I’ve been attending franchising events for the past 10 years. I’ve been lucky to have traveled all over the world speaking and listening to some of the most successful people in the industry. Last week, I was able to attend the Franchise UnConference right here in my own back yard. Not only was it great to see all these professionals come to my home state, it was easily one of the best conferences I’ve ever attended. Below are a couple of tidbits from the two amazing presenters and my thoughts around them.
The first morning we heard from Mike Rotondo, CEO of Tropical Smoothie Café. I was excited to listen to what Mike had to say because I’ve been a fan of Tropical Smoothie Café for a while and have watched how fast and smart they’ve grown. Mike stressed the importance of having a clearly defined set of values and mission for your brand and making sure that it is communicated from the top down to every employee in the company. “If you called your customer service line today, would the person answering the phone be able to talk about your values and mission?” I realized that I’ve done a pretty poor job of identifying and communicating my mission with my team and my clients. It caused some serious reflection on my part about what I’m really trying to accomplish and how I want to get where I want to go. (I’ll have more on that in a future post.)
Another great piece from Mike’s presentation involved making changes in a brand. The time to make changes is when things are going well. Anyone who has ever been involved in a franchise system that has rolled out a change, regardless of how large or small that change is, has found that it’s typically met by the franchisees on a scale of “Cool” to “Holy Shit my world is crashing down around me!” I’ve personally seen the benefits of brands that make changes, even big changes, when things are going well. Trust me, (and I guess trust Mike) it’s much easier to do anything when times are good.
The second morning we heard from David Barr. I had met David in passing a couple times, (just because that’s how the franchise world works) but I’d never been able to talk with him. I loved what he had to say. And truth be told, David is one of my new business idols. I aspire to have a career like his. Close to the beginning of his presentation, David said something obvious, but it sent my mind racing and it took me about 10 minutes before I had my ADD under control to start listening again. David said, “Companies aren’t sold, they’re bought.” David could have walked over and smacked me a across the face and he would have had a slightly smaller effect. I’ve been involved in several transactions over my career. Some have been very large and some have been pretty small, but in every case, it has always been presented as “We are selling the company.” There have been instances where the deal has happened and there have been times when it hasn’t. There have been times when I’ve thought, “Man these guys are getting a great deal.” And there have been times when I’ve thought, “Is anyone really believing this bullshit?” I’ve made it a goal to never use the “sell this company” terminology again. I will never “sell” another company. I’ll just find buyers!
David also spoke on goals of a brand and tied it into a plan of working to create value. It reminded me of a meeting I had a few weeks ago with a potential client. These guys have a great brand and I had been pursuing them for a while. When I finally got a meeting, I flew out to meet with the partner group. We toured their existing locations and talked about growth strategy. I was getting excited because I know my team could sell about 200 of these over the next couple years. However, as the day went on, I saw how disjointed the plan of the partnership group was. By the end of the day I wasn’t sure if they wanted to sell a thousand units, or close up shop. I told them I had some concerns about working with them because I didn’t understand what their plan was and it was apparent to me that they all had differing views of what should happen with the company. One of the partners looked at me very bothered and said, “What do you mean? We know what the plan is. We want to sell this thing for $50 million!” I started laughing and told them, “That’s not a plan! That might be a goal, but you have no plan on how to get there.” He then said, “Well why don’t you just find someone to buy this thing from us now for $10 million?” To which I replied, “Who the hell is going to buy this for $10 million!” (That was the edited version of what I said.) Needless to say, we didn’t get a deal worked out.
This is a problem that I’m seeing more and more. It is fine to start a company with an exit plan in mind. It’s even ok to have fantasies about selling that company for tens of millions of dollars. (I actually think about buying the Utah Jazz fifty times a day) But remember, “Companies aren’t sold, they’re bought!” (I wonder if that would look weird as a neck tattoo?) Thanks David!