Best Practices For Aspiring MUMBOs (Multi-Unit, Multi-Brand Operators)
Aug 27, 2024
I love the “Franchisee Wisdom” interviews we do for our Franchise Success Formulas Podcast. This playlist is filled with advice from amazing, successful, top-performing Multi-Unit Franchisees who share their franchise journey and all of the knowledge they have accumulated along the way.
The latest interview was with Jesse Keyser, a MUMBO (Multi-Unit, Multi-Brand Operator) who manages a portfolio of 31 franchise units of various brands, Sport Clips, Little Caesars, and Oxi Fresh Carpet Cleaning, among them. Jesse revealed to us his MUMBO best practices to overcome the challenges of franchising in multiple industries and with different brands.
If you are a Multi-Unit Franchisee, a Multi-Brand Franchisee, or you want to become one, learn Jesse’s valuable perspective on the franchise world and how you can build an empire and capitalize on growth opportunities.
But first, please subscribe to our YouTube channel and Podcast, and follow us on all social platforms!
Identify the Right Brands
After working for many years at a tech company in the early boom of the dot-com companies, Jesse had some savings and decided to invest in a business along with his brother. Little Caesars was the chosen one after careful investigation and the necessary due diligence.
Right off the bat, they understood that they needed to operate multiple units to have the economics work in their favor, especially since they wanted to be full-time franchisees and replace both of their salaries with this business.
In case you missed it: Why Franchisors Want Multi-Unit Franchisees
They ended up operating five pizza stores. But when they couldn’t find other geographic areas to open new locations, they started the search again, looking at concepts that were in the area and weren't direct competitors. The winners were Sport Clips Haircuts and Oxi Fresh Carpet Cleaning.
The brothers selected those brands because they had high margins and significant sales opportunities. Even today, those two factors are part of their checklist. As a MUMBO, Jesse also takes into consideration if he can “get any units purchased at five times earnings. That's a great deal for me”. He also shared how he always looks for net positive cash flow.
“I am all about the bottom line and revenue. I’ve never been hung up on the number of units I want to have; I’m more interested in the cash flow to fund other projects”, he explained.
The lesson: Look for franchise brands that have healthy and positive unit economics. You invest in a franchise to make money and understanding what is the average bottom line for these brands is critical. You must also inquire about the hidden costs of that particular brand, both current and future, and consider this in your financial projections.
In that same line of thought, remember to have a growth mindset. I always say that having one unit is a job, but if you really want to have time and financial freedom, you have to go multi-unit. That's how you duplicate, triplicate, and quadruplicate your profit. It’s exponential.
Be a Good Operator and Business Partner
When their first location opened, it was hit, and 16 months later, they opened their second store. “We could have opened it sooner, but believe it or not, Little Caesars said, no, you're not a good operator. You don't get to open another one”.
The decision surprised them and also frustrated them. They had really great sales, and their bank accounts were growing. Yet, the franchisor saw that some of their costs were “way out of whack”.
“We were surviving because of the volume and our cheap rent. They knew that the risk of coming through a downturn at some point was high, and warned us that if we kept running our business that way, we wouldn’t be around much more. They didn’t want us to fail with one unit, and of course, they weren’t going to let us fail with 2, 4, or 5 units”.
The brothers took their suggestions and implemented the changes. Within the following eight months, their bank accounts started to get much bigger, much faster. “I was blessed with someone saying, ‘You need to do a little different if you want to be really successful’”, Jesse shared.
The lesson: A lot of people think that this model is about franchisors against franchisees, but that’s not true. One of the things that I love about the franchise world is that if the franchisees do well, the franchisor does well. So, it can either be a win-win or a lose-lose situation.
The franchisor is your ally. They really want you to do well, so listening to them is crucial. Think about it! They created a brand that has proven its value in the market, especially the legacy ones that have been around for a while, and they give you the guidance to replicate the brand, so it would be in your best interest to listen to them.
Involve Your Leaders
Jesse has hair salons in five states, and while he actively talks to his District Managers, there are some locations that he has stepped in on in the last two years to accompany their growth.
“Salons are so data-rich. I can see the performance of every single stylist, review their customer satisfaction score, what their time of a haircut is, how much retail they sell… This data allows me to see everything and pay attention to what I should be talking with my managers”, he shared.
Another fascinating insight Jesse shared is that he teaches his Area Managers to think and make decisions like business owners.
“As a result, I don't get a lot of phone calls and 90% of the decisions they make are exactly the way I would have handled that situation. It’s not like I have an automated business by any means, but it’s got an autopilot and I can let it go for weeks without any major corrective things. And even the major corrective things are just to get them refocused”.
The lesson: Every business has Key Performance Indicators (KPIs) that let you know how your business is doing. And it is critical that you review your business trinity numbers every single day to impact your results.
But it is also crucial to share and teach this information with your leaders. The more you do, the more they’ll appreciate their job and understand what they're doing.
Knowing this data opens their eyes and shows them they are not just cutting hair, making pizzas, or cleaning carpets. They are running a profitable business, which gives them a different perspective on their roles and activities.
One additional note. Technology has definitely revolutionized how a Multi-Unit Franchisee manages and oversees the business, and it is a great way to access information about your unit’s performance. But if you don’t distinguish those KPIs that actually move your business, you can get buried in data and end up with analysis paralysis. Don't let that happen to you!
Nurture your Franchise Relationships
One of the things that Jesse enjoys the most about franchising is that it is a relationship business on so many different levels. That’s why he advises fellow franchisees, whether single or multi-unit, to have good quality relationships.
This means more than just being close to your customers. It also implies building a relationship with your managers where they feel safe, empowered, trusted, appreciated, and respected.
“We always start our meetings with a positive focus, where everyone shares something positive that has happened to them since our last meeting, either professionally or personally. They can also share something they are excited about. What I noticed is that after a while of being trained, they started making more money, and their positive focus changes to bigger things like buying a new car or giving the downpayment on a house. I love that. I love developing them, watching them grow, and celebrating their success”.
The lesson: Hearing Jesse’s approach to his managers reminded me of Nicole Malachowski, from American Airman, the first Thunderbird woman pilot.
I heard her at a conference in 2023, and she shared how these pilots really invest time in getting to know each other and understanding their abilities, skills, strengths, and weaknesses, so that they can have enough trust to execute the crazy exercises they do.
To empower each team member, she advised, you must first set the rules and make sure everybody knows, follows, and aligns with them. Also, you need to have a charter to unite all of you in the same mission.
Jesse and I had a great conversation, and he shared some other great tips and best practices for his fellow franchisees. You don't want to miss it. Click on the YouTube link below to listen to the complete interview and please leave your comments on this valuable content.
In the meantime, remember that the American Franchise Academy is here for you! We are a source of information, tools, and resources to support your growth dreams, improve your operations, and achieve your desired results, just as we did with Jesse Keyser.
We offer three training programs: one for Franchisees, another one for District Managers, and a third one for Unit Managers or Single-Unit Franchisees. Reach out to us to discover how we can help:
WATCH THIS VIDEO INTERVIEW on YOUTUBE HERE.
