Encounters With Operational Excellence

I've just spent an interesting two days at the franchisee convention of one of our USA clients, Taco John's. This is a classic, privately owned franchise system that has been operating for over 40 years with many second and even third generation franchisees. And they’re still managing to achieve strong year on year sales growth.

Because I am fascinated by what successful people do, I made a point of catching up with three of their top operators who run 11 stores between them. Below are three attributes these people shared. I think you’ll find this useful.

A thirst for learning

Despite their success there was no complacency. In fact it was the opposite. One operator said she'd taken five pages of notes from my talk and had then spent a morning planning how she was going to apply these with her team.

The second operator said she constantly asks for feedback from her franchisor, business partners and staff on what can be done to improve the business. "I don’t see it as criticism" she said. "It's a way of getting honest information on how I can do better".

The third operator sought me out before the session to get some tips on how she could improve her public speaking ability as she was increasingly being asked to deliver talks to local community groups. Which brings us to the next shared attribute.

Giving opportunities to others

The focus of these people on giving opportunities to others was so strong you could call it a philosophy. One lady had left school to work as secretary for a multi-unit franchisee in this system. After 15 years of assisting him and learning from him she noticed he seemed to be running out of steam. Pulling him aside one day she suggested maybe he had run his race and needed to do something different! Instead of getting defensive, he agreed and she offered to buy him out if he would help her. They set up a deal and 12 years later she is going stronger than ever, having opened two more stores. She has also taken to heart this philosophy of giving opportunities to others and is constantly on the lookout for new talent to nurture and develop.

Another franchisee enabled her most loyal and talented managers to buy a 40% stake in some of her stores, and has been rewarded with record sales growth in these stores. By retaining knowledgeable, skilled and committed staff, these franchisees are investing in their own future as well as contributing to the health of the franchise system’s brand and culture.

Sharing data

Finally all three operators talked with enthusiasm about the importance of sharing key performance indicators with their teams. Two of them shared full P&Ls with their store managers and ensured all staff were equipped with up to date information on sales, cost of goods and how they were tracking against specific targets such as add on sales. "You've got to keep the team informed if you want them to take ownership of their performance" was the common message. Regular team meetings were also held where data was shared, fresh targets set and ideas explored on how breakthroughs could be achieved.

By the way, you may have noticed all three operators were women. This is a trend we are noticing in our work with franchisees, with women increasingly making their mark as top operators.

Operations Excellence Summit

Speaking of operational excellence, I have an exciting new initiative to announce – FRI’s Operations Excellence Summits! These informative and inspiring events will share research findings on excellence in franchising and deliver practical strategies to improve the operational performance of your network. Franchisor executives will be able to participate in one the Operations Excellence Summits in Brisbane, Sydney or Melbourne throughout June. We will keep you posted.

Until next time,

Greg Nathan

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