Lessons Learned:

Continuous Franchise Performance Improvement

Introduction

Jason Kealey, Eng.

(CEO FranchiseBlast)

Developed a platform that

empowers franchisors to better

manage their systems.

Introduction

Pino Di Ioia, MBA (CEO,

BeaverTails) & Kathy Slotsve

(Operations Director)

Inherited a system lacking

structure and introduced

sweeping changes

over the last 5 years.

Our thoughts on how to:

1) Improve franchise compliance

2) Engage franchisees via benchmarking

3) Help franchisees increase profits

BeaverTails: Context & Goals

We bought a brand that was just turning 30...

We wanted to ensure it would be

prosperous for another 30 years!

Key Strategy

Additional growth required US expansion,

having exhausted Canadian locations.

This would further complicate distance and

sense of connectedness with our stores

Prerequisites to Growth

#1: CONSISTENCY

We need to standardize and automate our processes

(sharing Excel files was no longer sufficient)

Prerequisites to Growth

#2: KNOWLEDGE

We need to make data-driven decisions

(we were flying blind)

Prerequisites to Growth

#3: EVOLVE

We need to gradually change our company culture

(it’s not going to happen overnight)

How to Address these Weaknesses?

Analyze

Improve

Do

Continuous Franchise Improvement

Case Study

At BeaverTails we first set out

to make our policies more

clearly known.

COMMUNICATE

Case Study

Next step: Measure all

decisions throughout 2016

MEASURE

Case Study

In 2017, we’ll benchmark every

outlet to the best practices as

measured throughout 2016

BENCHMARK

• Audits

• Customer Satisfaction

• P&Ls

• Back-of-House

Management

• Communication

Initiatives: 5 Focus Areas

Initiatives Aligned to Key Objectives

1) Improve franchise compliance

2) Engage franchisees via benchmarking

3) Help franchisees increase profits

Case Study #1:

AUDITS

GOAL:

Improve standardization

AUDITS: CHALLENGES

Lack of brand consistency

• Non-standard operational procedures

• Franchisees historically given free reign

• Wide geographic distribution

AUDITS: CHALLENGES

AUDITS: FIRST ITERATION

• Hire Field Support Coaches

• Perform field visits

• Preliminary paper audit

Catch up with industry standards

AUDITS: LIMITATIONS

• Paper reports hard to keep track of

• Follow up actions fall through the cracks

• Unable to pinpoint system-wide weaknesses/trends

AUDITS: SECOND ITERATION

• Field audits app

• Increased expectations from Coaches

• Concerted effort with legal&marketing

AUDITS: LESSONS LEARNED

• Systemizing evaluations is a prerequisite

• Easily accessible history improves effectiveness

• Generated actionable insights guide initiatives

AUDITS: EXAMPLE

AUDITS: EXAMPLE

Case Study #2:

CUSTOMER SATISFACTION

GOAL:

Leverage customer feedback to

improve store performance

CUSTOMER SATISFACTION:

CHALLENGES

CUSTOMER SATISFACTION:

CHALLENGES

Lack of consistent, actionable feedback

• Client feedback inconsistent and sparse

• Impossible to track in an effective way

• Lack of franchisee involvement

CUSTOMER SATISFACTION:

FIRST ITERATION

Initiate feedback internally

• Secret Shopper program

• Emailed feedback (info@beavertails.com)

CUSTOMER SATISFACTION:

LIMITATIONS

• Lack of feedback volume

• Follow up actions fall through the cracks

• Unable to pinpoint system-wide weaknesses/trends

CUSTOMER SATISFACTION:

SECOND ITERATION

• Customer Satisfaction App

• Online review management software

CUSTOMER SATISFACTION:

LESSONS LEARNED

• Make it easy & visible for clients

• Go where your clients are already posting

• Make sure your feedback analysis is balanced

CUSTOMER SATISFACTION:

EXAMPLE

Case Study #3:

P&Ls

GOAL:

Improve unit-level economics

P&Ls: CHALLENGES

No visibility into P&L statements

• No centralized POS system (impossible for us)

• Very rough supplier purchase reports

• Unable to identify franchisee fraud

P&Ls: FIRST ITERATION

• Simple purchase database

• Find purchasing anomalies

• Request/obtain P&Ls

Gather Baseline Info Manually

P&Ls: LIMITATIONS

• Supplier’s data hard to compare month-to-month

• Lots of overhead for Coaches to obtain info

• Manually creating store SWOT is time-consuming

P&Ls: SECOND ITERATION

• Automate self-reporting of simplified P&Ls

• Automate benchmarking of KPIs

• Automatically share this information back

• Coaches leverage benchmarks to make an impact

P&Ls: LESSONS LEARNED

• Narrow focus on a few key performance metrics

• Make it as easy as possible for the franchisees

• Develop action plans for each type of weakness

• Share information back to increase engagement

P&Ls: EXAMPLE

Case Study #4:

BACK OF HOUSE MANAGEMENT

GOAL:

Streamline operations &

facilitate collaboration

BoH: CHALLENGES

Lack of coordination & communication

• No systemized tracking available

• Departments lacked coordination on key projects

• Hard to track employee involvement

BoH: FIRST ITERATION

• Manually create

employee scorecards

• Manually track

project advancement

Determine Employee & Department Priorities

BoH: LIMITATIONS

• Inconsistent tracking

• System unable to keep up with real-time updates

• Lack of coordination between departments

BoH: SECOND ITERATION

• Project management App

• Online creation of Action Plans

• Online management of assigned tasks

BoH: LESSONS LEARNED

• Value in systemizing repeated projects

• Can identify root causes of project delays

• Everyone knows what’s expected of them

• High-level insights on project evolution

BoH: EXAMPLE

Case Study #4:

COMMUNICATION

GOAL:

Engage franchisees

COMMUNICATION:

CHALLENGES

Franchisees overly autonomous & unresponsive

• No forums for inter-communication

• Front-line staff are unreachable

COMMUNICATION:

CHALLENGES

COMMUNICATION:

FIRST ITERATION

• Newsletters/Annual Virtual Conference

• Revamped training materials & videos

• Mobile app to push news to front-line staff

Initiate Communication

COMMUNICATION:

LIMITATIONS

• Chain culture slow to evolve

• Training materials not proactively consumed

• Franchisees don’t proactively help roll-out of app

• Staff requiring initiatives to participate

COMMUNICATION:

SECOND ITERATION

ONGOING: Still researching best ways to weave in

training & engagement in day-to-day operations

Facebook at Work: allows secure

communications with franchisees and

staff where they are already active

COMMUNICATION:

LESSONS LEARNED

• Very long effort but persistence pays off

• Proactively find repeatable successes

• Share these to increase the value of engagement

• Communicate expectations and payoffs to system

Conclusions

Achievements (Development)

• Opening 3x the amount of

stores/year than previously

• Double-digit store count

increases

Conclusions

Achievements (Sales)

• Double-digit sales

increases/year

• Gains are increasing

year-over-year 2008-20092010-2012

2013-2015

Conclusions

Achievements (Sales)

• Roughly 20% increase in same-store sales at

existing locations

• New stores out-perform existing locations

Conclusions

Align your efforts with your key objectives

Conclusions

Keep it simple

Conclusions

Make data-driven decisions

Conclusions

Advance continuously – don’t be afraid of failure