Jeff Bevis recently sat down with David Hansen, host of the Advisory Board Podcast, to discuss franchisee support, communications, and metrics. Jeff shares some of the pitfalls that franchisors and new franchisees face when it comes to operations.
Watch the full interview in the video below or read the transcript below.
Franchise Operations Podcast Transcript
Dave Hansen – 0:38
I’ve got with me Jeff Bevis today, and I want to tell you why I’ve got him here. So, first of all if you don’t know him, and a lot of you do because he’s been in the industry in franchising for 31 years. He is like second generation more of less. His parents owned a Remax, so he’s kind of has it in his blood. So, well a couple of things. He is a COO of Caring Service, let me say it right, Caring Senior Service franchise. This is the second time he has been in that, well not even that. You’ve been in the home care, home service or home care industry for like 19 years, am I right?
Jeff – 01:12
Yes.
Dave – 01:13
A few things you might not know about Jeff. He lives in San Antonio. He played college basketball. Who did you play for Jeff, by the way?
Jeff – 01:19
Just a small division 3 school, Capital University in Columbus, Ohio.
Dave – 01:25
That’s okay though. It got you moving around the country and playing some ball. That’s awesome. Jeff’s also got how many kids? I know Devin.
Jeff – 01:35
Two children and six grandchildren.
Dave – 01:36
And you smile more when you say the grandchildren, Jeff. Why is that?
Jeff – 01:42
Well those are your pride and joy. You get to spoil the heck out of them and then give them back.
Dave – 01:44
Yeah. Well I am sure grateful to have you. Jeff is an expert in operations guys. I mean he’s been doing this for a long time. The length of tenure doesn’t always mean expertise, but as we were chatting and preparing for this before, I think you’re going to enjoy a lot of the comments that Jeff is going to share with you and some guidance. But Jeff, before I butcher anything else since I seem to be struggling this morning, tell us a little bit more about yourself and about what you do.
Jeff – 02:06
Well, I appreciate being here, Dave. I am currently the COO of Caring Senior Service. We are a non-medical in-home care franchise. We’re the only tablet-based brand in the U.S. today across the entire home care industry. I’m very proud of our technology platform. Kind of high-tech, high-touch. I’ve been in franchising for 37 years, seven different brands, five different industries. I can’t say that I’ve seen everything but I’ve seen probably most of the different conditions, the highs and lows, and really enjoy working with entrepreneurs and with other emerging brands to try to help them be successful too.
Dave - 02:45
Yeah. Well this is cool. And it’s a family affair for you guys because you mentioned to me before, Devin, one of your children he worked with you on a previous brand which you exited, and now he just recently came onboard with Caring Senior Service.
Jeff – 02:58
Yes, Devin and I built another brand from scratch for 10 years very successfully in the home care space, and now he’s our new director of marketing at Caring Senior Service. So I’m really excited to team back up with Devin and have some great success here at Caring.
Dave - 03:16
Yeah, that’s fun. Well let’s talk about the topic. So a lot of brands really struggle with operations. I mean like every aspect of operations, staffing or technology. But there are a few areas where everybody universally needs to have a plan and a process or else they’re really going to struggle, and we identified those before as support, metrics, and communications. So what we’re going to talk about today guys is how do you break that down, those areas down into really functional plans or how do you make sure you’ve got a plan in place so you can address those key areas of operational inefficiency that typically exists in franchises. Ad I’ve got the right guy here with me today to make sure we do that.
So, Jeff let’s start. One, you’ve been in this industry for a long time, several different franchising categories, concepts, things like that. What would you say, why these three areas, why support, metrics, and communication, what have you been seeing in your career that makes you think these are the most important areas of operations to narrow down to in this discussion?
Jeff – 04:22
Well over my entire career, Dave, I would say those three don’t waiver based on the sector or the industry or the brand. If you have really strong communication with franchise owners and then certainly have solid metrics that you and the individual franchisees are majoring and then sharing and obviously have really a key devotion to support, those are kind of the three cornerstones I think that would build a brand very successfully and usually very, very rapidly too.
Dave – 04:56
Yeah, agreed. And I think we should break them down because you know that’s definitely not the end, that’s just the intro of the topic here. Let’s talk about support. And I’ll just share some insights because we’re a sales automation platform. We work with tons of organizations across every sector, several people as I mentioned in your sector, and we see beforehand a lot of struggles with supporting franchise success. So tell me like first what are some of the biggest challenges that you see when people are trying to build support infrastructure and support operations?
Jeff – 05:28
Well, I think a lot of times we emerge as a brand and we think we have a solid base, and we probably do for a first corporate operation or a first couple of corporate operations. But the support that you give to a franchise owner of course is different than the support you would have in your own corporate operation. So I think first and foremost you go into it with a “we’re going to do whatever it takes” approach and support the franchisee no matter how high they get or how low they get to help keep them on that treadmill or on that wheel moving forward and moving higher in their hours or their product or their service results overall.
Over the years I have also seen a lot of franchisors emerging brands that went to it and kind of cut corners on the support side especially early on because, you and I would probably both agree, it’s not magical. You have to really get in. It’s roll up your sleeves, build that support base, do whatever it takes to help those, especially the first 10, 20, 40, 50 franchisees be not only successful but wildly successful because that’s going to be the health of your brand. And obviously owner validation, that’s going to go a long, long way. So the support aspect, I think, has to be operationally sound. It has to be well-documented. You have to be able to teach it, educate the franchisees, and help them educate their staff to be consistent in the overall delivery but then also just be able to see the success and help them track it as well.
Dave – 07:19
Yeah, well let’s talk about that. You mentioned just a few minutes ago that a lot of emerging brands, growing brands, even established brands they start to cut corners in the support process. I mean what does that look like? And for those listening because there might be some guilty parties listening in, but some of them might not be aware that they are cutting a corner. Some of them might be thinking hey we’re being super efficient here, and yet it’s actually a corner being cut that’s going to bite them in the butt. So it rhymed pretty well. We might have to coin that later. So Jeff, what are some of those key areas where you see corner cutting happening in the support process, and then let’s talk about how to undo that, unravel it.
Jeff – 07:59
Yeah. I think a lot of times emerging brands, Dave, will focus, over-focus too much on the budget side of things and, not that you should spend like crazy, but I see folks cut corners where they say, "hey my first 40, 50, 60 units I’m going to do support over the phone or I’m going to have a once-a-year annual conference, or I’m going to have maybe a quarterly town phone call." You can’t do it with just that little bit of support or action or contact. You’ve got to go all in, like mentioning before, but that’s not saying you’ve got to be out there and visit every owner every month. But I see people cut corners where they’re trying to skimp or get by on minimal support, and that is just the exact opposite of where I’ve seen successful brands really go and why they have been successful because they committed to support. They had the town hall calls but they had them maybe monthly or more often, they had weekly phone coaching, they do still make on-site visits. And then even once you get the 50 or 60 units, and you have maybe a dedicated support person whether that’s a business coach or however we want to title him or her, then you have kid of a next level of support where you’re really able to truly deliver on providing direction, guidance and support to your franchisees.
Dave – 09:25
Yeah, you just opened up Pandora’s Box. Let’s go into this a little bit because I think a lot of franchise brands, it’s not just money because they’re selling units, they have a cash influx, it just needs to be reinvested back in the business. This is why I see a lot of them struggle. They’ve invested heavily in some sort of an FSO relationship, where essentially every unit they sell they have 0 cash coming into the business to build the infrastructure to support the people that they need. Nothing wrong with FSOs but I mean you’ve got to be aware, eyes wide open guys, you’re going to probably have to take out a loan to get the staff to pay that bill if you’re working with an FSO. So you can have the proper support of infrastructure and if you do it, then that gain here is that you’re going to have a royalty independent business where you’re not dependent upon the cash influx of the sell of franchises. I knew a unit or a franchise system that had 200 and something units, and if they didn’t sell enough units, they would not be able to pay their bills every month. I mean, that’s not a healthy business model.
Jeff – 10:31
Sure.
Dave – 10:33
You gotta have the royalty independent, and that’s easier said than done but maybe in some small manner FSOs help with that because you’ve got to learn how to be relatively independent or bust. It’s about investing in the people. And you mentioned weekly coaching, on-site visits, getting in the field with the folks. There is one more thing you mentioned that’s kind of a key part of that. What was that? Do you remember what it was? I didn’t type that down.
Jeff – 10:58
Well if you have the town hall calls, the on-site visits, the telephone coaching, and then just have conferences too, do ongoing training with virtual whether Zoom or WebEx or Google, we’ve got a lot of ways to really be almost there at least face-to-face with provided added support.
Dave – 11:27
Yeah, I think so too. We won’t get nerdy about tech but I think as the technology for virtualization and NAR kind of develops, I think actually being in-field could become a lot more manageable and cost-effective and also a reasonable experience. Like right now getting into a VR world it’s your avatars and talking. You might as well do a Zoom, but like, I think anyway we can slip the nerd herd discussion. I think that actually may become more manageable. Give it two or three years to develop, but I think Apple is working on some things like that. You know Meta sure is, Facebook sure is, you know the oculus experience of being locked into a little chamber is going to change I think soon. Anyway...
Jeff – 12:13
You make a good point Dave about FSOs because not to say that they’re not appropriate. They certainly have their place and can be very, very helpful in a growing, emerging brand, but I think what we’re both saying too. I used the term royalty self-sufficiency. Over the years, I think that should be what we’re all be searching for, striving for as a new emerging brand, and make sure we know exactly where that number or that tipping point is. You can use franchise sales organizations to bring new candidates, new owners in, but then if you do that, then I would really double-down on the support side operationally so that yes, if they’re bringing new ones in for, you they’re kind of your outsource franchise development team obviously. And you’re really making it work on the ops side. So if you have high success, very little failure, if any failure at all.
Dave – 13:13
Yeah, I agree, and you brought up something that nobody wants to talk about, but I think we should talk about it more which is field visits, being on-site with people. That’s expensive and it’s expensive in personnel as well as in travel and expenses — more so on the former than the latter when you’re small and emerging. It’s like well how goes, me or my wife? Like some of these brands it’s two or three persons...
Jeff – 13:34
That’s right.
Dave – 13:36
And if you haven’t properly separated yourself from operating your corporate stores you’ll never be able to do this.
Jeff – 13:44
Very true.
Dave – 13:44
So I think an emerging brand building that infrastructure to make sure you can completely separate and truly be a franchisor and leave the core operations of your one, two, three corporate locations to a capable general manager. Doing that I think that’s probably got to be a step one. How do you feel about that Jeff?
Jeff – 14:02
Sure. I think you mentioned a very capable general manager, Dave, to me can be a key person in doing those field support visits. So initially if it’s you and your wife and one other employee and you have this very capable GM doing the management of the corporate location, you can incorporate he or she in those field visits too. I mean they’ve got great ops experience. They’re running your corporate location or locations plural. Have them in the mix and be able to take some of that burden off of you or your wife or that other employee. But absolutely get out in the field, make those field support visits, don’t let it just go on autopilot or rely on video visits. As much as we have said before, those can be great tools but the emerging brands that succeed and get to 100 units plus. I think really make a commitment to be there in person. Yes, it will be tough timing wise. Yes, you feel like, "Gosh I don’t have enough hours in the day, I’m working 70 to 80 hours to 90 hours a week. My first couple of years anyway." That’s just the nature of the beast but it’s what you have to do. There is no shortcut there.
Dave – 15:22
Yeah, yeah. I know a couple of guys who are hustling right now that are building new brands and that’s their life, and they know it. People advise them look your first two or three years, you’re going to be doing 60 to 80 hours a week minimum and then if you get big enough and have the right staff in place where you don’t have to, but you kind of have to or else it doesn’t work.
Jeff – 15:42
I agree.
Dave – 15:43
Really, Jeff what would you recommend? It probably varies by concept but how frequently should the franchisor be in-field with their franchise brands to truly stay in tune with them, give them the right coaching they need, etc.? And maybe we break it down by stage as well because their lifecycle, being a new franchisee, I’m guessing in the first year, there is a magic number you have found over the years that you probably better be with them an X number of times. Can you shed some insight into that?
Jeff – 16:08
Sure, sure, and I think it definitely does vary based on how long they’ve been in business and maybe even size and scale. So what I mean by that is I think in the first year to 16 to 18 months you should make at least three in-market visits. Contractually, though, a lot of us in the franchise agreement don’t want to commit to even one visit a year. I think it takes guts but also it’s visionary to, in your franchise agreement, show that new owner that you’re going to be there twice in the first year or twice a year total. Once that business starts scale, you’re two or three then, I think that support frequency changes a little bit. But it also can kind of intensify if the business is taking off and growing steadily.
I think we would both agree that the type of support you’re delivering in the first year, you know low revenues versus the type of support you’re delving in your three, four, five and six at high revenues, that takes a different approach. You want to document. I think it’s always important to ask the franchisee before you go, before you make a visit, what are the key challenges and hopefully you’ve been talking to he or she and you know what they’re really up against but you want to give them a chance to have input on the shape of your visit — whether it’s for one day or two or three days, and then do a recap back to what you committed to, what they committed to so it can be kind of a roadmap to follow from the first visit to the second visit to the third visit and so on.
Dave – 17:52
I love what you’re describing there having kind of a process where not only do you do the visit but also you document beforehand what the focus of the visit is. Because just showing up and doing visits, I mean, I know some franchise brands that have great relationships with their franchisees and have not coached them. So it’s really more like, "hey let’s go grab dinner, hey let’s look at your books for a minute." And it’s really like a “hey buddy” visit. You can get that visit from anybody, you know. That’s not what they’re paying your royalties for. They’re paying your royalties because you’re supposed to help them implement your business model and find success there in the market with it. So having that focus before you show up is critical and I honest think.
I don’t want to move off from this topic yet, but this is where metrics come into play. As a franchisor if you don’t have the right metrics, then you have no idea what they’re problem is. If you’ve got the right metrics you know exactly what their problem is and they might not even know it. We'll come back to metrics in a minute, but as it’s related to this, how do you use metrics to determine what you should be focusing on in your site visits?
Jeff – 18:59
Yeah, I think that’s a key part of what you’re trying to coach or train the owner to utilize or just even recognize and then utilize too. So that’s one of the benefits, Dave, of doing like a pre-visit letter in advance where you’re asking them the key topics they want to cover with you. But then you’re also listening to say your top three or four or five metrics — whether they are doing well so far or not. And you want to get them acclimated and start educating and paying attention to, "Hey here’s the three, four, five things that are most important, and that’s what we’re going to really focus on from my standpoint while I’m there. Also looking at the three or four key topics or priorities that you Mr. or Ms. Franchise owner have too." And to your earlier point, I think you owe the franchisee to give this kind of outside-in view. Because they are managing the business day-to-day. And the last thing you want to do is come in there and be able to tell them everything is fine and kind of sugarcoat things. And if it’s not that’s what they are counting on you as a franchisor to really tell them. And in fairness, I think that’s what we owe them is the reality of, "hey this is working great, you’re doing well here, let’s talk about this other area because things are not working well there and we need to make sure you’re on track using the process, using the system and not letting them get off the reservation too far."
Dave – 20:28
You know, in the back of my mind I hear some of my friends in the legal side of franchising you know, I hear them whispering there is also another benefit to what you’re describing, right, this creating a visit letter, creating a recap letter, which is also you’re proving the value of what you’re doing as a franchisor and that there is no negligence in our relationship with the franchisee. I mean, I don’t want to rift on this too long because I hate this aspect of it, but we also have to play the CYA game a little bit. That should not be the motivation for this but I’m saying as an added benefit of doing it right. How would you protect franchises how are doing it well?
Jeff – 21:08
That’s exactly right Dave. And I don’t really consider myself being a risk-adverse person but I think risk is always important for the franchisor that you’ve got to be mindful of documenting visits, documenting communications, making sure that if that worse-case scenario came out later, where the franchise owner says, "they never visited, they never called me, they never gave me any guidance, never gave me any training." You’ve got your ducks in a row and your documentation there. It doesn’t have to be immense or in attorney’s words, just be in your words or your operational manager’s words so that you can back up and show all the efforts that you’ve actually made and invested in the franchise owner.
Dave – 21:51
Then, one other note on the legal stuff especially to the emerging brands. This is also why you need to actually, rather than just trust that the attorney did you a favor, you need to read through every single clause that they put into the franchise agreement and making sure you know what you need to execute on and what do you not. You almost want to make a separate document that shows okay here’s my metrics of my commitment to my franchisees, metrics commitments from my franchisees to me. And then you can hold yourself accountable to your metrics to make sure okay I’ve committed to an annual on-site visit. If you don’t go them to save budget but it’s in your agreement, guess what. You’re going to lose that battle every day in court because you broke that commitment and that’s negligence; you’re not fulfilling on a term. It’s a breach, so you’ve got to be cautious of what you commit to upfront so read that agreement. Make sure you feel comfortable executing on it, and if you don’t, then don’t do it. I think most attorneys are going to advise you not to make those commitments in your franchise agreement, but at the same time, if you make them stick with them.
Jeff – 22:51
Maybe to make one more comment, Dave, because I think you’re spot-on. I would kind of flip it and that becomes kind of a franchise development tool. Because franchise candidates by and large don’t hear, much less franchisors, "Here’s the key highlights in the franchise agreement" or "Here are the key highlights in a 200-page FDD document. Here’s the commitments we’re making to you. Here’s what we’re expecting of your commitments you make to us." You know, if you can boil things down to those kinds of key points franchisor-to-franchisee and franchisee back to franchisor, I think you will stand out too and be very transparent and open and probably build trust faster with a candidate or the new owner as well.
Dave – 23:38
I love that aspect of what you’re saying. Thanks for now getting us out of the dark scary part into the light, which is funny because we’re saying sales is light and most people say it’s the dark side, but we’ll discuss that later in another episode. So, I find that if you in the selling process have explained to somebody let’s say it like you’re describing, "Hey as part of your agreement when you do FDD review, this is what we’re committing to do with you and you highlight the fact that we’re going to be on-site. For the first year we’re going to be there three times. For the second year we’re going to be there at least once a year." Like, if you describe that even though everybody else might be doing it, if they’re not talking about it, it doesn’t exist to the candidate. So it’s an opportunity for you where you’re positioning yourself as the franchisor that’s going to be the most engaged. But if you choose to do this and have some commitments in there and execute on those, as we mentioned before, most people aren’t making those commitments, so it does become a very powerful sales tool. I really like that you brought that up, Jeff.
Well, we just rifted on that one topic for a while. So let’s shift gears shall we. So that’s one of three. We talked about support, metrics, and communications. Now communications we’ve been kind of talking. If you don’t mind let’s shift to that one first because we’ve kind of been dancing around it a little bit, around like on-site visits, doing weekly stuff like that. Let’s break that down more. Where have you seen communications become kind of a sticky point or a challenge for franchise systems over the years?
Jeff – 25:09
I think there are a couple of different things almost like caveats or things you want to make sure you avoid. One, you can never over-communicate. So that means whether it’s by phone or video chat or in-person visits or conferences. Don’t avoid the elephant in the room, don’t avoid a franchisee who maybe is not succeeding, don’t avoid franchises that are not following the system. It’s not going to get better by itself.
So I think first and foremost, you want to communicate up front, equally, openly, with all transparency to every single franchisee. Certainly some are going to grow faster than others. Some are going to be successful sooner than others. You can hold those folks out as best practices and success stories, and you really want to have others emulate them. That’s great but don’t let the lower performers or slower performers fall off of your radar. That will cave an emerging brand quicker than anything, if you have this kind of have and have-not group.
So I think communications, whether it’s a weekly newsletter that is an online e-zine, that’s what I’ve seen that works very, very well, either like every other week or monthly, a town hall all-system type of call. If you just have five or 10 franchisees having that type of interval of communication will go a long, long way. Plus, as you scale, having that consistency of that same weekly newsletter or monthly call, quarterly updates type of thing, will all pay off and help build the consistency of the brand too.
Dave – 26:49
Yeah, I was just thinking of that. We do weekly sales meetings here. The reason is is that we want to make sure everybody is discussing the same things the same way, we’re leaning about technology changes. There is constantly evolving technology, which is a nice problem, but we have got to stay on top of it or else we’re not going to be great consultants, you know. Also, I need to make sure everyone is following the same process. There’s no better way to make sure you’re just reminding people. You pick one process every week and you can cover 52 processes a year or maybe 50 because you’ve got a couple of weeks off. But like that’s a lot of training and reminding, and if you want to keep people consistent boy you better be doing it or else it’s like herding cats. They run to the....
Jeff – 27:31
Yeah, and you know I think we would all agree that every brand in every sector should be changing and evolving. Because as you said technology is changing, HR practices are changing continually, labor laws, wages. So there’s plenty of change occurring, and we want to make sure we keep the franchisees abreast of that change no matter what our industry is, and again that’s another way to show value as a franchisor.
Dave – 27:49
Yeah, and let’s talk about that last part. Because you know, the first 90 days where you’re helping people get off the ground and they’re figuring things out. You feel like that’s really the heavy lift of the franchisor. But it’s also where there is almost a separation emotionally within the franchisee about month four or five or six they start to say, "Well I can do this on my own. What do I need you for?" And then the rest of their lives for 20 years you’re justifying your existence to the franchisees and not because you shouldn’t, right like you really should. They’re paying you money, it’s the licensing and the training, but to what you just said people have missed this a lot I see. The franchisors don’t recognize the position that they’re in.
And you, as an ops guy, probably see this and harness it, but the real power of a franchise system isn’t the consistent process and the business plan. It's the vendor relationships. It’s harnessing the collective genius of the different franchise operators. And so when you’ve got this weekly meeting, it’s not open up your training manual to page 323. We’re going to go through how to plug in your time sheets. No, you can do that if you want and frankly you should have an LMS or someone who is doing that is doing it for you so you’re not wasting human capital retraining. But talking about what’s changing about time management laws, make sure everyone’s trained on that. Heaven help you. The easiest thing to do that I’ve seen work well. People love it when they bring in like can you do a training on this, and I’ll go in there and get them jazzed about how to do a lead rehash campaign and generate more revenue and lead volumes are down, which is going on right now. And they are like, "Wow, that was awesome." And they’re like, "My franchisees love that." I’m like, "Why don’t you have every one of your suppliers join you on a regular basis and do training?" Your HR people, bring them in. Your insurance person, bring them. Have them train everybody on what is changing in liability. What they should be paying attention to in their coverage. Why not? Take the pressure off of you. Bringing in true experts and now they’re getting something they wouldn’t be getting. They’re not listening to you all day long so they get a lot more out of it I think.
Jeff – 29:55
Right. I am going to agree. That’s also back to the value of the franchisor. Because you’re right, after the first four, five, six months, hopefully they are out of the gate strong. You’ve really immersed yourself into their early success. And then it becomes, what have you done for me lately, and what do I get for my royalties. And just face it, that’s going to be your every two week or every month challenge for the next X number of years as long as they are a franchise owner. I think you’re exactly right, Dave. You want to reinforce the value whether it’s through outside speakers, outside expertise, the suppliers, technology, changes in the industry, and you’re keeping the franchise owners abreast of all that or you’re kind of a conduit to enable all of that expertise. That’s why they bought into your brand, that’s why they’re paying your royalties.
Dave – 30:45
And talk to us for a minute because peer-to-peer trainings, we all know are way better. If you can get rid of the ego and give that mic off to somebody else, you tend to have better experiences and people get more out of it. But tell us how have you leveraged peer-to-peer training versus corporate-led trainings, and what kind of results have you seen from making that shift?
Jeff – 31:09
You’re exactly right there too, Dave. Peer-to-peer example by other franchisees always works best than a talking head from the franchisor. Even if the franchisor has a great relationship with the franchises, great knowledge and experience, you’re always going to get much more mileage out of that peer-to-peer approach where you’ve got, where you mentioned earlier you’ve got a successful franchisee who maybe does recruiting or does marketing very, very well. So you have he or she up there and they are explaining how they use the system, how they utilize the tools in their success. So I think that is always not only the best practice but the best approach across the board. Plus, it builds the camaraderie peer-to-peer even more.
It can even take an offshoot and become a mentoring opportunity from the larger more successful franchisees with the newer ones coming in or maybe less successful. And that also shows that you as a franchisor are not myopic and just so immersed in only your view of things, that you are actually open to sharing the successes that your franchisees have had with each other. You hit on a very important topic. I call it the power of the entrepreneurial network so you’re right. The franchisees, that’s the power of a successful franchise system is the franchisee peer-to-peer network interaction and communications. Yes, the franchisor has already kind of set the guard rails and you’re kind of keeping everything running on the right tracks, but you want those franchisees working together, communication back and forth, that’s the power of a successful brand.
Dave – 32:55
Yeah, you said something there that I think is key because I’ve been involved in some of these meetings and I’ve seen a franchisor kind of go off the rails or like, "Well, I’m doing this instead of that and it is working better."
So, you’re an ops guy. How do you build some safety net or maybe guard rails around that process so people don’t lead people astray off of the proven process... sometimes you gotta change, right? Sometimes you.... but you don’t want the revelation of a process adaptation to come from a peer-to-peer training that you’ve highlighted and set up in this meeting. So how do put some safeguards around that?
Jeff – 33:33
Yeah, there are two things that I’ve always done that I think are most effective Dave. One is I’ll kind of plant seeds ahead of the session. So I take my one or two strongest operators that I know are going to be in the session, and hopefully they are the ones that are in some way presenting it. But even if there is one or two others that are not part of the franchisees presenting, I want to try to mention to them, "Hey, as a reminder if we have anybody speak up, would you please step forward and reiterate your view on this topic?" So I’m not dictating, I’m not mandating, I’m not putting words in their mouth. And that way when that franchisee steps up and asks a question or has a comment that is off the rails, off the reservation, not part of the system, one of their own peers steps up, steps forward and answers their question or gives them the response and not us as a franchisor. So then we don’t come across as being heavy-handed. Again, it takes some work; it takes some relationship building, which hopefully you already have with your stronger more established franchisees. And at the end of the day, the franchisees want a strong brand. We’re only as strong as our weakest link. We’re only as strong as our weakest franchisees, so I think the stronger, more established franchisees, they want to help that weaker franchisee come along. They want to bring him or her along so they get into the fold and make the brand stronger too.
Dave – 35:03
Yeah, I love that. And I think seeding the ideas, prepping people for that, and also frankly just knowing, knowing who your experts are. Because worst case, if they don’t chime in unless they’re not paying attention to that part of the Zoom meeting like, "Yeah, yeah I know this," you also know who to call. Like, "Steve I know that you’ve certainly come across this a number of times, how would you recommend taking care of that? I know Charlotte you do it a little bit differently than they do in Tallahassee but you might tackle that." It’s better when they organically raise their hand to help out, but boy being able to call people out in those meetings and when you facilitate the knowledge transfer, I think that’s a really good fail-safe if they’re not raising their hand themselves.
Jeff – 35:43
Oh yeah, I would agree. That’s back to if you know your franchisees well enough, you’ve communicated well, you had solid support, they now their metrics, you’ve helped educate them on their metrics, and then yes, you know to call out Steve or to ask Steve or ask Mary if she could share her experience back with John who just kind of gave an off the rails comment or question.
Dave – 36:10
Yeah I agree. Cool. So you said there were two things. One, you see ideas and I cut you off so you didn’t get to the second one. This is to insure you have a good peer-to-peer training environment.
Jeff - 36:20
Yeah, the second one there is building more of a formal mentor program where you do have the peer-to-peer network, that kind of a second level. And it’s starting early to where it helps those new franchisees that are coming in, Dave, to better understand and see the path to follow from a successful owner. And it is not just everything that you as a franchisor is saying that the successful owner is able to back it up too.
Dave – 36:50
Yeah, and how do you do that because that requires time from your franchisees that are already operating a business? How do you get them to buy in to a concept like that?
Jeff – 36:48
Yeah, that is definitely a tougher challenge. I think there are two pieces to that, too, because I’ve seen it work where there is slight compensation. Because you don’t want to get too carried away there, and you could get accused of you’re paying for that that mentor is telling the mentoree. But I think it is something where you set up that mentor franchisee as being either a certified franchisee, certified franchise training mentor. So if you could title he or she a couple of different ways. And then rewarding them, it could be something other than monetary. It could be with recognition at the conference. They have a special band on their name tag or they have a flat or there is a special reception where just the mentoring franchisees are in there. So it doesn’t have to be monetary compensation. It can be recognition and acclaim.
Dave – 38:00
Yeah, I know some that do if they’re are in an industry where they’re consuming, they’ll provide a discount on the corporate, whatever materials you have. If you’re a mentor I’ll give her 10% off on all the stuff you buy. That can tally up fast or if a royalty-driven environment, which y’all are in, They say, "Hey, for anyone who is in the mentorship program, we’re giving you half a point off of your royalties for the duration of the time that you’re a mentor." Sometimes that can become, I’m not saying you need to use that number, don’t get caught up on that. I’m saying like that kind of a structure that’s appealing. You know? If I’m doing $100,000 a month and I can shave off one point then essentially it’s either you’re paying me $1,000, or I’m saving that off my bottom line and putting that case in the bank. It’s usually a pretty equitable exchange for three, four, five, six, seven, eight hours a month of effort. So you just have to do some math. Ask what is their time worth, make sure you’ve got something that is valuable because... And also the recognition side, you can’t underestimate that. In some ecosystems, like teachers, they actually value recognition and awards more than monetary compensation. You find the balance there. I think you’re smart to bring that one up too.
You know what’s sad is we’ve talked about metrics circumspectly as being kind the root of how we have to identify how to coach people, things like that. I know it’s time to wrap up but do you mind maybe Jeff sharing some parting insights about how critical are metrics in supporting the rest of the topics we discussed today.
Jeff – 39:31
I think metrics are vital, Dave. It’s sort of what drives profitability, which we should all be holding. You know profitability is our number one goal all the time because if the franchisees are successful and profitable, we as a franchisor are going to be fine. So core metrics, we need to make sure we have a score card, a score card the franchisee looks at. You as a franchisor should have your own score card too that you’re tracking the system owner-by-owner. That’s how you should be tracking unit profitability, too, owner-by-owner. But come up with what your key operating guide points are.
So, like for us, in the home care industry, you know, hours per week of care is a big, big metric. Caregiver turnover is a big metric. Caregiver retention is a big, big metric. Our close ratios of when we’re in the home doing an in-home assessment up front, how often does that result in an actual signed service agreement? It doesn’t really have to be complicated, and in fact, I’m a big believer that simpler is better. So just try to create those core metrics that also a new franchisee and his or her staff should hear and see that those core metrics throughout their initial training as well.
Dave – 40:49
Yeah, because it gives them the measuring stick, right? They should be working toward those things. Otherwise, if you have nothing to aim it, you’re sure to hit the mark right?
Jeff – 40:59
That’s right yeah. And then, of course, make sure that there’s the core business plan that’s in everybody’s automatic pocket right from the start. Because you want the business plan to be a big, big guide you’re going to circle back to for support and operational guidance as well as metrics.
Dave 41:16
Yeah, I agree. That’s fantastic advice. Jeff, I wish we had another 20 minutes, although I think that maybe we should get together another time and dive deeper into the metric side of things. Thank you for covering such an important topic today of operational excellence and how to focus on support properly, how to focus on communication properly, and then even metrics that kind of ties it all together. I feel like we did talk about metrics in multiple settings there but this has been fantastic. Thanks for sharing so many insights.
Jeff - 41:44
Thanks for having me.