Greetings Franchising Leaders
A lot has happened since our last Franchize Bulletin in February.
We do hope that this message finds you and your businesses well. We are certainly entering challenging times economically for many businesses. 2023 is shaping into a tough year. Just to let you know, we are here to help in whatever way we can. Feel free to call.
In this edition, we cover:
- Early franchising, with a quick visit to the oldest existing McDonald’s restaurant
- Insights from the 2023 International Franchise Association Convention
- Franchise Management Training, starting next week
- Franchisee Satisfaction Surveys
- Recent articles
- 12 Services for Established Franchisors
- Motorcycle News
The Oldest Existing McDonald’s Restaurant
In late February through early March, I travelled to the International Franchise Association (IFA) Convention in Las Vegas. While in transit to the IFA Convention in Las Vegas, I took a quick drive to see the oldest surviving McDonald’s restaurant in Downey, California. This restaurant is very interesting from many standpoints, including franchising challenges for Ray Kroc – as this franchised restaurant continued for some time under the control of the original McDonald brothers.
Established in 1953, the 10207 Lakewood Boulevard restaurant has a fascinating history and remains almost unchanged. According to some sources it was restaurant #3 and the second ‘franchise’ direct from the McDonald brothers. This was pre-Ray Kroc’s involvement and not initially part of Kroc’s company, McDonald’s Systems. Ray Kroc’s team had a far more comprehensive model than those original arrangements. And thus, this outlet would have been of annoyance and risk for them early on – as it didn’t portray the latest construction, signage and product elements (including the Big Mac).
McDonald’s Corporation (formally McDonald’s Systems) eventually purchased the restaurant in 1990. With poor trading (partly due to having opened a competing store nearby), their intention was to demolish the restaurant; however, localised activism and support resulted in an historic preservation order – meaning it had to be saved. Today, the restaurant continues to operate, and has a small museum adjacent containing a few little treasures – like old advertising posters, franchise and training manuals, and a Multimixer.
The restaurant is also unique in that it retains historic signage. The main separate sign is dramatic and can be seen from quite a distance in all directions. More importantly, it continues to portray the original font and also the ‘Speedee’ mascot. Speedee was, of course, superseded by Ronald McDonald. For signage, Speedee was replaced with the ‘Golden Arches.’
I’ve always had huge respect for McDonald’s, including the extraordinary operational focus, franchise model and values relating to franchisees. Behind the Arches (by John F Love) described the history and these points fabulously is still the best business book I’ve ever read. In turn, it was great to hear the current McDonald’s CEO & President Chris Kempczinksi speak at the IFA Convention.
The 2023 IFA Convention, Las Vegas
The IFA Convention was held across three days and had over 3,000 attendees. After nearly three years without international travel, I wanted a mainline to contemporary global franchising issues and trends. The IFA Convention provided the window into the perspective I wanted and who better to have headlined than the current McDonald’s CEO, Chris Kempczinksi.
Over the three days, I got to hear directly from many more CEOs and franchising leaders, and take in a number of concurrent panels and roundtable sessions on a variety of important and useful topics. Separately, I also attended the World Franchise Council meeting on behalf of FANZ – at the same location, where we also explored regulatory issues, employment challenges, and diversity in franchising.
With regard to the IFA Convention, major conference themes were:
- Franchising regulations and threats to the franchising business model
- Employees and franchising culture
- Franchise system change, including many drivers of change
I also attended many focused sessions on a range of topics including franchise performance groups, franchise advisory councils, franchise marketing and recruitment.
These are all areas that we can help with. If you are interested in more information about these sessions and/or what we can do, then please let me know.
But back to Chris Kempczinksi, CEO of McDonald’s his address was warm and calm. His message, however, was blisteringly direct. With regard to increasing proposed and actual regulations he noted (and I took great notes) “the reality is our business model is under attack,” and that “if you are not paying attention to these changes in regulations, you have your head in the sand.” He also asked the audience (but really the government) to think about a world in which franchising did not exist: “imagine if franchising went away. Jobs would evaporate. We would lose vital stability.” It was an important reminder of the impact of legislation – very real in the United States, Australia and other countries, but also some here in New Zealand too.
On employees, he talked of McDonald’s EVP or Employee Value Proposition – something we talked about as a top recommendation following our franchising sentiment research earlier in the year, asking “why would someone come to (work at) McDonald’s?” He noted how it could not just be the pay and benefits alone, it needed to be more personal, including how employees connect with their managers. That extended to managers understanding employee hopes and dreams and relevant issues and employees were aware of options and career development opportunities. But none of that was to suggest it would be easy for employees. Quoting Ray Kroc, Chris noted “if you are not green and growing then you are ripe and rotting.”
Finally, I have to note that one of the most interesting sessions at the convention involved Drew Brees – a famous American former football quarterback. Drew is 44 and had an incredible playing career, in which he not only achieved great success – but overcame significant injury and changes in clubs, finally settling in New Orleans. While that American Football story was interesting, his franchising career was more interesting. Drew established a greenfield multi-unit franchise empire with Jimmy John’s first, and now everbowl. And he is now a franchisor, with business partners, in a large scale bar and restaurant concept called Walk-On’s Sports Bistreaux.
I’ll be providing a more detailed perspective in the next issue of Franchise New Zealand magazine.
Franchise Management Training
We have our forthcoming training programmes for Field Managers, new franchisors and franchisor General Managers starting next week. It’s not too late to register.
- Franchise Field Visit Foundations – 3 & 4 May (1-5pm) – online
- Franchisee Business Planning – 10 & 11 May (1-5pm) – online
- Improving Franchisee Performance – 24 & 25 May (1-5pm) – online
We also have a two full day in-person Managing a Franchise System training programme, ideal for new franchisors and General Managers. This is held in-person at the Ramada Hotel in Newmarket, Auckland. The dates for the Managing a Franchise System course are 31 May & 1 June. Both days are full days, from 9am to 5pm.
Franchisee Satisfaction Surveys
Now is a good time to be thinking about an independent survey of your franchisee satisfaction, and have your results compared against Franchize Consultants’ Franchisee Satisfaction benchmark. This is good timing for a survey, given the forthcoming Westpac New Zealand Franchise Award entries, and also many franchise system conferences – often held mid to later in the year.
Regardless, franchisee satisfaction levels should be a franchisor key result area and are important because they relate to franchisee behaviour, tenure, recommendations and validation. The results should be discussed and shared with franchisees. Targeted improvements can, in turn, be made and reflected in future years. The outcomes could add substantially to your franchise system growth and results.
Contact us for more information on conducting a Franchisee Satisfaction Survey.
We have a couple of recent articles published. The latest was an article on New Zealand franchising opportunities and challenges. It was written from a governance perspective and appeared in the Institute of Directors Boardroom magazine. A copy of the article can be found here.
Franchising a Business
The second was an article on the importance of undertaking a comprehensive franchising strategy and feasibility study, when seriously considering and implementing franchising. The article appeared in the Franchise New Zealand magazine.
12 Services for Established Franchisors
In addition to our work with companies considering and implementing franchising a business, we also undertake considerable work for established franchisors. Like franchise training and satisfaction surveys mentioned above, we help established franchisors with a range of other types of help. For example, we can help:
- Comprehensively review your total franchise system, or targeted areas
- Upgrade and write franchisee, franchisor and training manuals
- Provide ongoing support and mentoring to you as a franchisor
- Educate and train your team on franchise system best practice
- Speak and engage with your franchisees at your next conference on a range of meaningful topics, including franchisee business growth, business planning, succession planning, growing profit, and management execution
- Provide financial benchmarking services for you and/or your franchisees
So much has happened here too, since the last February Bulletin. Most notably I took the opportunity to acclimatise upon landing in the United States with a solo 1,700 mile over 5 days.
It was a pretty epic ride, taking in as much ground, scenery and people as I practicably could. On day one was Las Vegas to Bullhead, via Death Valley, including Furnace Creek and Badwater. Day two took in a historic stretch of Route 66, including old towns of Oatman, Kingman and Seligman – before travelling onto Prescott via snow and freezing temperatures in Flagstaff, Sedona and a little mountain town called Jerome. Day three was an almost straight run down past Phoenix and Tucson to Tombstone and Bisbee, via a quick visit and photo stop in Naco, on the Mexican border.
Day four was cold and featured >80km cross winds. I took in some small southern Arizona towns before heading up to the Saguaro National Park (with huge cacti) outside Tucson then up to Lake Havasu. On the fifth and final day I travelled up to Boulder City and then drove around Lake Mead and back to Las Vegas via the Valley of Fire State Park.
As you can imagine, a trip like that involves a few stories. For one, I was extremely lucky to meet a very understanding State Trooper. I genuinely didn’t know why he’d stopped me and was curious to find out. You can imagine my concern when he went on to explain I’d almost doubled the speed limit.
All the best from myself and the team at Franchize Consultants.
PS: Never hesitate to call. We would love to hear from you.
How can we help you?
Contact us if you’re contemplating franchising a business or would like help with an established franchise network. We’d be very happy to sit down with you to understand your situation and objectives and explain the supporting services we provide.