The Value of Attention to Detail in Fast-Food Franchising
First, this franchisee’s food costs as a percentage of total costs were really low, based on averages for his type of restaurant. When I remarked on that fact, he was so proud to tell me, “Hey Nate, you come out here for a visit and we’ll go into my store, and I’ll show you how to cut a tomato. And it will save you $1,500 a year per store!” At that moment, I understood the level of attention to detail, patience, and consistency of execution required to be a successful fast-food franchisee.
Not only did this owner have to look at the tomato and figure out how to cut it up to get the most out of it, but he had to teach all the people who managed and worked at all 50 of his stores how to cut the tomato, then he had to follow up and make sure they were all cutting the tomato right. Then he had to do the same thing with the onions, and the ketchup packets that were going out the door … you get the picture. In this franchisee’s case, the level of precision was unbelievable. I have never seen better margins.
At that moment, I realized I would be a terrible restaurant franchisee. Whenever people ask me why I don’t become a franchisee myself, I reply, “Because I won’t put the necessary level of care into how to cut the tomato.”
The Importance of Partnerships
Of course, different franchisees bring other strengths to the challenge. Another skill is the ability to form good partnerships. Successful franchisees are able to separate key business functions and decide, Hey, I’m going to be the one who grows the business, and you’re going to be the one who runs the stores. And the smart operators don’t place more value on one over the other. They never get sidetracked by ego battles.
Understanding External Factors: The Impact of Cheap Gas
Also, successful franchisees understand the importance of what’s going on in the world. I was sitting next to one of my clients at a meeting, listening to a franchisor go on and on about how sales were up because the franchisor was doing all of these amazing things. And my client leaned over with a skeptical look on his face and whispered, “Cheap gas!” He knew a basic fact about consumer behavior that the franchisor was glossing over: A recent drop in gas prices had freed diners to spend more on eating out. No one needed to explain to him that a shift in one sector of the economy resonates in others.
Applying Lessons from Franchising to Law
I mentioned earlier that I gleaned two insights from that Burger King franchisee about the importance of cutting the tomato. Here’s the second one: I realized at that moment, studying his impressive store-level P&Ls, that while I could analyze his restaurant business in depth by looking at those statements, I didn’t have the same grasp on key performance indicators in my own business. Surely there must be similar metrics for a legal business, I thought. What the hell are they, and why don’t I know them?
As it turns out, there are comparable metrics for law firms, and I found out what they are. Now, I’m cutting my own tomatoes.
Ensure your business stays profitable and protected. Let’s Talk
