lot of this seems pretty practical, how many franchises really measure what matters, and connect it to key results? With these principles in mind in the context of the field auditing process, you can show it moving from overall organizational goals, to country to region and more.
2. Dare to be Original
One of the best books last year we recently read here at FranchiseBlast was Adam Grant’s Originals. Grant, a very popular professor at the Wharton School at the University of Pennsylvania, brings forward a researched-backed thesis that non-conformists will rule the world. While this can be a tough “pill to swallow” in a franchise world connected to the compliance on systems and processes, the book is an excellent read for the following reasons:
He teaches us that entrepreneurs are not necessarily wild risk takers, but thoughtful people who hedge their bets.
He discusses some of the BENEFITS to procrastination.
Originals try a lot, succeed a lot AND fail a lot. They don’t have better ideas than their peers though they persist much more.
3. Checklist Manifesto
In the Checklist Manifesto by Atul Gawande, we learn about how checklists have taken a number of different fields by storm. Although in the Franchising world we are very familiar with the QSR checklist for food safety, other fields such as Medicine, Finance and Aviation also make great use of digital checklists. This simple management tool has enhanced care, and even saved lives. Here are some interesting pieces to think about:
Work has become incredibly complex as the science behind it has increased. It is impossible, at this point, to expect one person to be the master of a procedure such as an operation, where literally hundreds of things could go wrong. Checklists help capture the complexity behind today’s jobs.
A best practice that was discovered was that medical people knowing each others names before a surgery perform that surgery more effectively. This could extend to franchising, where everyone on a team knows each other’s name can make a big difference.
Having a checklist is not the only important thing – it is having THE RIGHT checklist. The world of aviation has known this for some time, which is why they spend so much time on them. Is the future of franchise manuals a checklist?
If you want professional management of your franchise, you want the effective management tools, especially for franchising. Check out FranchiseBlast’s Franchise Field Audit and Franchise Scorecard tools.
Is it possible to create a career from the ground up in franchising? For Christie Cruz, Director of Operations Support at Tropical Smoothie Café the answer is “yes”. In a recent LinkedIn post that unexpectedly went viral Christie discussed her recent promotion, and how she an entry level job can lead to infinite possibilities.
She discussed her journey from crew person at McDonalds, to being a Manager, to an Area Supervisor at Arby’s and her recently announced position as Director of Operations Support at Tropical Smoothie Café, a very popular fresh-food destination with over 600 locations.
After thousands of likes and almost 100 comments, the idea of upward mobility in a franchising career has clearly struck a cord. We had the chance to ask Christie the following question:
What advice would you give to someone who is on the “front line” right now in order to advance their career?
“It was hard to narrow it down to just one thing. As I reflected on my career and each stage of it, there are 3 things that stuck out to me as the most important: Grit, Accountability and Relationships.
“The restaurant business is fast-paced, results driven and messy at times. You have to have grit (a mix of tenacity, endurance, determination) to get through the grind. You have to love the grind and see obstacles as an opportunity to win not an excuse to lose.
“In any business you have to hold yourself accountable to a high standard of performance. I just taught a class on standards and one of the things I imparted to the class was the fact that until you hold yourself accountable you cannot begin to hold anyone else accountable. People are always looking at the leader to see how they do business, and if they cut corners so will their teams. You have to do the right thing no matter who is watching.
“Lastly, and probably the most important is building genuine, solid relationships with everyone you come into contact with. You cannot succeed in this business alone. You need your boss, your peers, your vendors, your subordinates and most importantly your customers to win.”
On the LinkedIn post, dozens of people in Senior roles discussed their journey from the front lines to Sr. Management.
One Senior Executive commented:
I LOVE seeing fast food experience on a resume. Show me someone who has had a couple of promotions over a couple of years at McDonalds and I’ll show you someone who shows up on time, is honest, and will do what it takes to get the job done. Skills are transferrable, and one picks them up quickly in fast food. Attitude is critical and can’t be taught.
Industry insiders and managers value attitude and a “get it done” work ethic over a long list of skills.
Another commentor said:
Those are great stepping stones Keep them they will always remind you of where you have been and how to find your way home.
This reinforces the idea of staying grounded all the while moving up the chain.
One woman, who worked her way up from cleaning floors and sweeping tables to a Sr. Director position said:
Life and work is often all about attitude and perspective. One can choose to be miserable, even if they are in CEO role and are able to dictate their own agenda, and no one to report to. Another approach would be, to take pride in your work at any level, try to do your best regardless of the task and difficulty level, don’t settle, but always learn and improve. I love the journey, and there is no end destination. It’s like a trip that never ends, and every day just brings a new adventure.
Attitude, perspective and hard work come up over and over in this discussion from some of these top leaders in the franchising community. This type of focus likely had a positive impact on their lives outside of work as well.
In it, we look at the cycle of a field audit, and how each of the phases can be positively boosted through both high tech and and low tech methods. Some of the biggest brands in franchising have already downloaded it, and the reviews have been great so far.
While many Spa and Salon businesses recognize the need to measure KPIs, the truth is many rely more on intuition than analyzing the numbers. While creating an atmosphere, happy clients and happy employees takes fantastic soft skills, “knowing your numbers” will help your spa or salon find its place in the market.
Think of a KPI indicator as a map. You have a destination point, and you have your path, with a giant “you are here” sticker as well showing where you currently stand. You talk to your clients about balance, and the numbers are a big part of the balancing act for any business. Here is a helpful list of the top KPIs for spas and salons.
1. Cost Per Lead (CPL)
Every marketing effort should be tracked, since what gets measured, gets improved. It helps you understand how much you are spending on leads, and if you should continue to invest. For example, if you are getting $25/lead off of Google, and a bunch of traffic off of Facebook, but 0 leads, you should reconsider the time, money and energy you are investing in Social.
CPL = Cost of Marketing Program/Total Number of Leads
Note when calculating, a lead has two main aspects:
They are actively searching for the service
They provide a way for you to contact them for follow up
It is a good idea to put aside a small amount of your budget, such as 10%, to experimental initiatives to make sure your marketing mix is the right one for your spa, your target market and your area.
2. Average Treatment Rate (ATR)
You may think that because your salon or spa is busy, it is successful, but that is not necessarily true. At the end of the month, it is a good idea to get an idea about how much you are making for each treatment as well.
ATR = Total Number of Treatment Hours Sold / Total Number of Treatment Hours Available
As you look at this metric, one thing to take into account is that some treatments take longer than others. So – a 2-hour treatment of $180 is less efficient than a 1-hour $100 treatment.
3. Spa Productivity or Occupancy
With the rent or mortgage costs associated with the space typically being the biggest cost associated with a spa understanding the usage of treatment rooms is an important indicator of how productive your space is.
Spa Productivity = Total Number of Treatment Hours Sold / Total Number of Treatment Hours Available
4. Capture Rate: Retail
Spa and Salon revenue comes from two sources: services and retail sales. According to Winn Claybaugh, co-founder of Paul Mitchell Schools, “Per square footage, the footage devoted to selling products [like shampoo and hair gel] is more profitable than footage devoted to service”.
Capture Rate = Total Retail Guests/Total Spa Guests
5. Net Promoter Score (NPS)
Offering an exceptional experience will not only keep your guest coming back, but they will also tell their friends. Best of all, they may even take a “selfie” of them looking fabulous after their treatment! Technically a loyalty measure, the Net Promoter Score (NPS) is a fantastic way to measure this on a quarterly basis.
This measure compares your biggest fans (promoters) compared to your biggest critics (detractors). Learn more about Net Promoter here.
NPS= % Promoters-% Detractors Your NPS can help you in your marketing efforts, by asking promoters to leave reviews or recommend to their friends and family and it can help prevent churn in terms of the detractors.
6. Repeat Guests
Repeat guests generate a higher return on every dollar spent getting them in the door. Also – practical experience shows that repeat customers tend to spend more on subsequent visits as well. This metric is calculated through the following:
Total Number of Repeat Guests/Total Number of Guests
7. Employee Retention
Customers are more likely to develop a bond with their stylist or therapist than the brand itself. If you have an employee who leaves, you risk their clients moving with them. For this reason alone (even though there are many others), you want to make sure your team is happy. Employee retention is measured as follows:
Total Number of Employees that Left for a Period/Total Employees at the End of that Period
This is a strong indicator of performance because it looks at how good you are at generating revenue, controlling expenses and making strong utilization of your hours.
9. Earnings before interest, tax, depreciation and amortization (EBITDA)
EBITDA is a measure of a spa or salon’s operational effectiveness. It is a way to evaluate a company’s without having to factor in financing decisions, accounting decisions or tax environments. Although difficult to say or even fully comprehend for gym owners who have come up through the health and fitness operations side, it is a key indicator.
EBITDA shows how good your business is at generating cash thus your business is valued as multiples of this metric.
While you encourage your clients to balance mind and body, at the same time, you want to make sure your KPIs are balanced. With FranchiseBlast’s Scorecards, you can track all of your metrics in one place, and modify metrics on the fly. Learn more here…
Pretty much every Franchise Coach has heard this from their franchisees: one of the biggest trends for customers of franchise locations is on-demand food or off-premise. But, as discussed in an earlier post, there are two options when it comes to delivery for the franchisor as an organization, and the franchisees themselves.
Creating ordering capabilities in-house
Using a third-party service or food delivery service app
Today, we are going to look in-depth at the third-party services, and explore key considerations for restaurants in franchising working with these services. There are many new considerations to understand when looking at this trend, and what matters in terms of supporting your franchisees with this transition.
What is a Food Delivery Service App?
Whether it is the ubiquitous GrubHub or UberEATS, high-end Caviar or 45-minutes or less hub, DoorDash, a food delivery service app is more like having a virtual foodcourt in your pocket. There are a lot of these apps right now in a “land-grab” for space, which are both regional and national. If the customer does not have a specific restaurant in mind, they can simply scroll through the app and browse by city, address, cuisine or menu. Do you have a very specific craving for Korean Pork Bone Soup, “Fall Off the Bone” Texas ribs? Well, with a food delivery service app, you can even search by menu item.
If your franchisees are considering signing up for one or many of these services, you will want to take a few things into consideration.
As your Marketing Director will tell you, different areas have different advertising dynamics. For Pay Per Click (PPC) advertising on Google for example, the franchisee in Brooklyn, New York will have a different experience than the one in Tulsa, Oklahoma. Why? Because there is more competition in Brooklyn for just about… everything, driving the cost of advertising up.
The same dynamic is at play in Food Delivery Service Apps. There are some cities that will rely on the most popular apps-only, such as GrubHub or UberEATS. There are other cities where there is such a proliferation of apps, that franchisees need to have several iPads to keep up.
Take Mighty Quinns BBQ based in New York for example. In order to keep up with the different apps they manage their different ordering system using several iPads for each delivery service. For Christos Gourmos, co-founder of the company, he says that the back-end would be the biggest headache – as in – it is not about bringing in the customers, it is about defining who is paying.
The opposite is true for markets where there is no proliferation of apps. For some Australian businesses for example, the 35% premium just one app charges means that the cost of entry is too high.
Finances and Fees
Food Delivery Service Apps offer a challenge for franchisors, because of the added fees can put a lot of pressure on the franchise model. For example, while the apps can offer up to 35% onto the price of a meal, a franchise like Dominos can charge their franchisees just 1% for their delivery service. This is why so many brand aggregators and large franchisors are either building this capability in-house, or are partnering or taking ownership in some of these outfits. For franchisors without this option, here are some things to consider. Note, that all quotes are different according to the application and the region, so the percentages are just for illustration.
Non-Sponsored Post Commission: A “non-sponsored” listing, means you will simply be listed on the site, with no special treatment in terms of priorities. In some markets, it can be 15% for this cost.
Sponsored Post Commission: A “sponsored” post means that your offering will move up in the rankings, and can cost about 20%.
Delivery: While it is possible to use these applications without using delivery, there is an added 10% for the delivery for those who need it.
In franchising, we are able to take advantage of economies of scale – and creating the ability for franchisees to do their own delivery is a great start in terms of helping them take control of the costs. Another strategy restaurants use is to have one price on the apps, and another price in the restaurant or on their own website.
Similar to the “daily deals” website such as Groupon, the risk of food delivery apps is that the customer may move the relationship from the restaurant to the application. The flexibility the consumer gets with the app can be at the expense of the franchisee. As a result, you want that food and packaging to “hook” the consumer so the next time they order they will go directly to the restaurant. Also, the data behind the consumer behavior is lost to the app, meaning some of your market intelligence abilities will be limited.
While most experts see consolidation and specialization in the future, the reality today is that there are a lot of these apps out there. As a result, taking orders from multiple apps will create duplicate data entry, which creates opportunities for human error. Also – the disconnected systems creates some administrative challenges – ones that can create a subversion of royalty fees.
Another new trend noted by McDonalds is that on-demand has created new occasions for eating. They have found that late-night eating is a new “thing” that would not be covered by a standard restaurant operating hours.
One interesting form of consolidation for brand aggregators to consider is the trend of Ghost Kitchens also known as “Virtual Kitchens”. This is where there are several brands under one roof, and it is delivery only. These kitchens are growing in popularity across North America and the UK creating a need for highly versatile chefs, but removing the need for “front of the house” staff.
Restaurants are not going away… but they are changing. One way to navigate change is by having flexible technology that goes with it. At FranchiseBlast, our brand promise is “You set the course, we’ll help you get there. Let’s enjoy the journey.” Our flexible system can move and grow with you, whether you are a traditional brick-and-mortar restaurant or a ghost kitchen. Request a demo to get started.