After yesterday’s jam-packed launch of the Multi-Unit Franchising Conference 2022 (MUFC), it may have seemed hard to top the unmissable sessions and networking opportunities presented. However, the second day of the conference has proven just as essential for multi-unit franchisees, franchisors, and franchising professionals alike; thanks to timely insight, guidance, and expertise from countless franchising experts.
If you didn’t manage to make it along to MUFC this year, or just spent a little too long at one of The Strip’s many bars or restaurants last night, here’s a rundown of the biggest takeaways that the Global Franchise team gleaned from Thursday 31 March.
INTERNATIONAL TRACK: CREATE YOUR PLAYBOOK FOR INTERNATIONAL
- MODERATOR: Glen Helton, vice chairman, BOD
- Len MacPhee, shareholder, Polsinelli
- Matthias Lehner, vice chairman of the German Franchise Association & CEO, Bodystreet
- Suk Singh, president, Aussie Grill
The day began in a slightly different order than yesterday, with the main keynote presentation not kicking off until 10am PST. This allowed time for some engaging discussion panels first thing in the morning, including a very timely conversation about building your international development playbook, moderated by Glen Helton.
“Start at home, because you need to have a very solid foundation in the U.S. before expanding internationally”
Joined by three international experts covering everything from fitness franchises to legal expertise, Glen’s panel discussed the importance of expanding domestically with proficiency and confidence before embarking on overseas development.
“Start at home, because you need to have a very solid foundation in the U.S. before expanding internationally,” said Suk Singh, president of Aussie Grill. “There’s an excellent country to the north or south of the U.S. before you consider going further afield.”
Matthias H. Lehner, CEO of EMS-centric fitness franchise Bodystreet, echoed this sentiment; despite being based in Germany and having a strong European footprint. “If you’re a significant international brand, you need to be in the U.S.,” he said.
The panel went on to discuss the financials behind international expansion, and how franchisors often don’t consider the litany of aspects that can cause a drain on budgets.
“Probably the one thing that U.S. brands don’t think about when setting up their budget is the due diligence process,” explained Len MacPhee. “Knowing who you can trust with your brand in that new market is critical. We recommend a deep dive on background checks, and credit checks on the master franchisee or whoever you’re going to do business with.”
“It’s easy to fool you over dinner, but it’s much harder to do so over three days”
The idea of due diligence formed a large part of the consequent discussion, with Singh explaining how this extends beyond legal and to areas such as real estate. “If you’re going to grow in the Middle East, for example, you need to know the major players. If you don’t, you won’t be able to grow,” he said.
“You also need to spend time with the person who’s going to be in charge of your brand. It’s easy to fool you over dinner, but it’s much harder to do so over three days. You may have a franchise agreement, but the last thing you want to do is have to refer to that; it’s about relationships, so you should be able to sign it and file it away.”
Conversation then turned to the specific expansion strategy that some brands undertake, and that franchisors need to ensure they create realistic roll-outs that don’t place too much control in the hands of international partners.
“A franchisee may sign up to build 50 locations in five years, but what matters most is those first five,“ said Singh. “If they aren’t making money on those, then they won’t get to number six.” This was a viewpoint shared by MacPhee: “Unrealistic development schedules is one of the main mistakes that we see in international development. We’ll often see that you have a short-term number in your development schedule, and then build in the option to expand upon that when it’s delivered.”
“Franchisors saying that they refuse to support or supply franchisees in Russia, for example, is likely an example of a contract breach and so we’ll undoubtedly see fallout from that moving forward”
The panel also touched on the recent crisis in Ukraine, and how brands may sometimes need to pull out of international markets due to unforeseen global incidents. While this is certainly possible to do under the right circumstances, MacPhee cautioned against any sudden, long-lasting decisions: “Franchising has a much different perspective on this compared to if you just have company-owned units, which you can just shut down. Franchisors saying that they refuse to support or supply franchisees in Russia, for example, is likely an example of a contract breach and so we’ll undoubtedly see fallout from that moving forward.”
To close out the session, moderator Glen Helton shared a brief overview of his playbook for international growth, which was inspired by the Denzel Washington sports movie, Remember the Titans:
- 1) Determine the playing field – decide on which market you want
- 2) Pick the right head coach – franchisor leadership that wins
- 3) Build a championship team – select winning talent
- 4) Play to win – choose the right business model
- 5) No penalties – understand the rules and referees
- 6) Ownership mindset – know the cost of ownership up front and manage the business daily
GENERAL SESSION: KEYNOTE SPEAKER – EMMITT SMITH
Following the morning’s panel discussions, attendees all filed back to the Academy Ballroom to hear from the first keynote speaker: Emmitt Smith, a former Dallas Cowboys running back superstar, Dancing with the Stars champion, and a successful real estate investor.
Sean Falk, a multi-unit franchisee for brands such as Great American Cookies, and Scenthound – as well as being the 2013 chairman of the MUFC conference – opened up the session by touching on the positive trend of franchising professionals bringing their kids into the industry. “The next generation of franchising will play a significant role in the future of the industry,” he said.
Emmitt Smith then took the stage, and opened his 45-minute keynote by touching on the importance of embracing change and challenges. Speaking of his career and the entrepreneurial journey in general, he posed the question: “What did we learn through this process, to make us do better when we came out of it?”
“Nobody becomes successful by themselves – it always takes a team”
Smith went on to talk about how challenge isn’t always the issue in our lives, and it is instead our attitude towards challenge that can hold us back. “You have the things in you to be successful,” he said. “Nobody becomes successful by themselves – it always takes a team.”
Speaking on success, Smith also cautioned against riding high on success instead of learning and growing consistently. “Success has a way of making us complacent,” he said. “It’s about continuing to drive forward, and maximize your potential.”
To close out his keynote, Smith spoke about his experience on Dancing with the Stars, and how his determination to practice and improve led him toward success; an anecdote that he compared to the journey of a burgeoning multi-unit franchisee.
“You have in you, everything you need to go from one franchise location to multiple. But have a plan, work your plan, and begin with the end in mind. Plan to get to the end; have the vision of where you want to go, and the success you want to see.”
GENERAL SESSION: ELEVATE THE GUEST EXPERIENCE
- SPEAKER: John Dijulius, founder, president & chief revolution officer, The Dijulius Group
Next up was John Dijulius, who is renowned for his expertise when it comes to customer service and the importance of ensuring that the customer experience is at the forefront of every business decision.
Dijulius began with a simple question for the audience: “Who’s your ideal customer?” From here, he went on to unpack numerous aspects of the customer experience journey, like how price can become irrelevant if you focus on services and outdoing your competitors, and also how the current trend of “revenge spending” will pass.
“If you’re completely transparent with your customer’s expectations, and let them know about these issues, it can still be a good customer experience”
At the core of Dijulius’ entire presentation was the idea that customer experience should be paramount; considered even more important than ROI, staffing, or other financials. In fact, of the recent staffing crisis and supply shortages, he shared an anecdote about his trip to a restaurant that was struggling with both areas, and yet remained open and communicative about how long it would take to serve him: “If you’re completely transparent with your customer’s expectations, and let them know about these issues, it can still be a good customer experience.”
But Dijulius’ talk wasn’t just built on anecdotes – he shared how 80 per cent of customers will go to a competitor after just one bad experience with your brand. Furthermore, 75 per cent of people don’t believe in advertising, but 90 per cent will trust an endorsement from a friend. To drive home this idea that advertising isn’t nearly as significant as word-of-mouth, Dijulius brought up the example of Tesla: a car manufacturer that has zero ad spend, and yet is one of the most valuable companies in the world.
The closing ideas presented by Dijulius summed up the current climate in the business landscape; one of interpersonal connections and relationship building. “Building an instant rapport with a stranger is one of the most valuable skills that you can have.”