Growing a Happy and Healthy Franchise System...Success Magazine Satisfaction Survey 1) You are very...

Franchisee Satisfaction:

Growing a Happy and Healthy Franchise System

Larry TateGolden Corral

Senior Vice President of Franchise Sales

Success Magazine Satisfaction Survey

1) You are very satisfied with your decision to buy your franchise.

2) The franchise has given you the financial return youexpected.

3) You are very satisfied with the training you have received as a franchisee in this system.

4) The franchisor provides you with excellent on-sitefield training.

5) You are very satisfied with the advertising andpublic-relations support of the franchisor.

6) You are very satisfied with the computerized operating system that the franchisor makesavailable to you.

7) The franchisor does a very good job of communicating with you through the use of suchtelecommunications technology as videoconferencing.

8) You are very satisfied with the frequency withwhich the franchisor updates training programsand operational manuals to keep up with the changing buying habits of customers.

9) You are very satisfied with the accessibility of executives of the parent company.

10) You are very satisfied with the importance thatthe franchisor attaches to the franchisee advisory council.

11) You are very satisfied with your franchisor’sfranchisee reward and recognition programs.

12) The franchisor has set up a very effectivemediation system to resolve franchiseecomplaints.

13) You are very satisfied with the financial health of your franchisor.

14) Knowing what you know now, you would buy oneor more franchises in this system again.

Todd Recknagel

Mr. HandymanPresident

Kristi Mailloux

Molly MaidPresident

Kerry Olson

International Dairy QueenSenior Attorney

Motivating Factors for FranchiseeHappiness:

• Strong profitable model

• Open, regular, communication withFranchise Advisory Council andFranchisees

• Constant attention to a strong, respectful and mutually beneficial relationship

Todd Recknagel

Mr. HandymanPresident

Mr. Handyman New Locations/ New Launches

2533

7154

2003 2004 2005 2006

New Territories(New units sold + Expansions)

Territories Covered2005 2006

Mr. Handyman 201 245

Handyman Matters 113 116

House Doctors 198 166

Handyman Connection 173 159

Mr. Handyman US Consumer Sales

2005 2006

Consumer Sales Comparison($15,803,542 increase = 43.5% growth)

$36,332,831$52,136,373

Strong Profitable, Defined ModelA) Profitability Benchmarking Study

B) Regularly Evaluate Critical Metrics

C) Communicate Target Expenses,Profitability and Key Metrics

D) What was learned

Franchisor Manages the

ProcessInternal

Competition

BestPractices

CommunicateWith System

Measure KeyMetrics

Strong Profitable, Defined Model

A) Profitability Benchmarking Study

Profitability Benchmarking Study

$638,080$806,286 $817,018

2004 2005 2006

Revenue & Profit

2004 Profit

= 12.08%

2005 Profit

= 15.73%

2006 Profit

= 23.98%

Strong Profitable, Defined Model

A) Profitability Benchmarking Study

B) Regularly Evaluate Critical Metrics

Average Weekly Sales for the dates of August 6th - November 19th

$6,000

$6,500

$7,000

$7,500

$8,000

$8,500

$9,000

$9,500

$10,000

8/6 8/13 8/20 8/27 9/3 9/10 9/17TW

9/24TW

10/1TW

10/8TW

10/15 10/22 10/29 11/5 11/12 11/19

Entire System

Locations participating inthe CSR Training

CSR TRAINING

6 week average of $600/week above the system before

training

6 week average of $1400/week above

the system after training

Critical Metrics CSR Training

Strong Profitable, Defined Model

A) Profitability Benchmarking Study

B) Regularly Evaluate Critical Metrics

C) Communicate Target Expenses,Profitability and Key Metrics

D) What was learned

Franchises within 10 miles

0 1 2 3+# of Neighboring Owners

within 10 Miles

Average 2006 Sales for Owners with Neighbors within 10 Miles(Includes all active owners)

$221,406$316,376

$333,647$440,354

Sharing a Border

$257,710$305,680

$375,003$498,467

0 1 2 3+# of Neighboring Owners Sharing a Border

Average 2006 Sales for Owners with Neighbors Sharing a Border

(Includes all active owners)

Kristi Mailloux

Molly MaidPresident

Molly Maid Case Study

• Franchise operating in U.S. for over 20 years

• Over 400 franchises• Large number of long term owners• Overview of challenges encountered

What We ChangedA) Now hold regular meetings with FAC to get

input on key priorities and strategies• Quarterly Meetings• Strategic planning offsite

meeting every two yearso FAC sub-committees created to

address specific short term projects B) Communicate key priorities and strategies

to franchisees• Post FAC meeting summary minutes • Regular email updates on upcoming

events, system enhancements, marketing program launches

B) Communicate key priorities and strategiesto franchisees (continued)• Team site postings

B) Communicate key priorities and strategies tofranchisees (continued)

• Monthly all owner conference calls• Annual conventions and regional

meetingsC) Executives accessible to franchisees

• Return phone calls and emails to franchisees within 24 hours

• “Ask President” portion of conference calls

• Executive attendance at all conventions and regional meetings

D) Consistency with the message• Deliver the message the same in all

formats

Kerry Olson

International Dairy QueenSenior Attorney

Constant Attention to a Strong, Respectfuland Mutually Beneficial Relationship

A) There is no “vs” in relationship• Eradicate “us versus them” attitudes and

behaviorsB) Involvement and commitment at all levels –

entry to executive• Participation in councils and committees• Attitude and approach of the support

personalC) Be willing to make the investment

• Time – diligently communicate and strategically roll out initiatives, changes

• Money – demonstrate the commitment

Constant Attention (continued)D) Recognize that satisfaction may mean

different things for different franchisees• Financial success• Reality matching the promise• Feeling empowered

E) Do not let emotion dictate enforcement• Compliance approach• Conflict resolution

Questions and Answers