July 2010
Franchising World
By John Reynolds, CFE
International Franchise Association members hit the “take home value jackpot” at the Las Vegas Hilton during the association’s inaugural Multi-Unit Franchise Best Practices Conference in May. More than 300 attendees, including multibrand, multi-unit, and single-unit franchisees, area developers, franchisors, and suppliers, participated in the conference.
Top executives of major brands and CEOs of small and large multi-unit franchises headlined the conference program which drew kudos from attendees.
“I was most impressed by the caliber of speakers, relevance of the content, and diversity of the franchise groups in attendance,” said Aziz Hashim, president and CEO, National Restaurant Development, Inc., a multi-unit franchisee of Checkers/Rally’s, Popeye’s and Moe’s Southwest Grill.
“I learned so much from this conference focusing on the ‘how-tos’ for franchisees looking to grow. I took away many tips and techniques that others have used to expand their business from financing, operations, people development and working with the franchisor,” said John Francis, president, PostNet of Minnesota and Wisconsin. (Read Francis’ experience in “What I Learned at the Multi Unit Conference” on page 55. ) One theme that quickly emerged from the conference was “collaboration and cooperation.” Luncheon keynote speaker Jim Johannesen, executive vice president and COO, McDonald’s USA, stated, “Collaboration, it’s not easy, it’s messy, but we have learned that it is absolutely essential to our success as a brand.”
Johannesen described how McDonald’s’ system of cooperation includes its owner/operators, corporate managers and directors, suppliers and employees. In a lively question and answer session, he fielded many questions about how the restaurant icon reached decisions on topics such as menu changes, pricing, investment in technology, and new initiatives such as the McCafe concept.
Many of the sessions were characterized by exchanges between conference participants and presenters, at times both serious and humorous. During one session, executives from Dunkin’ Brands, McDonald’s, and Subway joined in a discussion about who has the best coffee, an issue that was not resolved by the end of the session.
One feature of the conference was joint presentations by leading experienced executives, both franchisors and franchisees, of some of the best-known brands in the industry. This format idea originated in the conference planning committee, chaired by Lawrence “Doc” Cohen, CFE, a multi-unit franchisee of Great American Cookies, PretzelMaker, Coffee Beanery and TCBY.
“We wanted a program focused on teamwork between the franchisor and franchisee, to look at new ways to enhance the businesses we operate and the best options to grow those businesses,” said Cohen. Panel presentations covered such topics as financing, managing costs, operations, site selection, putting the right team in place and leadership.
“The conference was developed in recognition of the tremendous impact multi-unit operators have on the health and growth of franchising,” said IFA Chairman Ken Walker, CFE, chairman and CEO of Driven Brands.
Walker, in his welcoming address, noted that the conference grew out of IFA’s new Strategic Plan which identified providing programming and services to multi-unit franchisees as one of the association’s top priorities. “This conference is a big part of delivering on that priority and is just the beginning of increasing educational programs and services to multi-unit owners,” he added.
Conference participants were also encouraged to attend the International Council of Shopping Centers’ RECon event next door in the Las Vegas Convention Center at no charge as a complimentary bonus included in the IFA registration package. RECon is the largest gathering of retail real-estate professionals from around the globe. Walker described the partnership between the ICSC and IFA as a venture to leverage each organization’s educational programs to benefit both the franchising and retail real estate industries.
Franchising veteran Jon Luther, Dunkin’ Brands’ executive chairman of the board, kicked off the opening session with four lessons on leadership gleaned from his years of experience. He expanded on four elements of great leadership: values; setting expectations; learning and listening; and being innovative and taking risk. He used examples of his failures and successes to illustrate each element of leadership. George Zografos, CEO of Z Donut Company, a multi-unit Dunkin’ Brands franchisee, introduced Luther and participated in the question and answer session that followed his remarks.
Sessions and Roundtables: Nuts And Bolts
Another theme throughout the conference was a focus on practical solutions to complex problems such as customer service, financial management and continuous training. In one breakout session panelists gave examples of how their systems “operationalize everything that touches the customer,” in the words of Michael Kuzminsky, senior vice president, franchise operations, Church’s Chicken. Aslam Khan, a multi-unit franchisee of Church’s, shared how his management team applied techniques to reduce food and labor costs to turn around underperforming restaurants.
As a bonus, Subway CEO Fred DeLuca, CFE, joined this panel discussion, along with one of his fastest growing area developers Raghu Marwaha. At age 16, Marwaha started working at Subway as a sandwich artist. He is now a multiowner with Subway restaurants located in California. DeLuca advised participants to focus on local store promotions and keep the advertising message simple, adding, “if customers ‘get it’ you don’t need a big advertising budget.” The second day opened with a panel discussion entitled “Obtaining Capital to Grow Your Business: Which Road to Take? Private Equity, Conventional Lenders or SBA?” The panelists included Cohen; David Barr of PMTD Restaurants (KFC and Taco Bell franchisee); Steve Romaniello, CFE, Roark Capital Group managing director; and Robert Bielinski, managing director of CIT Corporate Finance. The session featured an overview of the current capital-access market, its major players, as well as practical advice on finding the private equity group, bank, or other lender that is best suited for a business.
Other breakout sessions during the conference were: Best Practices for Communicating with Management, Best Practices in Margin Improvements, Non-Traditional Sites for Multi-Unit Operators, Multi-Unit Growth Through Multiple Brands, Keeping Your Shadow on The Business, and a discussion by a panel of experts.
Roundtables moderated by franchisors and franchisees included: Local Marketing That Drives New Business, Multi-Unit Ownership: Challenges and Opportunities, Operational Issues Unique to Multi-Unit Owners, Evaluating a Franchisee for Multi-Unit Growth, Non-Traditional Sites for Multi-Unit Operators, Multi-Brand Franchise Leadership, How to Identify and Recruit Multi-Unit Operators, and High Performance Multi-Unit Franchisee Organizations.
Sponsors Get Added Bonus with RECON Prospects
Franchisor and Supplier Forum members sponsored the conference to show support for IFA’s multi-unit initiative and to take advantage of the unique opportunity of access to both IFA and ICSC members attending the RECON event. Early feedback indicated that sponsors were very satisfied with the conference. One sponsor closed a deal with a real estate developer who located him during the conference by using the ICSC preregistration list. Another sponsor said he would likely close two deals with ICSC members met during the conference.
“The attendees were the decisionmakers who we needed to see. We came away with 12 solid leads and another 30 leads in the soft-to-solid range. The conference format and environment was excellent for networking. The connection with ICSC-RECON was excellent for us because we had appointments in advance with others attending the conference. We will gladly return to the IFA – ICSC event next year,” said Michael Slominski, vice president, Direct Technology Innovation, IFA’s preferred vendor for merchant services.
John Reynolds is vice president, new business development and president of the IFA Educational Foundation. He can be reached at 202-662-0764 or
jreynolds@franchise.org .