Hanna Hasl-Kelchner:        [00:00:00] If you want to know how to become a thriving franchise superstar by improving franchise growth, you’re in the right place because my next guest literally wrote the book on the subject. He’s the author of The Wealthy Franchisee, and he’s here to share some ways for improving franchise growth to help you unlock more wealth and financial security for your family.

 

Announcer:        [00:00:23] [Music] This is Business Confidential Now with Hanna Hasl-Kelchner, helping you see business issues hiding in plain view that matter to your bottom line.

 

Hanna:              [00:00:34] Welcome to Business Confidential Now. I’m your host, Hanna Hasl-Kelchner, and today’s guest is Scott Greenberg.

 

Scott is a business and franchise speaker who understands firsthand what it takes to transform businesses from average to extraordinary. He’s been recognized as the franchise influencer, and as I mentioned at the top of the show, he’s the author of The Wealthy Franchisee: Game-Changing Steps to Becoming a Thriving Franchise Superstar.

 

So, yeah, in a nutshell, Scott provides those innovative business growth and leadership strategies that elevate your performance and your teams’. So I think we’re in for a real treat today.

 

Welcome to Business Confidential Now, Scott.

 

Scott Greenberg:     [00:01:17] Thank you so much for having me.

 

THE MINDSET NEEDED TO IMPROVE FRANCHISE GROWTH

 

Hanna:              [00:01:19] Scott, you know, one of the big advantages of someone buying a franchise is that it’s a proven business model. Some people would even say that it’s a business in a box, but business doesn’t run itself any more than buying a cake mix bakes itself, so let’s talk about mindset.

 

In your experience, what are some of the biggest adjustments that someone who’s buying their first franchise needs to make to get the ball rolling?

 

Scott:                [00:01:47] It’s an excellent question, and there’s a lot. I would say, first of all, an adjustment that people need to make is to be willing to unlearn things.

 

Most people enter the franchising world backwards. They step back from something else. Many people had a corporate job or just have been in some other setting and were ready for some kind of investment or some kind of transition and found themselves in a franchise opportunity, which is great.

 

The problem is, in order for people to succeed in franchising, they really need to follow the proven system. That’s the whole idea, is you’re buying into something that’s been field tested and if you – you know what? Over time, I’ve walked across a wide geography, and what I found from all these really great successful franchisees I’ve interviewed is that they really do stick to the system.

 

Many people who have a lot of experience in other types of businesses have a difficult time adapting to that. They try to outsmart the system. They believe they know something that the corporate office doesn’t, and occasionally that’s the case but very rarely, and you get into a franchise to mitigate risk.

 

What, you know, you’ve outsourced the innovation, the experimenting to the corporate office. Well, as soon as you deviate from what they recommend, you’re exposing yourself to the same risk you originally paid to mitigate. So one of the biggest things is the willingness to embrace the system and possibly unlearn things that might have worked in other environments but don’t work here.

 

Another shift to one’s mindset is if someone has had a job, especially a – a corporate job, that’s really great. But having a job, even a complicated, important, stressful job is very different from owning and running a business, including a small business.

 

I’ve had people tell me, “Well, I – you know, I had a corporate job where I had, you know, 400 people working under me.” Well, all four of those hundred people were career employees at a deep level investment. You can’t manage hourly workers, who maybe could stay with you for a year or two if you’re lucky, the same way you’d manage someone who’s, you know, in it for a career.

 

It’s just a very different environment, and you need to be willing to enter it with an open heart, with an open mind and a desire to learn and grow.

 

WHY MORE RESPECT FOR HOURLY WORKERS IS NECESSARY FOR IMPROVING FRANCHISE GROWTH

 

Hanna:              [00:03:52] You’ve covered a lot of things that I want to follow up on here, [Laughter] Scott. First, the career employee versus the hourly employee. What kind of awakenings does a franchise owner need to have to recognize the difference and manage them successful so that they can be his A team or her A team?

 

Scott:                [00:04:15] Well, a lot of times people use the term “hourly worker” pejoratively. And I – I think that we need to have a lot more respect, and I think we need to overcome the stereotypes that people have where we call them lazy, we call them morons.

 

We say that they’re entitled. I think that a lot of people simply don’t know how to manage a lot of hourly workers. Unless you are really bringing your A game to management, unless you’re really leading someone well, you really don’t know what they’re capable of, and I would say the same thing about the business itself.

 

Unless you’re really doing a great job running it, you’re in no position to judge the business itself. And so, hourly workers require a different level of motivation than, say, someone who is, you know, invested in a company. They had a career. They really want to climb up the corporate ladder as opposed to, you know, just make a living with an hourly wage.

 

And so, you need to be a lot more invested in them. You need to think beyond just directing their work and really focus on developing them into leaders. Really focusing on giving them a sense of growth, that really is what it takes to engage people and it’s a simple thing for me to mention, but it’s very involved, it’s very important.

 

But those franchisees who do are the ones who experience a lot more retention, fewer headaches, and ultimately better customer service because they have motivated, talented employees who are engaged in their work and who really care. That doesn’t happen quite as – well, I don’t want to say easily but it just requires more effort and a franchise space than it would in a traditional corporate setting.

 

Hanna:              [00:05:47] Could you give me an example of somebody who was successful in doing that? I mean, you’re – it’s kind of theory to talk about ‘this is what you need to do,’ but how do you do it?

 

Scott:                [00:05:59] Well, I can give you lots of examples. In every chapter of my book, I profile a different wealthy franchisee, someone who meets the criteria of being a wealthy franchisee. And one thing that they all had in common is they’re really good at managing their teams.

 

So there are people there who work in fast food, or in the industry, it’s called quick service. There are people who have home services, senior in-home care, all of whom really do a great job, not just with marketing and operations, but also with the customer experience and they really take time to develop their employees.

 

Across the board, these great franchisees, they don’t look at their employees as a burden. They look at them as an opportunity. And so, they take time to really grow them as opposed to just direct their work. So there’s a lot of people who are doing it.

 

In every franchise system, there are people who are doing it, and usually you notice it as a customer when you’re getting a great service experience.

 

Hanna:              [00:06:55] So what types of things do they do to grow them?

 

HOW TO HELP EMPLOYEES GROW VS MERELY DIRECTING THEIR WORK

 

Scott:                [00:06:59] So for one thing, they shift their mindset from, “I’m not just here to direct their work. I’m here to help them grow.”

So, for example, just a couple of weeks ago, I did a presentation for a franchise called Shine, and what they do is they do window cleaning and Christmas lights. And so, they have hourly workers. And I was talking to one of their top franchisees, and again, my name for those are wealthy franchisees.

 

And I asked the same question I ask all these people, “What do you do that enables you to succeed?” And very often these people can’t answer the question. They themselves don’t know what they’re doing well, and he just described the basic things, you know, “We work hard with a good territory,” and he perpetuated the myths.

 

But when I got a little bit deeper and I kept pushing him, he says, “Well, you know, I have a book club with all my employees where I buy them a book, an audio book, and they all read or listen to it, then we talk about it.” It’s like, “Whoa, whoa, wait a second. That’s not common. That’s not typical.” He’s the only franchisee in his system who’s doing it.

 

So that would be one example of really investing in employees. So you’re not just lying about their work, you’re thinking about their growth. So you ask them about what their goals are. You identify what is it they value when you’re hiring people to make sure that what they value aligns with the values of your work environment so that you know that they can grow and they can develop.

 

So it really means taking time to really see them as human beings, to see these people. It doesn’t mean just being nice to them, and it certainly doesn’t mean easy, shallow things like buying them pizza and giving them a compliment.

 

It means facilitating their growth, focusing on their mindset as much as their skill set, training them properly, giving them praise, and reinforcing everything that they’re doing right.

 

Hanna:              [00:08:35] That sounds like a great recipe for success.

 

IMPROVING FRANCHISE GROWTH AND THE IRONY OF CUSTOMER SERVICE

 

Scott:                [00:08:38] Well, you know, it’s just – there are two things that always surprise me in the business world, especially the franchise business world.

 

Number one, why customer service isn’t better. Marketing is mysterious, and it’s always changing, but we’re all consumers. We know what good customer service looks like and feels like, and the same is true for bad service. So you’d think people would know what to do to provide great customer service, but as we all know, that’s not always the case.

 

Well, most people who own franchise businesses at one time or another were an employee, and they’ve either had bosses they liked or didn’t like. They know the difference between someone who leads their work and who grows them.

 

Again, you would think that it would be more obvious, but I would say that most franchise business owners, for that matter, most professional people, are too busy being busy to think about the human element of their work. But what makes wealthy franchisees special is their mastery of these human elements, their own mindset and the cultures that they very purposely create.

 

Hanna:              [00:09:33] I think that same recipe is also transferable to any type of business, including the corporate environment. I mean, you may have career employees that are going to stick around. As one person said, “I’ve outlasted three CEOs. I’ll outlast this one too,” [Laughter] but that doesn’t mean that their motivation isn’t muted.

 

Scott:                [00:09:55] Not – you’re – you’re right. Not at all. You know, they might be willing to endure more.

 

Hanna:              [00:09:59] Right.

 

Scott:                [00:10:00] But that just means they’re willing to hang in there and be mediocre for a longer period of time compared to an hourly worker who, you know, is willing to bounce from one place to another. All the same rules apply in that kind of environment, and I’ve worked in those environments.

 

You know, you still need to invest in the employees’ growth, to recognize their humanity, and to create a climate that is healthy and engaging.

 

Hanna:              [00:10:23] Right. It’s just that the hourly worker, because it’s at the lower end of the pay scale as compared to maybe somebody with a corporate career who has more to lose from jumping around, will hang in there longer.

 

MIND TRAPS THAT KEEP YOU FROM IMPROVING FRANCHISE GROWTH

 

I’d like to come back, Scott, if it’s okay with you to what you said earlier about what a new franchisee needs to unlearn in getting into a business like this. And they get into it for a variety of reasons that you pointed out.

 

But what are some of the common things or mind blocks besides thinking they know better because of their vast experience that you have come across that they need to unlearn or at least hit the pause button?

 

Scott:                [00:11:07] They’re – I call them mind traps. There are a lot of very common typical mind traps that smart, hardworking franchise business owners fall into that prevents them from hitting that top level and becoming wealthy franchisees, and people don’t even realize it’s taking place.

 

In the beginning, they enter the franchise system with rose-colored glasses on. They’re excited. They have high expectations. And certainly, franchisor will probably help facilitate that, and they say, “You know, you’re not – you’re going to work for yourself but not by yourself, and we’re going to help your dreams come true.”

 

They say everything short of guaranteeing, you know, a specific amount of money. Legally, they can’t claim that, but they certainly put plenty of suggestions that the sky is the limit. And so, people start fantasizing, “I’m going to work for myself and be a business owner. I’m going to have this great team and serve my community, make all this money and be in control of my time.”

 

All these things are great, and they all might really happen. No one signs a franchise agreement saying, “Wow, I can’t wait to have an unreasonable customer put up a complaint on Yelp,” or “Wow, when my employees ghost and stop showing up, that’s going to be fantastic.”

 

No one thinks about those things going into it, but it’s a real part of running these businesses. And so, what happens is once the reality kicks in and you realize it’s harder than you thought and things didn’t work out quite as easy as you thought, that’s when the mind traps start to kick in.

 

And those might include things like catastrophizing. Things suddenly aren’t going so well, and you start to envision losing everything and how embarrassing it’s going to be and how tragic it’s going to be. We start to lose our mental clarity.

 

In the franchise world, it’s very common for there to be comparison. It’s part of the system. Usually, on a weekly basis, you’ll find out how your business did compared to everyone else in the system. And so, when you’re comparing yourself to other people, sometimes that’s useful if you can find out why someone did better and replicate their tactics. But, too often, we see someone else doing better, and we draw the wrong conclusions.

 

We make assumptions as to why they succeeded. And so, that steers us in the wrong direction or just makes us feel bad as comparison often does. That’s another common mind trap.

 

Some franchisees get complacent. They disengage from the business and say, “You know what, it’s doing good enough.” And the problem is when you take a step back, your employees suddenly notice that, and they start to disengage.

 

That happened to me. I was – you know, we had the number one store in California. We won some awards. I was able to kind of have it as a side business while I was still doing professional speaking as my main gig.

 

And then, one day, my field support representative called and said, “Hey, have you been to your stores lately? They’re looking a little dirty.” Like, “What? My stores, dirty? No way. My employees are too great for that.” But I showed up, and you know what? There was a rolled-up napkin on the floor in one of my Edible Arrangements stores. The light bulb was out in the walk-in cooler. I saw that there’s a voicemail that hadn’t been checked.

 

I dug a little bit deeper and realized our average ticket had gone down. There was a leak that was just slow enough that I didn’t noticed it till it was brought to my attention. So we really have to stay engaged in the business. So complacency is another one of those mind traps.

 

So I could go on and on, but there’s a lot of psychology, a lot of factors that the franchisees themselves bring to the business that have nothing to do with the proven system. But it’s what the franchisee brings to the system that can either really lift them up or really pull them down.

 

Hanna:              [00:14:25] I like that phrase “mind traps.” It’s so easy to fall into them.

 

UNDERSTANDING THE DYNAMICS OF FRANCHISE OWNERSHIP

 

Scott:                [00:14:30] It sure is. And, of course, not just in franchising, but there are some very specific dynamics that go on because it’s not just the business ownership. It’s also a partnership with the franchisor where in the beginning it’s like, “Hey, they’re going to be able to hold my hand.” And then, you get into it. You learn a little bit. It’s like, “Wait a second, now they’re putting restrictions on me. They’re requiring me to do things a certain way.

 

I have to partner with them. I have to collaborate with other franchisees, some of whom I may not agree with, some of whom aren’t representing the brand.” It’s a very specific kind of environment, and with that, comes certain psychology and certain social dynamics that are predictable. And so, if you don’t have the right mindset, the right social skills, you’re going to struggle.

 

THE SECRET SAUCE TO IMPROVING FRANCHISE GROWTH

 

Hanna:              [00:15:10] Interesting. So if you had to put in a nutshell how to improve franchise growth, what would you advise a franchisee?

 

Scott:                [00:15:20] Okay, so another great question. The answer that people expect is something rooted in operations. So people will meet wealthy franchisees, and they’ll say, “Tell me about your marketing, how you’re driving customers, how you’re controlling costs.”

 

I had a great team that won awards. My manager won Manager of the Year, the very first time Edible Arrangements ever awarded that. My team won Best Customer Service. So question I was often asked is, “Where do you find such great people?” You know, not how do you recognize them? Not how do you train them, not how do you keep them motivated, just how do you find them?

 

They want to do my fishing spot as if people are just great, you just have to find them. What I learned over the years is that what really enables wealthy franchisees to succeed on top of really solid operations, that’s just a prerequisite for success, they’re really good at managing the human elements of the business, specifically the way they think, the way they lead, and the way they serve.

 

So internally, they have that kind of right mindset. Then, they’re able to elevate the mindset of their team members, and then they use all of that to elevate their customers, not just providing products, services and solutions, but elevating their emotional state because customers remember less what they got and more how they felt. So our job, as much as it is to give them what they paid for, is also to make them feel good.

 

So, you know, I wrote this book. The book is, you know, 85,000 words, but if I had to sum it up with just three concepts that cover most of it, I would say wealthy franchisees are really good at keeping a clear head, so they can make good, clear, objective decisions; they stick to the proven system; and they use their business to improve the lives of everyone it touches, their employees, their customers, their community, as well as their franchisor and fellow franchisees and – and even vendors.

 

They recognize there’s a boomerang effect to the value they put out into the world. So those are the main things. They – they’re good at just controlling their thoughts and emotions with a clear head, they stick to the proven system, and they work hard to help everyone they come into contact with.

 

Hanna:              [00:17:18] So what I’m hearing is – especially on the employee front, is that there is a tremendous amount of respect for the employees. Would that be fair?

 

Scott:                [00:17:26] Yeah, absolutely. Respect and recognizing their humanity that this employee wasn’t born in this earth to scoop your ice cream cones and take money from your customers. This is a human being with thoughts and dreams and goals and fears, and we need to recognize that.

 

And just because you pay them a fair wage, it still doesn’t entitle you to exploit them. People want to be treated as people. We need to be professional and maintain boundaries. And if someone doesn’t meet our expectations and pull their weight, well, then there comes a point where you do what I call promoting them to customer [Laughter] where you let them go.

 

You know, I think those things are important, but there is respect that’s there, but it’s even more than that. It is a – you know, people don’t like to use the word “love” in a business environment but it’s truly a desire and a satisfaction that comes from elevating people.

 

When you can approach it with that mentality, that’s going to translate to hard dollars. Because when you have – love the people, you’re going to treat them better, they’re going to treat your customers better, and your customers will spend more money.

 

Hanna:              [00:18:29] Perfect. Thanks so much, Scott. Franchising is certainly one way entrepreneurs can achieve financial security for themselves and their families. And so, I appreciate all of your tips for improving franchise growth and helping them get to be more successful.

 

And I think a lot of what you said is transferable to any small business or entrepreneurial endeavor but perhaps more so with the franchisee model because you have these guidelines that you have to operate in. And, as you said, it does take some of the risk off the plate because you know it’s a proven model. You don’t have to guess about it.

 

So if you’d like to contact Scott and learn more about his work with improving franchise growth or about his book, “The Wealthy Franchisee: Game-Changing Steps to [Music] Becoming a Thriving Franchise Superstar,” you can find that information in the show notes at businessconfidentialradio.com.

 

And if you know someone who is a franchisee or is thinking about becoming one, tell them about Scott, share the link to this episode, and leave a positive review on your podcast app or at lovethepodcast.com/BusinessConfidential.

 

You’ve been listening to Business Confidential Now with Hanna Hasl-Kelchner, and I hope you have a great day and an even better tomorrow.