Building Future Success Survey Report (April '10)

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    Building Future SuccessBuilding Future SuccessResults & Analysis of Survey 2010Results & Analysis of Survey 2010

    April, 2010April, 2010

    NOTE: This presentationNOTE: This presentation--report is incomplete without the accompanying discussion.report is incomplete without the accompanying discussion.

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    2

    Table of contents

    Survey 2010 objectives, content, structure & rollout plan Survey results & analysis:

    Response ratio & demographics

    Findings: Information & Knowledge-Sharing Brand Strategy/Success

    Fostering One System & Trust Operational Execution/Excellence Profitability & Growth Top Challenges & Suggestions Summary of Top Issues

    Partnership Effectiveness Scorecard Comparisons with 2007 & 2008 surveys

    Recommended actions

    Appendix- Scorecard Committee members, 2010 survey questionnaire

    & past survey results

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    Survey objectivespurpose

    3

    Our 2010 Franchise survey was aimed at identifying:

    barriers in system that interfere with us working effectively

    together & with KFCC;

    the top 2-5 issues of concern, & improvement actions, we all

    agree on;

    our strengths, successes, whats working & wins- not just

    issues, or problems.

    Build stronger organization trust & partnership with KFCC

    Measure & benchmark, over time, how were doing to enable

    calibration of future action

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    Survey content and structure

    This years survey asked 19 questions, including 3 that

    solicited open-ended comments & suggestions Questions were developed in late 2009 by Joan Bowling, her

    Balanced Scorecard Committee members, with Sr. KFCC

    management input & assistance from an independent

    consultant, Mike Takla (MGT & Associates)

    The survey was organized along 5 Effectiveness Factors:

    Information & Knowledge-Sharing

    Brand Strategy/Success

    Fostering One System & Trust

    Operational Execution/Excellence

    Profitability & Growth

    4

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    Survey distribution and rollout

    Target AKFCF recipients (539):Target AKFCF recipients (539): One survey per franchise, letting larger ones decide who else on their

    management teams should also be invited to complete questionnaire.

    2010 survey rollout & feedback:2010 survey rollout & feedback: Survey launched & available for completion at Feb./10 Convention;

    3rd party supplier (Survey Monkey) handled on-line collection &

    consolidation of survey results; Summarized survey data went to Mike Takla & then AKFCFs BSC

    Committee to analyze findings & develop priorities & recommended

    actions;

    Survey findings, draft priorities & recommended actions sent to DanYagoda & AKFCFs leadership team for discussion & approval;

    Survey results & future actions made available in early April;

    Town hall meetings, AKFCF Newsletter, & local presentations to be

    used to communicate survey results, planned actions & to solicit

    additional feedback & opinions.

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    Table of contents

    Survey 2010 objectives, content, structure & rollout plan Survey results & analysis:

    Response ratio & demographics

    Findings: Information & Knowledge-Sharing Brand Strategy/Success

    Fostering One System & Trust Operational Execution/Excellence Profitability & Growth Top Challenges & Suggestions Summary of Top Issues

    Partnership Effectiveness Scorecard Comparisons with 2007 & 2008 surveys

    Recommended actions

    Appendix- Scorecard Committee members, 2010 survey questionnaire

    & past survey results

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    Survey results: Response ratio and demographics

    Highest AKFCF survey response ever at 74%*

    7

    N= 397/539 (74%)*

    Past AKFCF Scorecard surveys*:

    Spring '07- 178/539 (33%) Fall '07- 184/539 (34%) Fall '08- 268/539 (49%)

    How many restaurants do you operate?How many restaurants do you operate?

    Which regional association do you belong to?Which regional association do you belong to?

    NOTE: Numbers might not total 100% because not everyone answered all questions.

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    Survey results:

    Information and knowledge-sharing

    47%47%

    63%63%

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    Survey results: Information & Knowledge-sharing

    Significant findings

    Almost of franchisees (47%) believe they have the

    information & know-how to successfully operate their

    restaurants; 27% disagree;

    Only about of all respondents believe there are

    productive ways to share information & best practices

    & that information about the brand is communicated &

    distributed in a timely & effective manner; 63% dont believe that financial data, used to make

    business decisions, is shared in an open & effective

    manner.

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    Survey results:

    Brand Strategy/Success

    71%71%

    55%55%

    83%83% 81%81%

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    Survey results: Brand Strategy/Success

    Significant findings

    71% dont believe that the current brand vision & strategy

    are clear;

    83% dont believe we have a strong Marketing calendarthat will drive sales growth & 81% dont think that KFCs

    product development provides a pipeline of innovative &

    cost-effective products;

    Just over half of franchisees (55%) believe that were not

    responding, effectively & promptly, to address customer

    issues & needs;

    Data suggests that many franchisees believe: customer-related issues & needs are effectively being

    addressed at the store level, but not on a national basis; much more product testing is needed before launches; were making quick product changes but some are too

    quick, not thought out enough &/or are not the rightchanges we should be making.

    Topic with 3rd lowestrespondent ratings.

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    Survey results: Fostering One System & Trust

    Significant findings

    84% dont believe that franchisees & KFCC leaders work

    jointly, in a spirit of trust & mutual respect, toward brand

    growth & success; 80% dont believe that franchisees & KFCC are responsive

    to each others concerns- not enough give & take on

    KFCCs part;

    Almost of all franchisees (74%) dont believe thathealthy debate & 2-way dialogue is occurring between

    franchisees & KFCC.

    Topic with 2nd lowest

    respondent ratings.

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    Survey results:

    Operational Execution/Excellence

    46%46%

    47%47%

    48%48%

    60%60%

    55%55%

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    Survey results: Operational Execution/Excellence

    Significant findings

    Less than of all franchisees (46%) believe thatoperational & performance standards are clear &

    reasonable & that theyre consistently applied &executed on a nationwide basis, including inspectionstandards (47%);

    Less than (48%) believe that knowledge, resources &support are provided to achieve operational goals &

    objectives 60% dont believe that training is reliable, accessible &cost-effective. Although the move towards digital, on-linetraining appears, on the surface, to be a good idea: KFCC has done a very poor job of providing quality,bug-free training for the monthly fee it charges franchises; most restaurants have a very limited number of computers to

    support training initiatives; training oftentimes interferes customer service delivery.

    55% dont believe were effectively leveraging technology &working towards continual improvement & simplified

    operations.

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    Survey results:

    Profitability and Growth

    82%82%

    84%84%

    80%80%

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    Survey results: Profitability & Growth

    Significant findings

    82% of franchisees dont believe that were doing all we

    can to improve business profitability- many are hurting;

    84% dont believe that new builds & remodelledrestaurants are cost-effective- a major lack of

    endorsement of KFCCs current remodelling strategy;

    80% dont believe that products & promotions, rolled out

    this year, were profitable for their organization- a major

    lack of endorsement of KFCCs current Marketing &promo strategies;

    The very small minority of franchisees, that disagree with

    the above (4-8%), are likely: smaller restaurants, in rural areas, not heavily impacted

    by current upgrade &/or Marketing/promo strategies; restaurants who have been rescued by KFCC, in some

    way, & are not feeling the hurt as intensely as others.

    Topic with lowest

    respondent ratings.

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    Lowest rated effectiveness factors

    1

    2

    3

    4

    5 3.3. Brand Strategy/SuccessBrand Strategy/Success (1.8) Brand vision & strategy unclear (71%)(71%) System too slow in addressing customer issues & needs (55%)(55%)

    Weak Marketing calendar driving sales growth (83%)(83%)

    Weak product development for innovative & cost-effective products(81%)(81%)

    1.1. Profitability & GrowthProfitability & Growth (1.4) Not enough being done to improve profitability (82%)(82%)

    New builds & remodels not cost-effective (84%)(84%)

    Products & promotions unprofitable (80%)(80%)

    2.2. Fostering "One" System & TrustFostering "One" System & Trust (1.6) Trust & mutual respect lacking (84%)(84%)

    Unresponsiveness to each others concerns (80%)(80%)

    Healthy debate & 2-way dialogue absent (74%)(74%)

    CoreCore

    RequirementRequirement

    18

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    Table of contents

    Survey 2010 objectives, content, structure & rollout plan Survey results & analysis:

    Response ratio & demographics Findings:

    Information & Knowledge-Sharing Brand Strategy/Success Fostering One System & Trust Operational Execution/Excellence Profitability & Growth Top Challenges & Suggestions Summary of Top Issues

    Partnership Effectiveness Scorecard Comparisons with 2007 & 2008 surveys

    Recommended actions

    Appendix- Scorecard Committee members, 2010 survey questionnaire

    & past survey results

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    Survey results: Top Challenges & Suggestions (784 comments*)

    Profitability, mutual respect and goal-alignment

    Q.1: Biggest challenge that franchisees and KFCC need to address together?

    1. Achieving profitabilityprofitability & sales growthsales growth.2. Building trust & mutual respecttrust & mutual respect to beat competition, not each other.

    3. More leadershipleadership teamwork, cooperation, communications & compromise-

    Partners, not dysfunctional enemies.

    4. Goal & process alignmentGoal & process alignment on brand positioning, operations simplification,decision-making rights, at operating level, & better information/data-sharing.

    Joint KFCC/AKFCFJoint KFCC/AKFCF--related commentsrelated comments

    KFCCKFCC--related commentsrelated comments

    1. RecognitionRecognition of franchisees core role, knowledge & expertise- Too much top

    down, condescension, arrogance, lack of listening, understandingbullying.

    2. Too many new & unprofitable productsToo many new & unprofitable products are killing bottom line. Promote all

    products, not just Marketings pet initiatives.

    3. Overly-rigid upgradesupgrades notnot costcost--effectiveeffective & require urgent attention.

    (Contd)*279 answered question; by order of most frequently mentioned.

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    Survey results: Top Challenges & Suggestions (784 comments)

    Profitability, mutual respect and goal-alignment

    1. Creating relevant brand & productsbrand & products for customers which have been lost- Back

    to basics & Original Recipe. Too many poor quality, unprofitable products now

    on a bloated menu. More appeal to younger generation with innovative, healthy

    offerings.

    2. Lowering offood & laborfood & labor--related costsrelated costs.

    3. Clear & effective Marketing program, advertizing & promosMarketing program, advertizing & promos based on facts

    & customer needs, not gut feel. More rigorous product testing before launches.

    Lack of overall impact & success that Marketing (& remodels) have had on sales-

    completely out of touch with reality. Were discounting our products away.4. More & better front-line trainingtraining, which is practically non-existent now.

    5. Fairer & more balanced Inspectors/inspectionsInspectors/inspections- Their sole mission appears to

    be to support KFCCs agenda of putting franchisees out of business to gain more

    control.

    Business PracticesBusiness Practices--related commentsrelated comments

    Q.1: Biggest challenge that franchisees and KFCC need to address together?

    (Contd) 21

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    Survey results: Top Challenges & Suggestions (784 comments*)

    Communications, information-sharing and

    business alignment

    Q.2: . How can franchisees and franchise organizations be more effective?

    1. KFCC needs to listen to, respect & trust franchisees knowledge, expertise &viewpoints.

    2. More & better sharing of information & data- financial, marketing, facilities.

    TwoTwo--way Communicationsway Communications

    1. Cross-system sharing of best practices.2. Better:

    longer-range planning; store-level training for Managers & teams; innovation & more open-mindedness; access to professional services & experts to assist in field; cost control.

    3. Clear understanding of needs, common business goals, strategies & tactics-

    One agenda, not two.

    4. Profitable Marketing & promotional programs that clearly add to bottom line.

    5. Sharing of decision-making between KFCC & franchisees- new products, ads.

    Business Strategies & ProcessesBusiness Strategies & Processes

    *238 answered question; by order of most frequently mentioned. (Contd)

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    Survey results: Top Challenges & Suggestions (784 comments)

    Communications, information-sharing and

    business alignment

    Q.2: . How can franchisees and franchise organizations be more effective?

    1. We need to stand together with strength, solidarity & firmness.2. Work with KFCC in these tough times as partners, not enemies.

    3. Focus on the future & competitors, not on the past & inward against each

    other.

    4. KFCC needs to get their vindictive Inspectors off our backs.5. Current NCAC issues need to be resolved. NCAC needs to get its act together

    & not simply sit back & blame KFCC for poor products.

    Other Notable SuggestionsOther Notable Suggestions

    24

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    Survey results: Top Challenges & Suggestions (784 comments)

    KFCC needs to understand the formula:

    Franchisee success=KFC successQ.3: How can KFCC be more effective?

    1. Clearer business vision, goals, strategies & tactics, incl. alignment on these.2. Higher quality & cost-effective training, incl. sharing of best practices.

    3. More rigorous testing of new products before launch that everyone

    participates in; use RRP.

    4. Simplify operations & menus.5. Rebalance the role of the gotcha Inspectors who currently are totally

    counterproductive.

    6. Quit giving away new products & diluting value.

    7. Stick to proven basics (Original Recipe, COB) & new products that arent

    capital/equipment intensive.

    Business Strategies & ProcessesBusiness Strategies & Processes

    (Contd)

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    Survey results: Top Challenges & Suggestions (784 comments)

    KFCC needs to understand the formula:

    Franchisee success=KFC success

    1. Be more realistic concerning facility actions in these tough economic times.2. Stop operating on gut feel & financially onerous remodels based on

    international markets. Our reality is meeting North American customer needs.

    3. Visit & spend more time in restaurants to better understand our business

    environment, customers & restaurant business models/success factors.

    4. Give us new U.S.- savvy leaders who understand our customers, & can workwith franchisees on a win-win basis, not foreigners who dont & cant.

    Other Notable SuggestionsOther Notable Suggestions

    Q.3: How can KFCC be more effective?

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    Summary of top issues

    Urgent, deep-rooted and multi-layered

    28

    Whats broken: 2-way communications & information/data-sharing; alignment on business vision, goals, strategies & tactics; clear, effective & profitable Marketing & promo programs; bloated menus with too many new, unprofitable products; strong product & labor cost-management; rigorous new product testing before launch;

    unrealistic & costly facility upgrades; relevant, cost-effective store-level training; fair & balanced Inspectors/inspections.

    WhatWhats broken:s broken: 2-way communications & information/data-sharing; alignment on business vision, goals, strategies & tactics; clear, effective & profitable Marketing & promo programs; bloated menus with too many new, unprofitable products; strong product & labor cost-management; rigorous new product testing before launch;

    unrealistic & costly facility upgrades; relevant, cost-effective store-level training; fair & balanced Inspectors/inspections.

    Whats lacking: mutual trust & respect;

    understanding of N. American customer & needs; external focus on customers & beating competition; cooperative problem-solving in lieu of legal recourse; leadership teamwork, cooperation & compromise; recognition of franchisees as key stakeholders, theirneeds, expertise & viewpoints;

    top KFCC leadership credibility with franchisee

    community.

    WhatWhats lacking:s lacking: mutual trust & respect; understanding of N. American customer & needs; external focus on customers & beating competition; cooperative problem-solving in lieu of legal recourse; leadership teamwork, cooperation & compromise; recognition of franchisees as key stakeholders, theirneeds, expertise & viewpoints;

    top KFCC leadership credibility with franchiseecommunity.

    Business Strategy& Processes

    ManagementStyle & Behavior

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    Table of contents

    Survey 2010 objectives, content, structure & rollout plan Survey results & analysis:

    Response ratio & demographics Findings:

    Information & Knowledge-Sharing Brand Strategy/Success Fostering One System & Trust Operational Execution/Excellence Profitability & Growth Top Challenges & Suggestions Summary of Top Issues

    Partnership Effectiveness Scorecard Comparisons with 2007 & 2008 surveys Recommended actions

    Appendix- Scorecard Committee members, 2010 survey questionnaire

    & past survey results

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    AKFCF/KFCC partnership scorecard

    Information & KnowledgeInformation & Knowledge--SharingSharing

    Brand Strategy/SuccessBrand Strategy/Success

    FosteringFostering One SystemOne System & Trust& Trust

    Operational Execution/ExcellenceOperational Execution/Excellence

    Profitability & GrowthProfitability & Growth

    PA

    RTNERSHI

    P

    EFFEC

    TIVNESS

    2.72.7

    1.81.8

    1.61.6

    2.32.3

    1.41.4

    5 Effectiveness Factors5 Effectiveness FactorsAverageAverage

    Scores*Scores*Average OverallAverage Overall

    EffectivenessEffectiveness

    1.91.9ActionAction

    PlanningPlanning

    30* Not weighted

    HighlyIneffective

    HighlyEffective&Target

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    Score comparisons:

    Years 07, 08 and 10

    Spring 2007Spring 2007 Communication: 2.6

    Innovation: 2.5 Training: 1.9

    Profitability: 2.3

    KFC Brand Value: 2.3

    Fall 2007Fall 2007 Communication: 2.2

    Innovation: 2.1 Training: 1.9

    Profitability: 1.7

    KFC Brand Value: 1.9

    Fall 2008Fall 2008 Communication: 2.3

    Innovation: 1.9 Training: 1.9

    Profitability: 1.7

    KFC Brand Value: 1.7

    Winter 2010Winter 2010

    Information & KnowledgeInformation & Knowledge--SharingSharing

    Brand Strategy/SuccessBrand Strategy/Success

    FosteringFostering One SystemOne System & Trust& Trust

    Operational Execution/ExcellenceOperational Execution/Excellence

    Profitability & GrowthProfitability & Growth

    2.72.7

    1.81.8

    1.61.6

    2.32.3

    1.41.4

    CommunicationCommunication

    KFC Brand ValueKFC Brand ValueInnovationInnovation

    TrainingTraining

    ProfitabilityProfitability

    CommunicationCommunication

    31

    55Target

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    Table of contents

    Survey 2010 objectives, content, structure & rollout plan Survey results & analysis:

    Response ratio & demographics Findings:

    Information & Knowledge-Sharing Brand Strategy/Success Fostering One System & Trust Operational Execution/Excellence Profitability & Growth Top Challenges & Suggestions Summary of Top Issues

    Partnership Effectiveness Scorecard Comparisons with 2007 & 2008 surveys Recommended actions

    Appendix- Scorecard Committee members, 2010 survey questionnaire

    & past survey results

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    Key concerns and 4 indicated actions-KFCC

    33(Contd)

    Rebuild TrustFranchisee concerns:Lack of trust in leadership. Lack of recognition of franchisees core role, knowledge & expertise- Too muchtop down, condescension, arrogance, lack of listening, understanding, bullying.63% dont believe that financial data, used to make business decisions, is shared in an open & effectivemanner. 71% dont believe that the current brand vision & strategy are clear. 84% dont believe thatfranchisees & KFCC leaders work jointly, in a spirit of trust & mutual respect, toward brand growth &success. 80% dont believe that franchisees & KFCC are responsive to each others concerns- not enoughgive & take on KFCCs part. 74% of franchisees dont believe that healthy debate & two-way dialogue isoccurring between franchisees & KFCC.

    Action:Top KFCC leadership needs to rebuild the trust & credibility theyve lost with all the franchisee community.KFCC Leadership needs to demonstrate leadership with honor & integrity. KFCC needs to listen to, respect& trust franchisees knowledge, expertise & viewpoints.

    Quit bullying, bulldozing, attacking & policing. This is a partnership, not a dictatorship. Drop the old school

    management techniques.

    Listen to the voice & ideas of franchisees & support them.

    Create a climate where honest exchange of ideas are encouraged; more transparency. More & bettersharing of information & data- financial, marketing, facilities. Provide straight answers to questions & stopdancing around the issues & data.

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    Key concerns and 4 indicated actions-

    KFCC

    (Contd)

    New Products

    Franchisee concerns:Too many new & unprofitable products are killing bottom line.

    71% feel the brand vision & strategy are unclear. 80% believe that the new products & promotions areunprofitable. 83% dont believe we have a strong marketing calendar that will drive sales growth. 81%dont think that KFCs product development process provides a pipeline of innovative & cost-effectiveproducts.We are making quick product changes, but some are too quick, not thought out enough, &/or are not theright changes we should be making. NCAC needs to get its act together & not simply sit back & blame

    KFCC for poor products.

    Action:Need much better process & discipline prior to new product launches. A more disciplined approach isneeded than is currently followed. Adopt & follow the Restaurant Ready Process. Early Franchiseeparticipation is essential to help ensure all aspects of a specific promotion get a green light, with no

    backtracking, & to increase the odds of a successful product launch.More rigorous product testing before launches is required. Red Lights must be adhered to. EmotionalGreen Lights are very risky. Franchisees should be involved throughout the development process.Last-minute, up-or-down franchisee votes are very risky.

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    Key concerns and 4 indicated actions-KFCC

    (Contd)

    Operational Excellence & Training

    Franchisee concerns:Only about one-third of respondents believe there are currently productive ways to share information & bestpractices & that information about the brand is communicated & distributed in a timely & effective manner.Less than half (48%) believe that sufficient knowledge, resources & support are provided to achieveoperational goals & objectives.Less than half (46%) of franchisees believe that operational & performance standards are clear & reasonable& that they are consistently applied & executed on a nationwide basis, including inspection standards.KFCC needs to get their vindictive Inspectors off our backs. Inspections need to be fairer & more balanced.Inspectors sole mission appears to be to support KFCCs agenda of putting franchisees out of business to

    gain more control.60% do not believe that training is reliable, accessible & cost-effective. Although the move towards digital,on-line training appears, on the surface, to be a good idea, KFCC has done a very poor job of providingquality, bug-free training for the monthly fee it charges franchises. Most restaurants have a very limitednumber of computers to support training initiatives. 60% dont believe that training is reliable, accessible &cost-effective.

    Action:Improve availability of tools, knowledge, resources & support, incl. reliable, cost-effective & accessibletraining. Improve cross-system sharing for sharing best practices.

    Training needs to be accessible to all Franchisees, easy to use & reliable. Learning Zone should be free, tothe entire system, so we can Step Change operations at every store & more effectively deliver customer

    service.35

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    Key concerns and 4 indicated actions-KFCC

    (Contd)

    Business ModelFranchisee concerns:Business is not profitable. Overly-rigid upgrades not cost-effective & require urgent attention.

    82% of franchisees dont believe that we are doing all we can to improve business profitability.

    Many are hurting. 63% dont believe that financial data, used to make business decisions, is shared in anopen & effective manner. Overly-rigid upgrades are not cost-effective. 84% dont believe that new builds& remodeled restaurants are cost-effective.

    Action:Care about the business growth & success of franchisees, which clearly isnt the case now.Jointly identify initiatives directly aimed at improving both KFCC & franchisee profitability.

    Identify processes & joint actions to ensure cost-effective builds & remodels, incl. development ofinnovative products & promotions. Develop profitable marketing & promotional programs that clearlyadd to bottom line. Include franchisee input in preparing the business case.

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    AKFCF actions going forward

    Remodels & new builds- Sponsor AKFCF facilities council to share

    best practices & cost savings ideas for remodels & new builds to helpcalibrate ROI.

    Information exchange- Develop process, whereby local advertisingco-ops can share information on new products & promotions, under

    direction of Larry Light & Joan Kiddon.

    Training- Franchisee developed, or recommended, trainingprograms to be used at regional meetings, or as webinars- programs

    such as Harmans 7-Steps to Margin Improvement.

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    Table of contents

    Survey 2010 objectives, content, structure & rollout plan Survey results & analysis:

    Response ratio & demographics Findings:

    Information & Knowledge-Sharing Brand Strategy/Success Fostering One System & Trust

    Operational Execution/Excellence Profitability & Growth Top Challenges & Suggestions Summary of Top Issues

    Partnership Effectiveness Scorecard Comparisons with 2007 & 2008 surveys Recommended actions

    Appendix- Scorecard Committee members, 2010 survey questionnaire

    & past survey results

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    Balanced Scorecard Committee members

    Committee Chair:Committee Chair: Joan Bowling

    Committee Members:Committee Members:

    Keith Cole

    Joe Kendall

    Mary Leonida

    Mark Steinke Justin Stewart

    Wen Wagstaff

    Survey Admin. & Support:Survey Admin. & Support: Debbie Newton

    39

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    2010 survey questionnaire

    40

    Section 1: Tell Us About You

    How many restaurants do you operate?

    More than 15

    Between 5 and 15

    Less than 5

    Which regional association do you belong to?

    Southern California

    Northwest

    Upper Midwest

    Southwest

    Great Lakes

    Southeast

    Northeast

    (Contd)

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    2010 survey questionnaire

    41

    Section 2: Rating Scale, Topic Areas and Statements

    Information and Knowledge-Sharing

    Financial data, used to make business

    decisions, is shared in an open and

    effective manner

    Information about the brand and

    operations is distributed in a timely

    and effective manner

    There is a productive way to share

    information and best practices amongKFCC and franchisees

    Franchisees have the information and

    know-how they need to be successful

    Brand Strategy and Success

    KFC product development provides

    us with a successful pipeline of

    innovative and cost-effective products

    We have a strong marketing calendar

    that will drive sales growth

    Our system responds promptly and

    effectively to act on and addresscustomer issues and needs

    The brand vision and strategy are

    clear to the system

    (Contd)

    1 - Strongly Disagree2 - Disagree3 - Neither Agree Nor Disagree4 - Agree5 - Strongly Agree

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    2010 survey questionnaire

    42(Contd)

    Section 2: Rating Scale, Topic Areas and Statements

    Fostering One System and Trust

    Healthy debate and two-way

    dialogue occurs between KFCC

    and franchisees

    Franchisees and KFCC are

    responsive to each othersconcerns

    Franchisees and KFCC leaders

    work jointly in a spirit of trust

    and mutual respect toward brand

    growth and success

    Operational Execution/Excellence

    We are effectively leveraging

    technology and working towards

    continual improvement and simplified

    operations

    Training is reliable, cost-effective and

    easily accessible to franchisees,

    managers and team members

    Relevant tools- knowledge, resources

    and support- are provided to achieve

    operational goals and objectives

    We consistently execute on our

    operations and performance standards

    on a nationwide basis

    We have clear operations and

    performance standards for our

    restaurants

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    2010 survey questionnaire

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    Section 2: Rating Scale, Topic Areas and

    Statements

    Profitability and Growth

    Products and promotions, that were rolled out

    nationwide this year, were profitable for your

    organization

    Current business plans for new builds and remodeled

    restaurants are cost-effective

    We are doing all we can, as a system, to improve the

    profitability of the business

    Section 3: Top Challenges andSuggestions

    1. What is the biggest challenge thatfranchisees and KFCC need to addresstogether?

    2. How can franchisees and franchiseorganizations be more effective?

    3. How can KFCC be more effective?

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    Spring 07 survey results

    BSC

    MEASURE WEIGHT Target AVERAGE

    COMMUNICATION 20% 2.6

    Communication to franchisees that is timely, accurate and 100% focused on domestic KFC brand7% 5.0

    3.1

    KFCC support of regional meetings and AKFCF convention 5% 5.0 2.9

    Share financial information 5% 5.0 1.9

    Share 2N1 financial information/best practices 3% 5.0 1.6

    INNOVATION 25% 2.5

    Simplify operations (especially back of house) 10% 5.0 2.2

    Appeal to the younger generation, both as customers and employees10% 5.0

    2.5

    Healthy products that are profitable 3% 5.0 2.0

    Regional products 2% 5.0 1.9

    TRAINING 25% 1.9

    KFCC support franchisees with fully staffed trainers and relevant materials.20% 5.0

    1.7

    Constructive CER evaluations and Champs scores used for training purposes. 5% 5.0 2.1

    PROFITABILITY 30% 2.3

    Sustain Sales and Transaction Growth 10% 5.0 2.5

    New Products that fit a realistic food and paper cost 10% 5.0 2.5

    Lower Building and Equipment Costs 7% 5.0 1.8

    Cost shifting to franchisees 3% 5.0 1.9

    KFC BRAND VALUE 100% 2.3

    N= 178/539 (33%)

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