Welcome to Franchise Talk with Emery Orosz, industry specialist in buying and selling franchises, presented by Morgan & Westfield, a nationwide leader in business sales and appraisals. Here’s your host, Emery Orosz with Morgan & Westfield President, Jacob Orosz.Emery:
Well, I wanted to welcome you both to Franchise Talk. We have on the line with us, Mark Liston, President of the Glass Doctor, and Mike Gai, he is the VP of – and what’s the rest of your position, Mike?Mike:
I’m the Vice President of Operations.
Emery: Vice President of Operations. Well, welcome to the show. And Mark, I know last time we spoke, it’s been a little while, but you mentioned “Fab 14.” And that’s what you wanted to talk about this time. So I’m going to let you go ahead and tell us all about Fab 14 and we, Jacob and I, may jump in with some questions.
Mark: My background and Mike’s background are very different. Obviously, Mike was one of the most successful Glass Doctor franchisees in the history of the brand, of over 50 years. So Mike came from the franchise world, and not from the Glass world, whatsoever. When I became President, I had no idea what the right thing was to focus on, let’s put it that way. The previous president had been on the glass business 20 years, and he knew the business well; and here I am, been in the business a year and a half, until I became president.
So one of the first things I did was I reached out to all of my corporate staff, and one of the other franchisees, and I said, “Let’s do this. On a scale of 1 to 10, if all of you separately would write down the ten best ways for a Glass Doctor franchisee to make money.” A couple of reasons I did that, I wanted to make sure that we thought the same thing, and I wanted to make sure that what we did, what we thought was the right thing for franchisees, especially new franchisees. Well, I got 21 different answers. That should mean that depending on where the franchisee was from, they got input from different folks.
If it was Jim down in Florida that would be one thing; the team from Connecticut, it would be different; Jay up in Minneapolis would be something else; Paul over in Illinois will be something else; Bradley down in Dallas sent me something else. So I took those 21 things and we handpicked 20 or 24 franchisees that have been around for at least five years, and who were going to be around at least five more years. And I asked them if they would join my dream team. I am from the Midwest, so a big basketball fan. This had been when Michael Jordan was on the dream team.
And so if I could get a dream team of franchisees, and the whole goal was to dominate the South. If I could see the ten commandments for becoming a Glass Doctor franchisee, and then we’d get to our convention, and we’d be like Moses coming off—these ten commandments of how we would be a successful franchisee. So I reached out to these 24 franchisees. And I took the list of 22 or 23 things that we had, alphabetized them, and put away the point values, and I told all of the dream team, “Well, here are some things we came up with. Here’s what we’d want to do, here’s what we don’t want to do. Don’t use what we don’t want to do.”
And of this dream team, they had over, almost 300 years’ experience as Glass Doctor franchisees. So I got this list in 10, 11, 12, 13 and 14, and they’re just a couple of points apart. And what I mean by points, we assigned 10 points for number one choice, for number two, number three all the way down the line; and for our tenth choice: one point. Then, we put this in aggregate, and we came up with what we call our “Fab 14.” And the Fab 14 then, is exactly what our franchise this day is, the best way of making money as a Glass Doctor franchisee. Then, I just started preaching. I started preaching to the franchisees, “This is what our franchisees came up with. This is what the most successful franchisees came up with. And this is what you should do.”
If I could see the ten commandments for becoming a Glass Doctor franchisee, and then we’d get to our convention, and we’d be like Moses coming off—these ten commandments of how we would be a successful franchisee.
Emery: In other words, this is the template for success, these 14 points, okay.
Mark: So that was the analysis. Our system has how many points?
Mike: We have a system analysis of 127 points that we go through and grade on them that we’re on to building. So these are the top four teams that were a hundred points. They’re all weighted differently. And I remember I’d put the franchisee - who’s no longer a franchisee, by the way – and up at Washington DC, and I go to their office, and I pull up the list and showed this to them. They said, “Well, we don’t like the written numbers. We don’t agree with number nine.” I said, “I don’t care. Not my problem. I didn’t make them. Don’t lose it all. But then, don’t call me ever and say, ‘We’re not making the money that we wanted,’ because here’s the list of the most successful people.” It’s upbeat a lot. And then bringing Mike in, as Vice President of Operations, after his great career in Seattle has made all the difference in the world, because he did this for seven years. And he grew the franchise like it’s never been grown before. So now, what I have in theory, Mike has in practicality, and it’s a great team.
Mike: And my role is to block and attack. As Vice President of Operations, we have the 14 items. So of those 127, the list goes zero down to 14. And how do we focus on and provide support and focus our programs so that we can get strong implementation of the things that need to get done. And my focus is to narrow it. And as Mark said, we narrowed our focus on these items, because we know these items will make a difference and lose the need for the franchisee. And my job is, okay, how do we get these things implemented? What tool can we put in play to help reinforce and support our operations executing these top 14 items?
Jacob: So that was current innovation and tinkering done. Is it done at the unit level or the corporate office? If they have these guidelines to follow, what are your comments at future innovation?
Mark: We have so many innovations right now that we’re working on besides these 14. These 14 – I’ll say it again, it’s like the Ten Commandments. When Moses got them, they haven’t changed. Number two is not number one, it’s still number one. So those were in place. And what it does is it allows Mike and me to work on a variety of other things. A good example, today, we are reshooting and redoing all of our initial training for new franchisees. When they become a franchisee, there’s about ten hours of training that they go through before they come here. We’re shooting that today. So we’ve got four or five different shoots here that will make them look like – I hate to say this – they’re shot five different days. And Mike’s working on a whole variety of things with our franchisee, because as a franchisee himself, Mike understands the need to have other franchisees. So Mike, I’ll let you comment on some of those things.
Mike: Yeah, you talk about innovation. These are real strong guidelines of things that really are not going to change; there are 14 items. But what we do is our innovation comes from the field. Now, we know our business model is more right than wrong, and it works when implemented. We do know that, but it is continuously evolving. How do we sustain product? Well, really, it comes from us at a corporate level really working closely with our franchisees through committees.
So we have committees, for example, for our technology, that help us keep pushing the envelope on what is needed to run these businesses and stay up on technology. We have committees on how we price to the customers in the field and make that real fluid and consistent. So we’ve got probably eight or ten different committees going on. And that’s where our innovation focus comes from. It really comes from peer group and committees that we manage from the corporate level that we’re becoming involved with.
Now, we know our business model is more right than wrong, and it works when implemented. We do know that, but it is continuously evolving.
Jacob: But, Mike, talk, if you would, to your groups that you work with, they’ve got four or five, what’s the best description for them?
Mike: I call them peer-to-peer performance groups. And so, we have every first and third Wednesday of the month. We’re up to six groups and it’s a group of franchisees that band together to make a decision if they really want to move their franchise forward, if they really want to change, and they want to hold each other accountable for implementing things that drive that change, that positive change, in their organization. So we call these our peer-to-peer performance groups. And our role is just to facilitate. It’s really run by a chairperson, it’s usually about six to eight people. They get in-depth into each other’s businesses. They share the numbers regularly. And I help them with key performance indicators.
My role is just to keep them, just to monitor it, and help support things that come up, but not driving. But a lot of our best ideas and things that are working it out, we can see real live action and real live results through these performances. So they’re implementing on a real-world basis. And we’re helping support that. It teaches us a lot, how it grades for them, but it really helps us. The biggest thing is that in franchising, someone in business doing the same thing you’re doing that you can relate to, and we really drop on that because there’s no motivation like a fellow franchisee pushing and motivating.
Emery: Mike, I’m sorry, I wanted to ask, is this by invitation only? Do you invite some of the more successful franchisees to participate? How does that work as far as the participation in these peer-to-peer group sessions?
Mike: Usually, someone says, “Hey, I’d like to join one of these groups.” And we get a few leaders to step up, for example. And then what happens is we’ll put word out and we’ve got a little pad, a little profile of the businesses, and we’ll help put them together. Sometimes they know that they want to work together. It’s one that we call our “A-Team.” And they’re formed because basically they all have pretty good relationships. So they decided to form it and do this.
We’ve got one called our “Future Council.” That happens to be a bunch of new franchisees, young ones that were really drafted and they saw themselves that in the future, the brand, and there’s like six or eight of them that said, “Hey, we want a group.” So, usually its bond with one or two people that say, “Hey, I want to be part of the group.” You look for someone to bond, and take the accountability and give them a chairperson. And then, we’ll help put that together based on the objectives that we’re trying to get out of the group.
Jacob: You’ve got your “young gun” ones too, don’t you?
Mike: Yeah. We’ve got our young guns, which we facilitate. And if you’re a franchisee that’s less than a year old, then you’re part of the “Young Gun Group,” basically by default.
Emery: By default, that’s what I was going to say.
Mike: Obviously, franchises that are in their first year, have unique challenges, and have unique experiences. And it’s our way of keeping everybody close; to be there for them, but also allow them the opportunity to share, and hear what they’re doing to basically build their business.
Mark: I’ve been in the franchise business for over 35 years, and I still source the different types of training. This is the best that I’ve seen. I really like where we’re headed. I like how we’re doing it. I like the guys leading it up. I like that we have good volunteers. But sharing it with one of our peer-to-peer groups as our franchisee, who remains the last, never misses a meeting,
So there is a franchisee that is over ten years now, who just renewed. So we’ve got people who all were large market, small market. The other thing that I like though is if someone does not participate and they just pick a part of the group, they’re out. They really have to participate. You just can’t say, “I’m part of this group, and not show up for meetings or anything like that.”
Mike: It’s the true commitment to each other, and like I said, some people find out that they, for whatever reason, won’t or can’t participate at that level. And what we do at that point is that we’ll open up and we’ll basically work with them to say, “Okay, this is not a good time for you.” And we’ll also have the spot in that group. And we’ll already have a robust profile for people who want to get into the group, and then we’ll help facilitate bringing in new members. I guess we’re trying to keep it at really about – six is a great number, no more than eight.
Franchises that are in their first year, have unique challenges, and have unique experiences. And it’s our way of keeping everybody close; to be there for them, but also allow them the opportunity to share, and hear what they’re doing to basically build their business.
Emery: Manageable group. I wanted to circle back, just for a minute, Mike, to something you said earlier, field visits. So are those field visits primarily designed to help the weaker franchisee or do you just pick at them random? How do these field visits work and what takes place on one of those field visits?
Mike: Well, we have two primary types of field visits, or I would say three. We have, what’s called our “sure start” field visit, which is someone that’s starting, we like to have a franchise consultant there within two weeks of opening, usually right after opening, because you don’t know what you don’t know. So when you’re working live, it’s something like it. So at that point, then we’d go out and they would work on just helping organize that franchisee, again, implementing the systems and making sure that they got a handle on things like office flow and how they’re inspecting work with their technicians and how they’re organized. So that would be a “sure start” visit. On other visits, we try to see a franchisee about every 18 months. That is our goal, 18 to 24 months or sooner for an area. And those visits will go a little bit different.
With those visits we’ll try and continue to communicate with them upfront what they want to get accomplished, what some of their paying points or opportunities are. And then, we’ll schedule and we’ll go out there usually for about two and a half day visits. And we look for them to really commit to that and take the time with our franchise system. And they will go through the system analysis just to get the baseline, usually out of that will come three or four action plans after the meeting. But they’ll also diagnose the financial performance, system and planning and stuff like that. So, the third one would be, if you have a franchisee that’s really struggling, and we think we need to come out there, we need to get out there to help make a difference and get them on track, that would be the third. So that would be an on-demand, kind of a need, or to seize an opportunity to help solve the problem that’s out there.
Mark: Because Mike and I – I wouldn’t soften in it – but it’s a great two years of my life. And at one point, I was a partner in a franchise. And I didn’t like to see the folks from corporate, and Mike didn’t necessarily see the folks from corporate, because when you’re running an operation, you’re busy. And with today’s technology, of being able to get on the phone, share computer screens for an hour, do quick meetings, I just don’t believe that those long trips are necessary like they used to be. We’re both aware of that. We just thought that 18 to 24 months, I think that’s more than enough; and for some people, maybe even too much.
Mike: Right, I totally agree on the franchisee. I want to know I have the support when I’m there. But I’m busy working. I want to stop and have someone come in for two days, two and a half days. And I better get something out of it, just dropping by to say “Hi” is really a waste of time. So that’s part of our objective, and we make sure that we respect the franchisee’s time also. We can really get something out of it, and they can get something out of it.
Mark: I used to say that I don’t need to deal with that daily.
That’s [field visit] part of our objective, and we make sure that we respect the franchisee’s time also. We can really get something out of it, and they can get something out of it.
Emery: Say that again, Mark?
Mark: I used to say I don’t need a free visit.
Mike: And frankly, our franchisees, like Mark said, with the technology and everything, they have more bandwidth to help their franchises that are assigned to them, if they’re not always out in the field. But it would make more of an impact for more people being at their home base. Again, so if they travel, we want them traveling with a purpose and a plan.
Jacob: I do think the number one problem with execution is because you can have the greatest strategy, but without proper execution, you’re not going to get it done. But are the problems consistent with executing 14 items?
Mark: It’s all over the board. It shocks me at times that somebody would spend money for a franchise. They get a way of doing business, a way that works, a way that’s been working for 50 years, and then not do it. It’s like saying you just bought this great 12-cylinder automobile, I’m going to take out ten off it. Why would I do that? Mike and I have talked about this a lot. I don’t know what it seems, but there seems to be a lack of urgency with people that don’t do well.
Mike: Yeah, our number one on our Fabulous 14 is phone in. So we can start with that. Because if you don’t have a phone and you’re not eager to service the customer and get the work, we see that problem a lot. And like what Mark said, where we feel and get a sense of urgency is we’re in the service business. Basically, when there’s a need, we’re an on-demand service. We need to be ready, eager and willing to service them. The problem was, and one of the biggest that we see, is people are too complacent. They need to recognize that they want to drive their businesses to the height that Glass Doctor can go.
They need to really take that seriously that, “Hey, we’re in the service business and we need to get out there. We need to say ‘yes’ to this job. We need to find a way to squeeze it in if we got a busy day. We need to take that job at the end of the day.” Those are some of the things that we see as huge opportunities. And usually, if you see a struggling franchise that had been missing that since the start, then we really need to hop into that and pull that in, so when they lack that mentality that, “Hey, I’m going to get this taken care of. I’m going to find a way. I’m going to say ‘yes,’ and this is what we do.” So that’s a big one.
Mark: I would say to anybody listening to this that chooses not to be Glass Doctor’s group, regardless of who you choose, there’s a system there. Embrace the system. Don’t question them.
Emery: Well, that’s true. Like you said, Mark, 50 years of success does not need to be tinkered with.
Jacob: In the selection process of potential candidates to be a franchisee, how do you gauge their ability to follow and execute a plan? Is that something that you look at?
Mark: I’ve been doing this…I’ve been awarding franchises since 1993. I have no clue.
Emery: And we appreciate your honesty.
Mark: This profile, all the other profiles are out there. I used to play softball, who was the kid in the bottom of the seventh, with the bases loaded, and you’re up by one run, lost the ground ball and hits it. I need to find that kid. And that’s the same way. I don’t know. I have no idea. These people, for sure, thought they were awesome. There are people for sure who thought they would succeed, failed. I just don’t know. We’ve been talking until we’re blue in the face. What do you think, Mike?
Mike: You know, it’s really hard, and that surprises me. It’s really hard to predict that. And it’s hard to predict how people are going to react. Franchisees make a huge commitment. There’s a lot on the line to being in a business, whether or not it fails and they’re running the business model. When the rubber meets the road and they operate, some surprises, I mean, they step up and they grow, and they really implement it, they really learn how to walk up the ladder towards success. And the other ones that you think are just going to be great, they just can’t seem to find those steps or those rungs on the ladder.
So I really don’t, I try not to. I try to make sure we look for certain traits, and we look to bring certain traits and set expectations with the franchisees. But if I was in the prediction game on who’s going to be successful and who’s not, it’s a hard one to predict. And I will say that when we talk about being in the system, it is an advantage to know the business from a technical standpoint, but it’s also a disadvantage. And it really depends. You've got to be prepared to say, “Okay, I know I’ve been in the glass business; am I willing to really learn and change my ways? Because our business model doesn’t rely on you being in the glass business. They rely on you running a service business in a certain way.”
Mark: My point on the glass business, there’s no back on glass whatsoever.
Mike: I knew it was a successful business model and I knew it would work. Actually, I had another group concept. My partner had been very successful and had grown over the year. The line became a Glass Doctor. I believed in the system because I believed in what I saw, and what happened to him. And it was an advantage that I did know glass. Because I was more concerned about executing the whole model than I was about being back there and putting in the windshield. And so, I think it was an advantage. But that only works for you when you can put a good team together. Because if I didn’t have some really good people, I could learn this up, to do the glass work, and then it would have been difficult. So we were able to get that combination going. They trusted me to run the business. I trusted them, and that was that.
When the rubber meets the road and they operate, they step up and they grow, and they really implement it, they really learn how to walk up the ladder towards success. And the other ones that you think are just going to be great, they just can’t seem to find those steps or those rungs on the ladder.
Jacob: How does this trickle down to the Fab 14? How does this trickle down to the employees for the franchisee? How many of those are applicable to where the franchisee needs to school their employees in the different principles?
Mark: I just tell everyone, I don’t think there’s anything that’s secret about any of them. I would say, here’s what the most successful people do, and we need to raise this, every one of them. I don’t think there’s anything at all that’s a secret.
Mike: Yeah, we believe in transparency. We believe in if you’re going to get to be successful, you need to build a team. Our force is to lead by example. And I would say that is really critical in that particular aspect. If you’re not real, and you’re not transparent and you’re not really into the learning and leading by that example, it’s hard to execute this field. It’s hard to really execute a successful business. So work hard on that and our fit-one business plan will all stay in a budget, so all of that, we want that visible to the associates and to the specialists, and to the office people.
Jacob: Is this helping in terms of execution? It comes not only from the top, but peer-to-peer as well, correct? I know we talked about some peer-to-peer assistance, but specifically with the Fab 14 can one franchisee pick up the phone and call another franchisee and say, “Hey, what do you do in terms of your business plan or another one of the principles?” So how does that come into play?
Mark: Yeah, I was up in Toronto a few weeks ago, a month ago. There’s a new franchisee, but who’s really an existing franchisee and just expanded into a new territory and had a new partner. Once a month, once every two months, it’s all the franchisees together working for hours, the two TA, they all work together. And they’re focused on one of the Fab 14 to fill this on. And they thought, “How are we doing on this?” So it’s the leadership of one person that’s driving this.
Some people drive the free hours on this meeting. And then, every meeting is somewhere else. So I start to see those practices all the way around. And you can look at the mirror for yourself, but it’s not hard to fool your fellow franchisee, and you see basically what you’re doing and what you’re not doing. And we just see people change because of those meetings. Now, those are much better because they want the change versus a couple of guys from corporate saying, “How come we don’t? We’re right first.” And one of the simple events, when they register…
Mike: Our previous example, peer group, for example, they came up and we came up with a system based on the Fab 14. And we’ll pull up a few things that we really want to focus on. And then, we’ll be accountable on what are they doing and if they’re there yet. And they take a lot of pride in pushing the envelope and trying to get the highest score. So there’s something to be said for franchisees that have that competitive nature, that really want to push each other, and try to help out in the group. But it’s very helpful to have these peer groups.
And it goes both ways, when you had a tough day or when you think you’re doing a good job, and you don’t think the next level is possible because you think you got it all figured out, what that does being part of a franchise is having exposure to other people, or whether it’s going to one of our conventions and reunions, and being the KGI, they show you what really is possible and had to re-energize, to go for that next level, because you know it’s doable.
If you’re on your own and you think you’re doing a good job, and you say, “Hey, I can’t hit this level of sales, and that’s impossible,” that would be an example. Well, if you go and you work with these groups, and you see people are doing it, now it becomes…
We believe in transparency. We believe in if you’re going to get to be successful, you need to build a team.
Mike: Now that they’re doing it, and now you know a lot of the challenging stuff that can’t be done. You know that it’s done, but how do you get there? And that’s a real important play in it, in any franchise. So it’s really important within our culture.
Mark: Here’s the thing. Mike is going to do something very interesting later this month. It’s a matter of ten franchisees…
Mike: Yeah, we have ten.
Mark: Ten, okay. Portland Glass is our sister company. It was started in 1947 in Portland, Maine. It’s a very, very successful company. When we bought them, they were part of the Harmon AutoGlass in 2004. But they’ve been around longer than we have been. They have been around since 1947. So we didn’t change their name, which was fine with us. Now, we work together our business practices. Mike is going up to Portland, Maine with ten franchisees who are all paying their own way, to Southern California, for a day and a half, to see best practices of what our sister franchise is doing up there. And they’ve got 44 stores in a population of 3 million people. And they just get all of this. So another great example of franchisees working together and because Portland Glass operates as a franchisee, they operate just like our franchisees.
Jacob: I think a lot of buyers don’t understand. They see a lot, there are some franchisors out there that will just award a franchise to anybody. They don’t care. But for franchisors that are concerned about their brand, why don’t you just award a franchise to anybody?
Mark: A couple of things, when you advance, we make mistakes. There’s no doubt about that. Now, we’ve said to people we don’t think you should buy this. We don’t think in terms of money, we don’t think there’ll be operating capabilities. No, no, no, I want this, I want this, I want this, and just really go back and forth on “Don’t do this.” Again, they convinced us that they’d do it, and their sales plunged. What else can I do besides warn them, tell them not to do it, all those different things. Sometimes, they do turn down those reasons. It’s a tough one. It seems like it would be so simple.
For new upcoming brands, I believe they get mesmerized by the dollars that they’ll make based on when they sell a franchise, more than $25,000 - $30,000, because they need those bills so desperately. What they don’t realize is it will take them in the backend because they won’t be able to validate, because the people that they spent $25,000 - $30,000 on a given brand, because it’s something magic, it’s something new, well, six months later or eight months later, two years later, they’re not happy. Then, you’ve got potential franchisees who call me and say, “Don’t do this.” So we are fortunate for what we’ve gone through over the years, it makes us very picky today. And I would say that our franchise team has done a very nice job of presenting those people to us that we think would enhance our brand.
Jacob: That’s a good point. We’ve seen franchisors that are dependent on the revenue from new franchise sales just to sustain their operations, sell new franchises just to stay in business. And I think that puts you in a really desperate situation. But looking at a franchisor’s financials and seeing that they’re profitable and that they are perfectly fine even if they don’t sell one new unit this year, I think that’s a good thing for buyers to do when they do their due diligence.
Mark: Yeah, it’s huge. It’s absolutely huge.
Mike: Yeah, we do rely on franchise development to bring up a good candidate. And we work with them. But from an operation stance, my interest is in how we maximize each market that has been purchased. Remember, we’re selling on an exclusive basis in this particular franchise. So we need that franchisee to do the right things and to grow. That’s a commitment that we’ve got together, that we expect them to grow and do the right things, and build value for themselves, for their organization, and so I tell a franchisee, and from an operational perspective, that’s what I look at.
We ask ourselves, how is our system moving forward, and trying to basically grow, from my perspective, new franchisee sales are just icing on the cake. And we take them and we try to grow them. I’m more concerned about how we take our current franchisee and make them as strong as possible. We look at things like per capita, sales and so forth. And you can know which people have a lot of opportunity to grow and which ones are getting out there and which ones have a nice market penetration.
Mark: Well, I think the thing is, that we’re a little bit unusual, because I’ve said to people, “You’re buying too much territory.” You don’t need to buy this territory. Buy what you can handle, and then operate it well. It’s not a bad thing, but it is a small sea. The size of the territory does not necessarily mean at all in one’s success.
We need that franchisee to do the right things and to grow. That’s a commitment that we’ve got together, that we expect them to grow and do the right things, and build value for themselves, for their organization.
Jacob: Why do some franchisees end up selling? That’s obviously the role that we play here. But what are some of the different reasons and how does that fit into your business plan? I know as a franchisor, that’s just the natural part of the evolution of a franchise. Some might not be a good fit for it. And it’s a way for you to provide value for your company to get a new operator in there. But what are some of your comments in terms of the overturn or the turnover?
Mike: I would say, the one you’re after is the one that you can build up, build value for them, for the organization, and it’s part of the plan. In my particular case, I had many within a five to seven year period that I wanted to look to, but to sell it, and then decide what I was going to do next. So that would be one thing, someone that comes in and says, “I want to run this for a few years’ time and I want to build myself an exit strategy.” You may have employees that you want to sell to, associates. You may have family members that you want to do a legacy business for, one that you could pass on.
And then you go to the other strategy – and that’s what you want. You want people to sell, they don’t have to sell it. It’s a choice, so you could operate your business. Then, you go to the other side of the equation, you get people that incur a stipulation, it makes sense for them to sell because they just can’t figure it out, or they don’t have the entrepreneur personality. It’s more like a hobby than it is a real business. And we’ll tell them basically if you’re not willing to do these things, then you just don’t have it. Then really, you should sell. It’s good for them, it’s good for the brand. And we’ll help them either way.
Mark: I’m looking at it as some people, because of retirement. They want to retire. Some people, because they thought their kids would eventually be in the business, and their kids are doing something else and don’t want to be in that business. As Mike said, some people don’t want to work as hard, and think they shouldn’t be in the business. And to franchise, this business is work. There’s going to be work. That’s how it is in life. I think the other thing is that they’ve been in it for a year, and now they just don’t like it. They thought it would be very different than what they wanted.
And that’s not failure; it’s like buying a house in a neighborhood. Some neighborhoods, you move into, and a couple would say, “I want to move out of this neighborhood.” Now, does that mean you chose the wrong neighborhood? No, not at all. It is important to put such things in your house so you can sell it for more money? Absolutely. It’s the same as selling a franchise, your own franchise. When you buy a franchise, buy it to someday sell it. You’re not going to just keep it forever. As you do that, operate that so that you can sell it someday. That was one thing Mike did. Every year, the business is not for sale, but he had to boost it in such an order that you could sell it. And when time went, seven years later, he was ready.
Mike: I try creating a franchisee, but if you’re running with the focus on how are you building value and making your franchise sellable, again you can run it for the long term and still accomplish that without cutting corners. But if you’re doing that, basically you’re creating good business, because you’re creating this profitability and so forth to just create good infrastructure. So it’s one and the same. You have to do the same thing regardless of whether you actually pull the trigger and decide to sell it, or where you continue to offer it.
Some people, I will say, later we find out, that people sometimes get the effort with, “Hey, I want to be in business. I want to work for myself.” But they don’t really realize just how much work they’re signing up for, like by afar. And you’ve got to cultivate that. You’ve got to basically work like crazy to get it into a certain point, so to start reaping the rewards. But those first two years, I don’t care how good you are. I don’t care where you come from, it’s just a lot of work. And what will happen is if you do that relatively right, those years, three, four and five, it really starts coming together for you, and then you start reaping the rewards.
In my case, my years, five, six and seven, I never had it so good, but, boy, those first couple of years you’re working, six-seven days a week. You’re doing what it takes. And I just think people are shocked to death, and they had to think now that they work for themselves, they can come and go, and it’s not going to be that much work. And that’s a big fallacy. You might be able to do that in another way, but to really get there and get it set up right, you’re signing up for two years of hard labor, and then three years, it really starts to evolve and sets you up for long-term business and the lifestyle that you are looking for.
I would say, the one you’re after is the one that you can build up, build value for them, for the organization, and it’s part of the plan. When you buy a franchise, buy it to someday sell it. You’re not going to just keep it forever.
Jacob: What is a healthy turnover for a franchisor? Is it 5% of the units per year? What do you think is good?
Mark: I don’t know. I don’t know if there’s a real number. I hear people talk this way or the other. I think they need to look at it…
Jacob: Is there potentially a problem with that business?
Mark: For me, what is much more important, I work at item 19, and then start to move on to different franchisees. And I wonder if people say that much.
Jacob: If you are evaluating a franchise, if your brother’s buying a franchise or your friend, what would you say? “Hey, here are the three things you need to do?” You said lawsuits, but what else would you look at?
Mark: I’ll start calling people. I would validate, validate, validate. Understand that the franchisor can’t say a whole lot to you because of SEC regulations. And I would keep calling people until I find someone that is not happy with that franchise, and then I’d call somebody that was extremely happy. And I’d say, “Hey, I just thought of somebody who doesn’t like the franchise for this or for the other.” They might guess who the person is. They might come back to say they’ll open a meeting, they have no problem with anything. They argue if today is Tuesday or not. So I think those are the different things, and also with item 19, of course, it gives you the opportunity to look at who’s the best?
Jacob: Well, some franchisors don’t have an item 19. What are your comments on that?
Mark: That’s a lot of talk.
Emery: Where is it and why?
Mark: I think it’s a lot. I’ve been working with franchising a long time, like I said. I work with item 19. It’s part of the franchisee. As to why, as to what they’re doing and how they’re doing, what they’re doing, as to the system itself, these franchisees can and will tell you anything, they’re a great brotherhood of people. And I try and find the people that are in the top 10 somehow, I thought there’s a couple of those.
Mark: What do you say, Mike?
Mike: Yeah, I just don’t think these things require people that are in the business. And I would be after, usually a lot or third of the franchisees that are probably healthy and moving, and that are really growing, and then you’d have a third. That depends on what year, what day of release, or whatever. And then you have the bottom thirds. And then just then congregates and maybe it’s somewhat disenchanting. I’m not saying that our numbers, but I just think in general, you’re looking for a little bit of that, and then you have similar questions, and then suddenly it becomes pretty clear, what you’re up against, what the issues are. And I just think there’s nothing like those conversations, because whether you want to hear it or not, you pick up the phone and you call.
Mark: One point that I feel I should make, in the life of the franchisee; you don’t really care what happens and what might go. You had a business to run, what it would provide to his was like you can take those—but his success and his failure has nothing to do with what we’re doing in corporate or not doing in corporate. And if you’re talking with some franchisees, and see corporate hasn’t done this, and corporate has done this, that’s what they’re doing.
Mike: Yeah, coming to this side, some of the franchisees that feel or say, “Hey, we need this, we need that. Why have you done this, why have you done that?” I don’t know why they give so much thought to having run all of these businesses. You got to look at it yourself and say there’s a whole business model. There are a lot of things in that model. I don’t know if they have much time to look for more subsidies. You’ve got to be careful and not go too fast. And so, you’ll find that most of our successful franchisees, they stay engaged, and they stay involved.
But they’re not demanding because they know they have so much to do. Like we said, we have 127 things to implement. Show me a franchisee that doesn’t have plenty of those things on that list that they did better at. And they have so much time to talk about all of the things that maybe they want or that they are not doing. It’s very easy to turn back and say, “Okay, what are you doing in your own operations?” And I think the people that keep their heads in their own operations and give us good advice are steering to the right channel. That’s welcomed. But you’ll find that those people end up being happier in the franchise and a whole lot more successful.
One point that I feel I should make, in the life of the franchisee; you don’t really care what happens and what might go.
Jacob: Mike, what was your biggest misconception about the franchisor and the corporate office? Going from the franchisee to the corporate office, what was - once you started that role, wow, I never knew this - what was the biggest thing that really hit home or the thing that you learned during that transition?
Mike: A couple of things, number one is what really surprised me, how many people bought the franchise and used this cafeteria plan and carried what they wanted, and didn’t run it as a franchise, it’s a missed opportunity there. So number 1 is knowing that when I went in, and I bought this business model, I bought the franchise. I was just trying to maximize it. So it really surprised me when I got to the other side and I found many people that basically, like Mark said, keep pieces that they like and try to marry it with other things that they want to do their way, and that was a surprise.
Secondly, how hard and how much work is involved at the corporate office, how hard the people at the corporate office work, and how many things they deal with. For example, I was pretty self-reliant. I didn’t think my franchise could focus, added a whole lot of value at the time. Now, I have a 180 degree different attitude of how important they are to our system, and just how much work they did, for the franchisor and to support the franchisee. So there’s a whole lot more work than I expected it to be. And I don’t think that as a franchisee, sometimes you realize just how much this involves on running the support of a franchise. And really, how many people in this particular instance with this franchise, with this franchisor, just how much they truly do care about striving, about the brand and about the people involved.
Jacob: What would you do differently now that you’ve been at the corporate office? If you were to go back as a franchisee, would you do anything differently?
Mike: Yeah. I would, number one, would I do it again? Yes, I would have no issue with it. Again, I think this is a great business model and franchising in general, if you’re doing a good one, is great. I would definitely move quicker through – our number one thing at our Fabulous 14 is phone handling. I think I was really strong at this, blocking exactly in operations. I would assess that and get my hands around that, and stay a lot closer to that more so than I did in the past. So I would basically, a lot of our franchisees say, “Hey, we need to phone in and we’re not busy. And there’s not enough work out there.” And I’ll tell you what, when you get closer to what’s happening when the phones are ringing, that’s not the case.
I grew, I really wasn’t even in that situation, but even my operation, it felt like it was going down and everything. All I had to do was get closer to it, watched what I was doing on the phone through our dispatching, to realize we had a lot of work, we just weren’t maybe doing everything we could to make it really work, getting the job done and getting the job sold. Because in this business, people have a need, and they call you because they have a need. And we just want to keep doing that well. So paying closer to that upfront and making sure that we’re starting with that number, one item, I would do that a little bit different. The rest, I think, we had a pretty good formula. We’re pretty good at.
In this business, people have a need, and they call you because they have a need. And we just want to keep doing that well.
Emery: And just going back to your analogy about farming, the phone calls, you have to cultivate them. You got to work them.
Mike: And given, in sections where people have enough time to properly assist the customer and work with the customer, there’s a lot of times that if I went back, I would close out all the difference and wrestle people through to keep that phone ringing, I would use tools that we have, like rollovers to call centers and stuff like that. I would be a lot more dynamic with that. So when a customer calls, we spend the proper time with them and won’t do the rush that maybe we were in the past.
Emery: Well, Jacob, or gentlemen, Mark, first, I’d like to start to wrap things up a little bit. But, Mark, any closing comments you’d like to make as far as why Glass Doctor is not only the right opportunity, but as far as timing is concerned, why is now the best time to get involved with Glass Doctor?
Mark: Yeah, in 35 years, I’ve never seen something like this go through. I think by far, this is the finest franchise organization. I do not want to move away from Florida. I really like Florida. When people ask me today, I really like Florida. But to finish our career, so my wife is also president of one of the brands. We’re still involved. We believe in this company. We believe in what we’re doing, we believe on the ethics, we believe in our core values. That’s number one. Number two is why do customers come to Glass Doctor? For two reasons, the Fab 14 and my gang. You got it. You got exactly what you need from a guideline of how to be most successful. It’s not a bunch of people sitting on a table at corporate, saying, “What do you think is the most important?” This is done by people that have had 300 years’ experience of saying, what is the most important. That’s the Fab 14.
And then after that, you’ve got your Vice President of Operations, those are the key persons at the present, the VP of Operations is absolutely the key person, because they work with everybody in the field. They work with the franchise consultants. They’re the ones who do this. They’re the business’s strength. When you got somebody who has done, who’s done very successfully, who understands it, and who even calls and has planning to do, because you don’t understand it, yes I can.
Let’s talk about how are you after x number of years? I’ll see where I was at after x number of years. What are you doing? I’ll say what we did, and they’ll probably give us the world. There’s no guesswork about what and how to do this. My last vice president quit, became a Glass Doctor franchisee, and if he didn’t believe in the brand, he didn’t believe in the company. He certainly wouldn’t leave corporate to carry the risk of being a franchisee. That’s basically what happened.
We believe in this company. We believe in what we’re doing, we believe on the ethics, we believe in our core values. This is done by people that have had 300 years’ experience of saying, what is the most important. That’s the Fab 14.
Emery: Sure. And I appreciate those comments, Mark. And what about you, Mike, I’m sorry, any closing thoughts for us to consider?
Mike: I would start by echoing what Mark said. First, you have to believe in your franchisor and you have to believe that the model is more right than wrong, and go find it. And being born and raised in Seattle and moving here, I’ve been here two years and I’m trying to understand it, a lot of the new talent, and I was an entrepreneur. I wanted to see some of the inside to grow. It’s now going on five years. It’s no small thing to do that and with a family and everything. And that would not have happened without a) good experience as a franchisee, and b) behind the scenes to be really part of it, and there’s a leadership in this particular group. So number 1, you have to feel good and believe in your franchisor, that they’re there for the right reasons. Number 2, you have to believe in the business model. So those are really critical to us.
And another thing is that at Glass Doctor, one of the most exciting things about where we’re going is there’s a very unique way of being a full service glass company with a large footprint. There’s nobody like us out there. And we are diversified, and we probably did it because we have 50% in the commercial property and residential property, we have 50% on it. So it ends up being a little tough for getting it together, because we do a lot of things. But when you do put that all together, we’ve got a real robust, diversified model. And that’s pretty exciting. When I came in ten years ago or 12 years ago and started Glass Doctor, it was 80% automotive and 20% commercial and residential property. I think today we’re very excited about growing talent, because we could sell our products and have the capability to sell our products in any market opportunity, no matter what size of the market it is coming from.
You have to believe in your franchisor and you have to believe that the model is more right than wrong, and go find it.
Emery: All right. Well, thanks, Mike for those thoughts. And, Jacob, any closing thoughts/comments you’d like to make?
Jacob: I’ve got about a hundred more questions; we’ll save those for some more conversations. Great conversation, it’s very interesting to hear the different vantage points.
Mark: Yeah, definitely with Mike on this call, it’s very different with both vantage points, isn’t it?
Emery: Absolutely it is, Mark.
Mike: What’s exciting here is that Mark and I, we play out each other’s strength and we help each other in the business. We’re so different. We’re the same as far as we believe in this company and as far as the ethics and everything. But we’re so different from our backgrounds and experience. And I think that’s an exciting combination for Glass Doctor and for us.
Jacob: I think that’s what makes a franchise; it’s the collaboration and teamwork.
Mark: Right. I agree Jacob.
The biggest thing is that in franchising, someone is business doing the same thing you’re doing that you can relate to, and we really drop on that because there’s no motivation like a fellow franchisee pushing and motivating.
Jacob: That’s the essence of it.
Emery: So yeah, just for my perspective, one of the more educational conversations that I’ve had with a franchisor and a VP of Operations, the President of the company. So I appreciate your time. As Jacob said, we probably could go on for another hour, so we’ll save that for next time. And would you guys both be up for another conversation down the road?
Mark: You know where to find us. And we don’t have anything to say at all.
Emery: That’s good. Well, thank you again gentlemen for joining us on Franchise Talk and we’ll talk soon.
You’ve been listening to Franchise Talk with Emery Orosz, Morgan & Westfield’s expert in buying and selling franchises. If you’d like more information about selling or buying a business franchise, call Emery at Morgan & Westfield at (928)793–3000, or send him an e-mail at firstname.lastname@example.org.
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If you would like additional information on Glass Doctor, please call Emery Orosz at 928-793-3000.