Franchise Lessons from the Edge

(Part 2 of the Multi-unit Franchising Conference)

Attending the Multi-unit Franchising Conference last August was very insightful. As I mentioned in another blog post, I decided to share with you all the knowledge I acquire there, divided into separate entries. This is the second one, where you’ll learn some lessons given by several multi-unit and multi-brand franchisees.

Missed the first one? Learn here about the keynote session: 5 Steps to Make the Impossible, Possible.

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The panel was called “Lessons from the Edge”, where four multi-unit franchisees shared the challenges they faced, and the learnings they got from these last months of the Covid crisis. Let’s review them one by one: 

Dawn Lafreeda, Franchisee at Denny's

Challenge: As it happened to a lot of food industry businesses, this multi-unit franchisee of 110 Denny’s restaurants in the United States had to close some of her locations for several weeks. Weekly payroll cost her 1.6 million dollars, but with cero dollars coming in, she had to lose over 3,000 employees. And even now, some of the 24-hour restaurants are operating fewer hours because of the lack of staffing. 

Learnings: Being a multi-state franchisee, she knew a thing or two about how to get organized. But since the pandemic hit, she became a master at managing not only multiple stores, but all the different expectations, policies, and laws created on each of the states, and the ongoing changes of what could and couldn’t be done along the way. 

She was also able to learn what is truly essential for the business and what is not. This helped her discriminate between what she really needs to handle versus what isn’t indispensable.

Glen Helton, Franchisee at Burger King & KFC

Challenge: He's a multi-unit multi-brand franchisee and his units are mostly based in Europe. His stores experienced a lot of changing operating hours, deviating from the standard, not only for the health crisis but because of the lack of staffing, which is a worldwide challenge. 

Learnings: Participating in as many meetings and best practice sharing opportunities is critical. Think about it! One person doesn’t have all the answers and the kind of information each people has differs from what the others bring to the table. 

Being able to interact not only with all their fellow franchisees and master franchisees in different countries but also with other entrepreneurs, was crucial. This helped him understand all the information that was happening. Also, it inspired him and gave him more skills to make better decisions for his business. 

Another learning he shared was: we have to do it better, do it faster, and still grow. For Glen, backing away from growth opportunities is not an option, because that would result in an even worst situation for his company. In fact, most of the franchisees in the panel said that they were still growing, which is quite outstanding.

Anil Yadav, President & CEO at Yadav Enterprises Inc.

Challenge: Although the PPP governmental assistance was very helpful at the beginning of the Covid crisis, especially to maintain payroll, the program had a deadline. So eventually, he had to lay off people. One day he had to let go of 600 employees, which he says was one of the hardest days he has gone through. 

Learnings: The brands that had embraced technology before this whole crisis are the ones that are doing better. That’s why he’s adding that particularity to his checklist when looking at future brands to acquire.

He also pointed out the huge opportunity for acquisitions. In fact, a couple of panelists mentioned that they are looking at the acquisition of franchise units that were not prepared for the situation as a growth strategy. 

David Ostrowe, President of O&M Restaurant Group

Challenge: This Taco Bell big multi-unit franchisee was impacted by all the government rules and regulations because he couldn’t offer in-store attention. Although he had delivery and drive-thru options, he hadn't really focused on them. 

Learnings: After redesigning his delivery, this channel became 6%-8% of his business. Delivery is very profitable for him, even with the third-party fees, because of two strategies: a raise in his prices to cover the distribution cost, and pushing customers’ larger orders to have incremental tickets.

Having things delivered to your house is here to stay. As a matter of fact, all of the panelists mentioned they're looking towards having a 10%-15% of the revenue coming through delivery. That’s why they are embracing this channel and including it in their regular procedures to push it to grow to that extent. 

As a closing note for this post, I want to mention how that staffing challenge is common to almost every single franchisee, big or small. The best tactic to face it, advised by the panel, is to strengthen your company culture and work environment to be able to attract and retain personnel to your organization and have long-term success.

I hope the experiences and strategies help you go through the current difficulties that you are having with your own business. The challenge is tremendous, but The American Franchise Academy is here for you! 

We are constantly sharing tools, information, and best practices to help you become a successful business owner. Follow us on our social media, and YouTube channel to access these resources.

Reflections:

• How lean is your operation? Is there any room for efficiency?
• Do you have a network of trust where you can get inspired and acquire knowledge? 
• Is your organization adopting technology to innovate your brand? 
• How developed is your delivery channel? Are there opportunities and customers that you are still missing?

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