Joe Bourdow
President, CFE
Valpak
Direct Marketing Systems, Inc
Catherine Monson
President & CEO
FASTSIGNS International, Inc.
How To Assist Franchisees
Undergoing Financial Stress
• The economy is cyclical; this has occurred before
• Focus is key
• Motivation and inspiration: we all need it
*Franchisees’ enemies are busy-ness, distractions and denial
How to Assist Franchisees
Undergoing Financial Stress
Crafting the message to franchisees
*A multi-touch, multi-channel communications and
action plan
-one-on-one coaching
-group coaching (in the field, online or both)
-newsletters, intranet, all staff, all messaging and
communication
*Help franchisees create a focused, proactive plan to
implement; help them adjust the plan as needed
*Accountability is key
“What’s Important Now”
(WIN)
Manage cash and expenses; get financial house in order
• Step up (or at least maintain) marketing and outside sales
• Customer retention and customer development is critical
• Train and Develop staff
• Inform and involve staff
Manage Cash and Expenses;
get financial house in order
Create a short term cash budget
• Think big and think small in areas of cost control
• Keep in conversation with your banker
• Line up a back-up bank
• Focus on collecting receivables
• Eliminate poor (and average) performing staff;
look to upgrade
Step up (or at least maintain)
marketing and outside sales
Study after study shows
Companies that maintain their
advertising and marketing
emerge from a downturn ahead of
the competition
When competitors reduce their advertising and
marketing, by maintaining yours you get
increased exposure; your marketing message
has a better opportunity to get through
• Contact past clients
• Consider referral programs and
incentives
During tough times, it is even more critical to get new
leads and new customers
• What customers and prospects look for
during tough times may be different than in
good times; modify your offering as appropriate
• Consider money saving coupons,
promotions, etc.
Customer Retention and Customer Development is Critical
David Davoudpour
Chairman/CEO
Shoney’s
Steps a
Franchisor Can
Take When
Facing Financial
Woes
A Little Background
Perspective…My Journey
•
•
•
•
•
Serial Entrepreneur
Operator
Business Developer
Franchisee
Franchisor
Why Shoney’s?
•
•
•
•
•
•
Strong Brand Name
Rich History
Good “Bones”
Experience with Underdogs
Right Time/Right Place/Right Position
Bruised and bleeding, but not broken
Going the Distance
•
•
•
•
There is no substitute for hard work
There will be casualties along the way
When in the line of fire, stay focused on your goal
Know when to turn it up a notch
CSFs: Commitment Can
Make All the Difference
•
•
•
•
•
Get in 100%...99-1/2 just won’t do
Move quickly to do what is required
Make decisions based on the good of the System
Establish which relationships are vital and protect them
Promote bold goals for yourself and your franchise
System
• Run a lean corporate office
Takeaways
•
•
•
•
•
•
•
Determine what must be done and stay focused
Move quickly
Visit your business (or units?)
Make decisions
Accept key casualties
Be bold (but deliberate)
Run a lean operation and surround yourself with
winners
Harvey H.H. Homsey
Vice President
Franchise Systems,
Express Employment Professionals
Rolling Out New Campaigns
During Recessionary Times
To Roll or Not to Roll…
That is Your Question
Product/Service vs. Talk
What is Your Product/Service?
• Review your current product/service
• What do clients/prospects really looking for
during recessionary times?
• Needs vs. Wants
• The Client’s Needs vs. Your Wants
• Your offering in “good” times may be different
than what you offer in recessionary times
What Do Clients NOT Want?
• Put yourself in your clients/prospects shoes
• Funds and Budgets
• Do you want a gimmick or something you can
“really” use?
• Stuff vs. service
• What campaign would you want?
• Show me the “money”
The best campaign during recessionary
times may be the one you “don’t offer”
What Do We Offer In “Good Times”
• Your product/service
• What is it?
• What do you stand behind/guarantee?
• 100%
• What is your “support system”?
• Are you “there”?
• What is the competition?
Why Would “Service” Ever
Change?
• Who do you “buy from”?
• Clients do the same
• Who do you trust?
• Do your clients trust you?
• Are they loyal to you?
• Are they loyal to the solution you say you offer?
• What matters to you?
• Clients have the same needs
Don’t ever stop servicing!
It’s All About…
Selling and Servicing
• Basic, good ole, customer service
•
•
•
•
Be where you are needed
Be there always
Your competition will stop selling/servicing
You better not ever stop
• What matters to your clients?
Don’t ever stop selling or servicing!
What Do You Offer…
…In Recessionary Times?
• Selling
• Don’t stop
• Servicing
• Make it better!
• Being where you are needed
• Always!
• Your BEST product/service EVER
• YOU!
Know Before You Roll…
• Review your product/service
• Remember what clients “don’t” want
• Compare your “good” and “recessionary”
offerings
• Don’t change your service
• Don’t stop selling
The Best?
The best campaign to “roll” is
YOU
Doug Pendergast
EVP & Chief Franchise Officer
Church’s Chicken
Navigating Troubled
Waters:
Preparing for ‘tough
times’ everyday
Key priorities
•
•
•
•
Build formal & informal communications
Monitor key metrics
Establish expectations
Maintain discipline & urgency
Communications
•
•
•
•
Frequent dialog with key players (before a crisis)
Habit of open, frank discussion
Relative and absolute performance
Successes and failures
Metrics - margins
Houston DMA - Average Check Vs. Food Cost % Per Customer
44.0%
y = -0.0099x + 0.3949
Coefficient of Correlation = -30.7%
Food Cost % Per Customer
40.4%
36.8%
33.2%
29.6%
26.0%
$3.00
$4.50
$6.00
Average Check
$7.50
$9.00
Controllable Profit %
SCORE
Comp Sales %
SCORE
Complaints/1000
Contacts
SCORE
Customer Loyalty
SCORE
Certified Mgmt Count
SCORE
Assessment %
SCORE
Metrics - scorecard
1
623
Los Angeles
Preston
6.3%
0.50
18.2%
1.00
0.00
1.00
100.0%
1.00
2
0.30
90.0%
0.80
1
1523
Tyler
Dolen
7.8%
0.50
6.8%
1.00
0.00
1.00
91.1%
1.00
4
0.50
87.8%
0.60
1
3710
Shreveport
Dolen
3.4%
0.50
19.5%
1.00
0.17
1.00
91.0%
1.00
2
0.30
91.7%
0.80
1
4523
Greenwood/Grnvl
Dolen
4.1%
0.50
6.6%
1.00
0.27
0.80
92.7%
1.00
4
0.50
90.5%
0.80
5
371
Las Vegas
Preston
4.0%
0.50
13.0%
1.00
0.11
1.00
84.0%
0.60
2
0.30
95.4%
1.00
5
376
Tulsa
Gibson
1.6%
0.50
13.1%
1.00
0.15
1.00
86.4%
0.80
2
0.30
92.0%
0.80
5
381
Lake Charles
Dolen
7.6%
0.50
16.7%
1.00
0.10
1.00
86.5%
0.80
2
0.30
91.8%
0.80
5
1262
El Paso
Dolen
3.4%
0.50
15.9%
1.00
0.13
1.00
86.8%
0.80
2
0.30
94.5%
0.80
5
3011
El Paso
Dolen
1.8%
0.50
19.2%
1.00
0.12
1.00
86.1%
0.80
2
0.30
93.1%
0.80
1.00
82.2%
0.60
4
0.50
92.9%
0.80
RANK
Rest# DMA
RFD
5
4543
Atlanta
Fukartas
2.2%
0.50
11.0%
1.00
0.00
5
4598
Dallas
Gibson
1.8%
0.50
8.6%
1.00
0.17
1.00
90.7%
1.00
2
0.30
87.0%
0.60
5
7235
Phoenix
Preston
5.7%
0.50
18.4%
1.00
0.14
1.00
89.1%
0.80
2
0.30
90.0%
0.80
5
10167
Houston
Rodriguez
5.0%
0.50
13.8%
1.00
0.00
1.00
98.6%
1.00
2
0.30
89.4%
0.60
14
596
Shreveport
Dolen
4.4%
0.50
21.6%
1.00
0.11
1.00
82.5%
0.60
3
0.40
91.0%
0.80
15
714
Tyler
Dolen
5.6%
0.50
11.8%
1.00
0.09
1.00
86.4%
0.80
3
0.40
87.4%
0.60
15
916
Atlanta
Fukartas
2.8%
0.50
9.7%
1.00
0.00
1.00
88.4%
0.80
3
0.40
87.4%
0.60
15
1533
Tyler
Dolen
7.6%
0.50
11.4%
1.00
0.29
0.80
87.5%
0.80
3
0.40
91.4%
0.80
15
3443
Laurel/Hattiesburg
Dolen
2.4%
0.50
9.8%
1.00
0.14
1.00
85.2%
0.80
3
0.40
87.4%
0.60
0.80
0.20
1.00
100.0%
1.00
2
0.30
87.8%
0.60
19
592
Amarillo
Gibson
3.1%
0.50
4.9%
P13 YTD
Scorecard
4.60
4.60
4.60
4.60
4.40
4.40
4.40
4.40
4.40
4.40
4.40
4.40
4.40
4.30
4.30
4.30
4.30
4.30
4.20
0.50
4
5
6
5
15
0.00
24.5%
24.5%
0.60
-1.9%
0.20
0.41
0.10
23.88
0.50
1
1
1
1
3
0.00
25.6%
25.6%
0.60
-16.6%
0.20
0.67
0.10
23.70
0.50
-
-
6
-
6
0.00
15
N/A
0.20
-22.8%
0.20
0.85
0.10
70.51
0.25
-
-
21
-
21
0.67
2
N/A
0.20
-4.9%
0.20
0.50
0.10
15.13
0.75
-
1
4
-
5
0.21
39.0%
39.0%
1.00
-9.0%
0.20
0.76
0.10
39.15
0.25
-
1
2
-
3
0.00
19.0%
19.0%
0.60
-20.0%
0.20
0.51
0.10
80.54
0.25
-
-
4
2
4
0.42
0.25
-
-
1
1
1
0.83
-
Hubbard, Paul
1
Mohammed, Zohra
2
Reihani, Ford
Loretta Traynum
197
Tahir Masood
1
196
Blackstock, John
2
195
Patel, Anil
1
Sarwar, Ghulam
1
Mirakhori, Hassan
1
Green, Burton
1
Chukwudebe
1
190
Kirk, Larry
1
189
Jackson, Charles
1
8.2%
188
Kai, Karrie
3
26.1%
26.1%
0.60
-12.2%
0.20
186
Kim, Myong Ja
1
6.2%
6.2%
0.40
-18.3%
Singh, Sawinder
1
32.5%
22.6%
28.5%
0.80
-7.9%
185
Copeland, Al Jr./Duhon, Allen2
18.1%
184
Moosa, Rafiq & Irfan
3
37.4%
Richard Gomez
1
24.0%
Schmidt, Steve
1
200
200
199
198
194
193
192
191
186
182
182
28.5%
-9.7%
N/A
0.20
-22.6%
0.20
0.72
0.10
32.80
28.5%
0.80
-12.3%
0.20
0.65
0.10
14.81
0.75
N/A
0.20
-2.5%
0.20
0.47
0.10
9.06
1.00
-9.7%
0.20
-23.1%
0.20
0.20
0.50
19.45
0.75
-
1
0.10
16.06
0.75
-
1
0.50
29.36
0.25
-
-
0.10
190.78
0.25
-
-
-
-
0.69
0.10
58.23
0.25
1
-
-
-
1
1.11
0.20
0.14
0.50
15.66
0.75
1
-
-
2
0.42
0.20
0.41
0.10
16.48
0.75
1
1
-
2
0.42
0.10
33.31
0.25
-
2
2
-
4
0.42
0.25
-
2
1
-
3
0.83
N/A
6.7%
24.7%
16.0%
8.2%
18.1%
16.0%
0.20
0.40
0.40
0.60
-30.2%
-3.6%
-9.1%
16.2%
0.20
0.20
0.20
1.00
0.70
0.98
0.68
1
1
-
2
-
3
0.00
1
-
2
0.42
1
-
2
0.42
-
1
0.83
-
1
0.83
1
1
-
-
1.25
22.2%
0.60
2.3%
0.60
0.55
0.10
28.85
24.0%
0.60
-11.8%
0.20
0.39
0.10
28.66
0.25
-
-
-
-
-
1.25
N/A
0.20
-13.6%
0.20
0.17
0.50
39.35
0.25
-
-
-
-
-
1.25
Total Score
25.82
SCORE
SCORE
0.10
Total Scored
Defaults
DSO
0.38
P&L Default
SCORE
0.20
Payment Default
SCORE
-5.1%
15.9%
# of
Stores
Insurance Default
Comp Sales %
0.40
5
202
Franchise
Inspection Default
SCORE
15.9%
Panjwani, Kabir
Rank
Complaints/1000
Contacts
Controllable Profit %
Y-T-D
15.9%
C P % Qtr 1
C P % Qtr 2
Metrics – watch list
1.20
1.40
1.40
1.42
1.46
1.55
1.57
1.58
1.85
1.92
2.07
2.08
2.18
2.20
2.26
2.27
2.27
2.37
2.38
2.40
2.40
Establish expectations
• Create & follow issue resolution process
• Clear
• Consistent
• Transparent
• Set & explain boundaries
• Clarify hierarchy
• Manage investor expectations
Discipline & urgency
•
•
•
•
Don’t relax standards
Build balance sheets
Relentlessly improve unit FCF, ROIC
Hope for best, prepare for worst