I hear a lot of clichés passed around the franchise industry extolling the partnership between franchisor and franchisee. There are many, many franchise brands that live this credo out every day, and work diligently to improve the profitability and brand equity for their franchisees. There also seems to be no shortage of franchise companies whose main concern is building their own profitability and market value at the expense of their franchisees. So how do you tell them apart and just how important is this differentiation as long as you are with the “Hot Brand of the Day”? There are some absolutely great books that speak to this subject, but one of my favorites is still the story of the birth and growth of McDonald’s: Behind the Arches, by John F. Lowe, first published back in 1986. The gist of the story is that McDonald’s focused on driving down costs and building revenues through great operations and by partnering with committed and hardworking franchise partners as they grew their brand over the years. The competition, some of which were much larger, better financed and had a huge head start, spent their time being more concerned about selling their equipment and product to their franchisees as part of their business model. Over the coming years McDonald’s singular focus on the success and profitability of their franchisees created a competitive advantage which they exploited year after year. Eventually the competitive advantage and gap between McDonald’s and everyone else in the industry grew larger and larger and was a key driver in the eventual domination of the ubiquitous brand we know today. I will never forget this story of how important it is to know who you are and what you stand for, and then to commit to that singular focus every day.
One of the best and most recent examples of this focus in action might be Apple computers. We have probably all read or heard about Steve Jobs almost maniacal focus on engineering and producing a very limited line of truly great, elegant products well before he could actually prove that there was a market for the products. His genius, dedication and drive to build truly great products we didn’t even know we needed before Apple introduced them to the world stands out in business history right next to the introduction of the Model T, the telephone, and the internet to the general public. All of these products and services were initially only available to a select few, and many people discounted their commercial viability. The value of Apple computer has created incredible market value and wealth, while we can hardly remember the names of many of their competitors. We see this very same dynamic in action in many industries and companies today.
I am good friends with some of the senior guys over at Jersey Mikes. Over the years Jersey Mikes has become a powerhouse in their segment, with great owners operating great stores in communities across America. When you first look at Jersey Mike’s, you may point to a number of their competitive advantages as being the key driver to their incredible success. Then take a minute to speak to their franchise partners, and the people in the communities in which they operate. Jersey Mikes invests a tremendous amount of time, energy and money building up their franchise partners in the communities in which they operate. In just the month of March alone they gave over $1.7 MM to local charities through their franchise partners. Is it any wonder that their founder and CEO, Peter Cancro, was named the “Entrepreneur of the Year” by the International Franchise Association at their recent annual meeting? Anyone one who has ever met or spent time with Pete instantly knows what he and his company is all about. His reputation for and dedication to giving back and making a difference in the lives of both his franchisees and in the communities they serve is absolutely infectious.
At Hurricane Grill & Wings our mission statement is quite simply to “Build Enduring Value for Our Franchise Partners”. That’s it; nothing else trumps that one overarching statement in driving the direction and decision making for the brand on a daily basis. All of our strategies, tactics, investments and focus are measured against that mission. We see and dismiss opportunities every day that would make the parent franchise company more profitable and allow us to invest less yet grow even faster than we already are. The long term success of our franchise partners and the brand overall is being built on a clear, simple statement everyone can understand and measure themselves against. I have seen us do things to insure the success of our owners that go far beyond the call of duty or what anyone would ever reasonably expect us to do. It gives everyone on our team purpose and direction in making decisions throughout each day. We are already seeing a substantial separation between ourselves and the competition as they seek to grow at any cost with little purpose or focus other than building a profitable franchise corporation.
I will never forget the story about the FedEx employee that went way above and beyond the call of duty to accomplish the mission of his company. During a blizzard in the Sierra mountains the telephone lines went down, leaving the local FedEx office without phone service, or any way of connecting with customers. A junior FedEx employee decided to rent a helicopter to fix the problem. Without asking permission from his managers, he put the helicopter on his personal American Express card and instructed the pilot to fly to the top of the mountain where the failed equipment was located. There, the employee jumped onto the snow-covered mountaintop, and waded three-quarters of a mile in chest-deep snow to fix the line to get FedEx back in business. We all know the phenomenal success that FedEx became based on a clear mission and brand promise, “when it absolutely, positively has to be there overnight”.
When you are considering where to invest your time, money and energy, look deeply into the core values of the brand. Look beyond what they say in their franchise brochures and in their sales pitches. Great wealth and success rarely happen overnight or by accident. Great enduring companies are built by great people stone by stone and step by step working together with a clear vision and purpose. It doesn’t happen every day, but when a great brand comes along with great values, vision and a clear compelling mission, join them for the long haul and you will be rewarded!