December 2013 Archives

Last month the Philadelphia Franchise Association (PFA) had a terrific meeting at Maggiano's in downtown Philadelphia.  I want to again thank our terrific panelist, Tom Monaghan, Steve Beagelman and Mr. Ade Lawal.  Each brought excellent stories and practical advice on how to recruit, hire and train key employees.

I believe the most insightful part of the presentation was the insistence by all the panelist that the hiring process must be exactly that, a process.  If a company can define what steps it needs to take and then follow those steps they will have a much better chance at being successful than those companies that wing it each time they have a need for a new team member.

Having a defined process will enable companies to refine and improve that process over time.  Key elements to a good process that we discussed were:

- Written and consistent interview questions

- Simple outside and objective tests such as background, IQ, personality test, etc. (I was intrigued to learn that some really helpful tests can be done for very little money)

- Hire for attitude, train for competence

- Hire slowly and fire quickly

The key of course is to actually implement what you have learned at a session like this and to be disciplined enough to be objective about your own systemic shortcomings.  The first step is to write down what you are doing, and then look at it objectively and write down what you ought to be doing. 

The final remark I heard after the meeting that really resonated with me is that a company is only as good as its people, no more and no less

Ray Kroc and the McDonald's executives from the 1960's -1980's are rightly praised for their brilliance in selecting McDonald's managers, franchisees and suppliers. 

But today, Kroc's vision about the importance of suppliers is overwhelmed with legal talk of franchisor's standards.

Franchise lawyers - who are not part of franchising business- misunderstand standards.  They confuse standards with uniformity & draft agreements purporting to demand uniformity.  

But the correct view is this: "McDonald's manages to mix conformity with creativity."
Kroc understood that the supplier community was not a source of rebates, but rather an active partner with the franchise system in bringing about rationalization and change to the supply chain for the betterment of the brand.
The best example of this is the "simple" french fry and Simplot Foods.
For those of a certain age, the magic of McDonald's was its French Fry.  Even the best home cooks could not match McDonald's.  And I know - my mother who is an excellent cook would allow my father to buy the family "chips" from McDonalds.
But in the early 60's, McDonald's had consistency problems, in part because the supply chain consisted of several hundred local suppliers, some who shipped potatoes of lower quality than the specified Russets.
Simplot convinced Kroc that moving to frozen fries would allow better consistency and control over their potato supply.
And, in 1960, the usual method of creating frozen french fries, blanching, freezing, and finish frying, produced fries that were not crisp or flavorful.
So, Simplot invested $3.5 million for an experimental process to produce frozen french fries - all on a Ray Kroc handshake with no guarantee of success.
Yet, Simplot took the risk, and was richly rewarded for the success.
So, If you want to be a franchise supplier or consultant, you have to have the ability find solutions to the problems that the franchise system faces and implement them.  On a handshake.

This week, the Hollywood Reporter posted this article about if, and how, the film studio Universal will handle completion of "Fast and Furious 7" in the wake of actor Paul Walker's death. Although a significant portion of the movie has already been filmed, apparently most of the action sequences still remain to be lensed.

Universal has indicated that it wants to move forward with the movie (after doing some rewrites to respectfully address Mr. Walker's death), but that decision may not be up to the studio.

According to the Hollywood Reporter, the destiny of "Fast 7" may actually be decided by . . . an insurance company?

It's common practice in the film industry to insure a movie's production against accidents. This includes insuring the lives and physical health of actors in key roles. Because of Mr. Walker's death, an insurance company may have final say in whether "Fast 7" goes forward because much of the financial risk, and cost of filming reshoots or rewrites, would be borne by the carrier.

The company will have to decide whether the cost of completing the movie (which would allow the carrier to recoup some of its money upon release) will be worth the investment versus shutting down production and writing off the cost of the insurance payment made to Universal. Speculation has it that the insurance carrier will opt to proceed with production on the film, but that decision still remains to be made.

Any fan of the films knows that the impact that Mr. Walker's death had on "Fast 7" cannot be understated. His character, Brian, was central to the "Fast and Furious" franchise. Mr. Walker's absence from future films will be felt by the film's fans, as he cannot easily be replaced.

Of course, many different businesses in a variety of industries rely on key people -- without whom the business would not function smoothly.

Indeed, sometimes a key person is so important to her or his company that the loss of that person would be devastating. The same is true of some franchise companies.

Some franchisors are heavily influenced by a small group of individuals, typically the business's founders. These people and their dynamic personalities are what drive the brand strength and have created the majority of the company's goodwill. If one of these key people is lost, it could have a severe, perhaps even ruinous, financial impact on the company.

This is the type of risk that "key person" insurance (sometimes called "key man" insurance) is designed to protect against. If you are a franchisor that is heavily dependent upon the continuation of one or more key individuals, you may want to talk to your insurer about obtaining this type of coverage.

My sympathy to the friends, family, and fans of Mr. Walker. I appreciate his contributions to an enormously entertaining film franchise.

Tales of awful customer service are especially bothersome at this time of year. It seems everyone has a story or two. The retail clerk who doesn't know or doesn't care.  The airline automated attendant system with endless loops before you encounter a human being.  The angry fast food attendant who is mad at the world. Or even part-timers who may not be very well trained. You get the idea. 

It's easy to feel that the employment playing field has changed. For many businesses it's harder than ever to find really good team members. Sometimes it seems staff get hired because they're breathing, and not because they have the requisite skill set to be excellent with the public they were hired to serve.  Knowing you can't change who that organization put in place to assist you, is there anything you as the customer are able to do?  

There sure are.  Here are some reminders to help you get the level of customer service you should receive: 

1. Don't be shocked or put-off by obviously poor great service. You'll make it worse. Be realistic. In some cases it helps to lower your expectations temporarily.  You may be dealing with a new hire that may have received very little training.  They could have no experience. But there's hope. Read on.  

2. Understand that you can actually influence the type of service you get. The same way an angry customer can have negative emotions mirrored back their way, entering a service situation with a positive and upbeat demeanor can help influence the treatment you'll get back. We use this approach a lot. We were in Las Vegas and walked up to a visibly upset hostess. Instead of being insulted, demanding, or giving her back cold treatment, we said "Oh good! We're getting a cheery hostess who's going to take very good care of us!" She took a deep breath and we were rewarded with a big smile and helpful service. She may have just had the customer from hell. But she wasn't going to take it out on us. We weren't going to allow it. 

3. Plan how to win them over. In a perfect world it should be up to them to win you over. But for now, especially in the holiday season, the tables are often turned. Have a strategy and be ready to explain your situation clearly and confidently.  You may need to exert some effort if you want a pleasant experience.  

4. Sometimes it takes a second effort. Realize that the last few interactions your service provider endured or experienced may have been brutal. Do what you can to establish a friendly atmosphere. Smile and be in a positive frame of mind. Take control of the situation. By the end of the transaction, you'll probably be having a far more positive relationship. Be obviously friendly and smiling. It is contagious.

5. Accept the occasional situation where nothing works. Don't take it personally. And try not to get frustrated. Don't YOU be the bad guy. That salesperson or employee will be abrasive to the customers that follow you as he was to the ones before you.  

Before you enter into the next situation where you're depending on someone to provide you with service, think about ways you're able to affect the outcome.  A customer definitely can influence the service they receive. Take more responsibility to radiate your own good mood and attitude and see if you're not treated better.

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Reprinted with permission of Telephone Doctor Customer Service Training. Nancy Friedman is a featured speaker at franchise, association & corporate meetings. She has appeared on OPRAH, Today Show, CNN, FOX News, Good Morning America, CBS This Morning & many others. For more information, call 314-291-1012 or visit

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