Monthly Archives

June 2018

3 Tips on Rolling Out an Effective Franchise Scorecard Program

By | Franchisee Scorecard

Franchise Scorecard ProgramOne of the biggest challenges to rolling out an effective franchise scorecard program is getting buy-in for KPIs. A lot of time both franchisors and franchisees can see the need for them but are concerned about making any significant changes outside of the original franchise agreement. Here are some tips based on what is happening in the franchise community right now.

1. Document Process of Developing KPIs

It is important to remember that franchisees are independent business people and need to understand the rationale behind the numbers. That is why the favourite question of your best franchisees is “why?”. If you carefully document how the KPIs will enhance the brand of the system and how it will benefit each individual location, you can have your bases covered in terms of KPIs. The KPIs were not pulled from thin air – they were based no the franchisor’s reasonable judgement on key success factors.

Now, more than ever, you probably hear your franchisees complaining about competition. So – talking about how the KPIs were developed to beat local competitors is a great way to get buy-in.  After all, you are proactively solving problems for your franchisees, which is a key value-add of being part of the system.

2. Seek Franchisee Buy-In Before Implementation

The best-case scenario is to get your Franchise Advisory Board (FAB) to co-create your KPIs with you. Interestingly, these successful franchisees can see the weaker ones as hurting the brand and their own investment. Getting your FAB to develop the KPIs with you and even connecting them with roll-out communications such as newsletters, webinars and social media can be a powerful tool for compliance.

If the FAB is not engaged in the initiative, having some of your larger franchisees adopt the KPIs ahead of time can also be a great boost for the initiative.

3. Use a “Carrot” rather than a “Stick” for Compliance

Encouraging positive behaviors, rather than punishing negative ones is a good rule of thumb in general, but it is more important than ever in franchising. Potential rewards include:

  1. Eligibility for expansion.
  2. More AdFund or PR support.
  3. Being in the “spotlight” on webinars, internal case studies and social media.

All of these are great rewards and creates a positive energy around your program. It also mitigates the risk of a dispute.

Ready to Get Started?

FranchiseBlast’s Scorecards were built especially for franchisors and we have a deep understanding of this environment. Reach out to us to learn more about how Scorecards can help your franchise business.

Thanks to the presentation from Higher Logic for some of the inspiration for these tips. Ron T. Coleman, Jr. Parker Hudson Rainer & Dobbs, LLP Elliot R. Ginsberg Garner & Ginsburg, P.A. Sarah A. Walters Perkins Coie, LLP.



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5 Signs that You Need a Franchise Scorecard

By | Franchisee Scorecard

Franchising is one of the most exciting communities in the world. There is no other place where there is so much entrepreneurship, creativity, and people who care about making a positive impact on their communities. But, that excitement can fall short when it comes to the every-day business of metrics and measurement.

When you have an organization full of people who are passionate about soft skills such as helping others grow, teaching, inspiring and creating positive change, it is tough to turn around and make them do something as mundane as staring at the numbers. But, seasoned veterans of the industry know how important it is to “know your numbers”, and getting to know them may be easier than you think.

1. Everyone Is Not on the Same Page

In a distributed organization like a franchise, people get in the habit about talking about the same things in different ways. It is tough to get training, marketing, field operations and even your multi-unit owners on the same page when all of them think differently. It is important to be “one franchise” rather than dozens or hundreds of small, local businesses. Having a single goal, reflected in a franchise scorecard, is a positive way to build consensus in the organization.

2. Franchisees and Team Members are Getting Disengaged

People like to have a sense of meaning in their workdays. If goals are misaligned, people can be told one thing by their manager, but hear something else from home office. This creates a “no win” situation for the person on the front lines, where they don’t know what winning or losing is. Having a scorecard, and everyone aligned with it helps people understand how they can best contribute.

3. Excel and Google Sheets Rule You (Rather than You Ruling Them)

In a lot of franchise organizations, there is a ton of intelligence that sits on the hard drives of individual computers. Have you ever had turnover, and had to frantically break into a computer to find a key tracking spreadsheet? How about phoning and texting former employees, trying to get access to that Google Sheet? Excel leads to silos and while these tools are getting more collaborative with Google Sheets the knowledge is often in many different places and difficult to reconcile. Having a scorecard means that the information is all in one place, and the right people have the right access.

4. Goal Planning Happens in Silos

A simple, clear, visual aid, when implemented correctly, can do the following:

  • Gives franchisees and team members clear goals to keep in mind while working on projects.
  • Helps franchisees and employees understand the strategic pieces that need work.
  • Enables franchisees and other stakeholders to see how objectives affect one another.

5. Complaints about Communication and Transparency

As the saying goes “the biggest error in communication is the assumption that it has taken place.” There is often a swinging pendulum in franchising when it comes to this important topic. When the franchisor communicates too little, there can be complaints of lack of transparency, even when the source of lack of communication is because the franchisor is too busy providing value for the franchisees! When there is too much communication, franchisees can become “numb” to it, and stop opening e-mails. Having a franchise scorecard helps you set goals once, and then people can review them in their own time at the rhythm that is right for them.

Ready to Create Positive Change with a Franchise Scorecard?

While change can be scary, it can also be invigorating to see how it can get everyone focused on the right things for your business. Having software for help you with your scorecards can be a great help. While we are clearly biased, we think that if you are in franchising, our franchise scorecard tool is the best – and hopefully the 13,000 locations that currently work with us will agree. Reach out to us to learn more.

Franchisee Scorecard by FranchiseBlast



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How Driverseat Advances Franchisee Profitability and Fosters Trust

By | Battle Tested Strategies, Franchise Coaching

The Driverseat franchise is cruising to lead emerging brands offering chauffeur, assisted transport and designated driver services. Founded by brothers Brian and Luke Bazely, in Waterloo, Ontario the franchise currently has 24 units in Canada, with several more poised to open in the next 12 months.

Driverseat, which has been in business for six years, and has been franchising for only five, charges a flat-rate for royalties. This system creates an environment of trust and openness with the franchisees. Learn about how CEO, Brian Bazely, uses this approach combined with authentic coaching to set franchisees up for success.    

What is your role?

Brian: “I’m the Co-Founder and CEO of Driverseat and my brother, Luke is in the role of Co-Founder and President. I focus on Franchise Development, and growing the businesses of the Driverseat franchise owners. Luke focuses on our corporate location, as well as developing the technology.”

Brian Bazely from DriverseatWhat did you do before-hand?

Brian: “I spent a significant portion of my career in executive management roles with retail companies such as Toys R Us and The Beer Store, a province-wide beer retailer in Ontario. About ten years ago, I became a franchisee of Anytime Fitness. Through that process, I fell in love with the whole franchising concept.”

What do you like about working at Driverseat and how has the company developed over time?  

Brian: “Every day feels like we’re either as passionate or more passionate about the business. The excitement surrounding Driverseat is quite something. My focus is far more centered on the franchise owners; my experience tells me that this strategy is the best way to create a great experience for our customers. I know that when I truly care for my franchise owners that they’re going to have their coachmen, which is our term for drivers, provide amazing service for the customers.

Our franchise system and the supporting technology provides a great deal of flexibility.  I find it very rewarding when we have a new franchisee who joins our organization and as is able to travel more, experience life more, or as an example, is able to coach their daughter’s soccer team because of the freedom that the business provides for them. That’s the part that gets me super-excited every day. My passion is for them and for what they can experience in being part of the Driverseat brand.”

Driverseat Annual ConferenceWhat is different about how you collect royalties compared to other franchise systems?

Brian: “When we designed the business, we decided to charge a flat-rate royalty versus a percentage. We elevate that flat rate each year for new franchisees coming into the system but “freeze” it for existing units. As the business gets larger and more sophisticated, we feel justified and qualified in being able to charge just a little bit more. Currently, it’s a $419 flat rate per month.

It’s a different system and there is a lot of debate with our accountants and other franchisors regarding this topic. They ask: “Why would you continue to use a system like this?” The answer comes down to why we wanted to launch a franchise in the first place. We are passionate about our franchise partners and we want to spend our time helping them develop themselves and their businesses. We don’t want to spend a lot of time on things with negative energy, like auditing their books.”

What did you want to avoid when you selected this system?

Brian: “There’s a natural friction point that exists in franchising that industry veterans are very familiar with. When a percentage royalty is charged, a franchisee can spend some of their day finding ways to hide money or sales results so they can pay less overall. This is not a moral failing on the franchisees’ part, it is simply human nature. The franchisor is then forced, as a result, to spend their energy on trying to audit or find that money.

We looked at that and said, “That’s a lot of negative energy on something that actually doesn’t really gel with our governance.” When you’re a flat-rate system, there’s never a doubt in the franchisees’ mind. They do not suspect an “ulterior motive” on behalf of the franchisor when we are trying to help them grow their sales.

If we spend a little bit more time on a business quote that they need to put together for a large sale, for example, there’s never the thought that we might be doing it because we’re trying to increase our own royalties – they know that we are in it for them. We spend our day doing what energizes our corporate office team – creating success for our franchise partners.

driverseat olympicsWould you be able to provide me with some concrete examples of this strategy in action?

Brian: A pretty significant portion of our business is B2B where we provide chauffeur and shuttle services for employees – moving them between production plants or warehousing plants for example. Landing these accounts represents more work in terms of sales, but the revenue opportunities are also far greater.

About a year ago, one of our franchise owners had one of these B2B opportunities and we were passionate about helping him land it. We pushed him to do a better job with mapping, and explaining the services and technology. We helped him put a significant effort into the presentation package. As a result of the group effort, he landed the sale. They still provide service today to that same customer and it sparked other sales from there.

When working with franchisees, we talk to them about their personal goals as well as their professional goals. A personal goal of one of our franchisees was to do a better job at handling herself in meetings and to be more comfortable in public speaking.

We created a plan to help her do two things:

  • Present to a B2B prospect with her husband and business partner.
  • Have her build enough confidence to showcase her expertise in front of our franchise group at an annual conference.

I was able to really push her on this and hold her accountable to the goals that she set. It resulted in her doing more business meetings, and it resulted in them building an additional revenue line. Both their profit and revenue increased – on top of that, she was able to develop as an individual.

How does this system foster a sense of trust between you and the franchisees?

Brian: “There are only two things that we really focus on:

  1. Top-line revenue and profitability for the franchise owner
  2. Trust between home-office and the franchisees.

When we have profitable sites and they trust us, that becomes the magical mix. Everything that we do is focused around those two very important factors.”

How does this strategy affect unit sales?

Brian: “We’re attracting higher-quality individuals because they are seeing terrific things happening within Driverseat franchise locations.”

What would you say the biggest challenge of operating this way is?

Brian: “It comes down to the lifecycle of a franchise system. Percentage royalties feed a corporate office. That allows you to purchase additional talent, resources, and better technology. When you charge a flat rate, in the early days, there are times you’d like to have higher revenue at the franchisor level to drive higher performance.

It has forced us to be extraordinarily smart in how we spend money and how we develop programs. The first couple years we ran the franchise system with just Luke and me.  We literally managed tech development, marketing, franchise support, and franchise development with just the two of us.

But not once in any day that we’ve been in business for five years of franchising, have we said, “I wonder if this stuff’s being reported correctly. I wonder if we need to create an audit and find out if this information is accurate”. There is no incentive for a franchise owner to misrepresent their dollars.”

What advice would you give someone who wants to try a structure like this?

Brian: “You have to be focused on the long game to do this. If you’re focused on the short game and you believe that you’re going to have a small number of franchise locations that you need to rely on, then it might not work.

We look at this from a long-game perspective and say, “It really doesn’t matter what happens in the first handful of years. This is really about, how do you get to between 2,000 and 3,000 locations?” And we believe this is the single best source for doing it. If you are going to commit, don’t look back. It’s perfectly acceptable to increase the dollar royalties each year for new locations coming in. But, don’t look back and don’t get fixated on what “could have been”.


With everyone we interview, we ask a series of fun questions! Here is Brian’s Q&A!

What new belief, behavior, or habits adopted within the last five years have most positively impacted your life?

I’ve embraced the belief that entrepreneurs today should really be part of the new rich as described by author, Tim Ferriss. We should look to create financial wealth but not just chasing the dollar every single day. Instead, we should create enough wealth that supports a lifestyle that we want to live. The new rich, for me, is about the ability to earn revenue, which then supports time with my daughters and my wife, and time travelling.

For franchise owners, I try and bring this to the surface with them. It’s about going out and having a strong business that’s very healthy financially, but not for the purpose of upgrading the Lexus car from this model to that model, (you can certainly go and do that as well).  Instead, it is for the purpose of being able to enjoy life, enjoy your family, and enjoy time which is one of our most valuable assets.

What purchase of less than $100 has improved your life?

I really love being able to pleasantly surprise somebody that works with us with small things such as a lovely meal with loved ones. For me to purchase a $50 gift card to a brilliant local Italian place that’s right around the corner from our office is a fantastic gift for someone who has gone above and beyond. For $50, you can have an amazing lunch there.

What would you put on a billboard?

Brian:  “Spend your life purchasing experiences, not products –  experiences with friends, experiences over dinner, experiences in social settings and experiences in travel.”

What books have you most gifted?

  • The 4-Hour Workweek by Tim Ferriss is a terrific book for prioritizing your time.
  • The Wealthy Barber by David Chilton is great to help give people financial independence.
  • Love Work by Chuck Runyon who is the founder of Self Esteem Brands. He’s a really outstanding leader. And the “Love Work” book really talks about passion and the culture he built within Anytime Fitness.
  • Good to Great by Jim Collins which is a factual study of how certain companies overperformed.

Ready to learn more about Driverseat? Read more here on their Franchise Opportunities page!

Download our Cheat Sheet: 24 Ways to Motivate Team Members and Franchisees with Experiences!

Experiences as Reward

Digital Disruption in Restaurants – Franchise Growth Trend Hunter

By | Franchising Trends, Restaurants

Industry folks are talking a lot about digital disruption in restaurants these days. According to Steve DeSutter, CEO of Focus Brands, “The industry is changing […] One of the challenges I’ve put in front of my team is, if we are not innovating and remaining relevant to our loyal customer, we’re losing.”

The focus brands umbrella includes: Moe’s Southwest Grill, McAlister’s Deli, the Schlotzky’s sandwich chain, Cinnabon, Carvel and Auntie Anne’s Pretzels. And more than ever, offering customers enhanced choice and improved speed are the ways to define your restaurant franchise.

Driving this paradigm shift (and so many others) is the ubiquity of mobile phones, and their access to the marketplace. To put it in perspective, most people would rather lose their wallet than their phone — that’s how important they’ve become! Positive reviews have always been great for business but now they’re becoming essential. In fact,  33% of Google searches include starred reviews, and they’re no longer a “nice to have” — they’re a need to have.

We live in a noisy world – there are a lot of brands are clamoring for our attention. According to Steve Jobs, “Marketing is all about values. It’s a complicated and noisy world and we’re not going to get a chance to get people to remember much about us. No company is. So we have to be really clear about what we want them to know about. “

The retail transformation is here. According to Forbes, “e-commerce and shopping platforms such as Amazon — where 43% of all U.S. online retail sales are coming from.” With that in mind, let’s look at three franchise brands that are managing digital disruption beautifully.

To see the first two installments of our “Franchise Growth Trend Hunter” series, go to:

Off-Premise
Sustainability

Dunkin’ Donuts

Units: 12,435

Overview: Dunkin’ Donuts has long been at the forefront of mobile marketing in response to digital disruption in restaurants. Since the beginning of the digital era, they have been capitalizing on its ability to connect with consumers. As such, the company’s DD Perks program boasts 8 million members.

They are also considering a rebrand, removing the word “Donuts” from its name to appeal to modern, health-conscious consumers. But that’s only the very beginning.

Dunkin’ is trying to make their strategy even more future-thinking, with steps that include the following two strategies according to AdAge: “Use the face recognition on the iPhone X to see whether someone looks tired and suggest a coffee delivery if so, Weisman suggested. It is exploring an integration with Outlook that could suggest ordering food and coffee when someone schedules a meeting.”

They also have a new “concept store” which allows mobile orders to go in a different line, going right to the front, accelerating the process for customers willing to dive in digitally:

Bottom Line: Embracing mobile technology holistically is a big part of connecting with today’s consumer – it does not stop at a rewards program.

McDonald’s

Units: 36,899 Restaurants Worldwide

Overview: McDonalds has kept pace with digital transformation through their partnership with UBEREats in 10,000 restaurants and their mobile app, which offers a pay option.

They call this transformation “Experience the Future”. According to Diginomica: “(2018 is) set to be a year of massive investment in new digital platforms, with most of $300 million of savings elsewhere being pumped into technology spend.”

There is also an in-store component to the initiative, for those who still like to go into the restaurants. According to the same article:

“In many of our markets we’ve scaled the Experience of the Future platform providing our customers a more seamless, personalized and enjoyment experience with digital menu boards, self-order kiosk, greater hospitality and a modernized look. They are telling us they like the new McDonald’s better. They are rewarding us with more frequent visits and they are spending more on average when they do. We deployed Experience of the Future in about one-third of the restaurants in the McDonald’s system, including nearly 3000 restaurants in the US.”

Bottom Line: Digital transformation will be on the fast food menu in many different forms. Taking a multifaceted approach helps follow the consumer’s new habits, while hanging on to the basics such as friendly service and delicious food.

Dominos

Units: 9,285

Overview: In an interesting “parting shot” as he left his role at Domino’s, outgoing CEO Patrick Doyle said that Domino’s is on the path to go from 60% to 100% digital.

Pizza has lead the way in terms of home delivery. But as others catch up, they are now needing to be even more progressive. Domino’s is doing a lot, including a digital assistant named DOM who can take phone orders, similar to Amazon’s Alexa.

Part of their innovation is to have digital “hot spots” which have no traditional address for food lovers who want pizza at the beach or in the park. There will be 200,000 locations created, maximizing access for their customer base.

According to Doyle:

“The ability to now deliver to spots without a traditional address and other rather unexpected sites will not only continue to drive incremental orders in the near term, but it is yet another meaningful step on our mission of industry-leading convenience; and the ability to order from us anywhere, anytime. This is thanks to outstanding technology helped by continued aggressive investment, sound operations, which are vital to making the Hotspots process work and proper execution participation at the store level, a nod to our terrific franchisees, managers and drivers.”

Bottom Line: Innovative franchisors can still focus on “what is next?” An investment in innovation now, can help manage the digital transformation of the future.

Conclusion: As the digital and mobile technology continue to disrupt the restaurant industry, savvy business are leveraging new technology to connect with their customers in unexplored ways.

At the forefront of this movement are major chains like Dunkin’ Donuts, McDonalds and Dominos, all who have shown themselves more than capable to remain at the bleeding edge of innovation.

By maintaining the old-school ideals of quality products and expedient service, these companies and those like them can increase profitability and customer satisfaction by leveraging the latest digital technology available.

How FranchiseBlast Can Help

As things continue to evolve, you want to make sure that your operations are still strong, and that your service is at a high standard. FranchiseBlast’s Auditing and Performance tools help organizations stay on track and evolve with the times.