Nigel Travis knows there’s a recession going on, but it’s not obvious when he looks at Cleveland-area Dunkin’ Donuts. Local stores have seen like-for-like sales increases for the last six consecutive years. And in the last five years, 14 local franchisees have opened 27 new stores, bringing the total here to 47.
That’s a drop in the bucket of the global growth of Dunkin’ Brands Inc. which operates both the coffee-and-doughnut chain and Baskin-Robbins where Travis serves as CEO. Systemwide sales for the 15,393 locations worldwide totaled $7.2 billion in 2009.
But there’s something special about Cleveland, and Travis recently left the company’s headquarters near Boston and came to town to learn the secret.
“I think it’s great franchisees who have focused on the community, given great service, given products of value,” he said from a new location of Dunkin’ Donuts, where he doubles as president. “That’s the magic difference.”
He defines a great franchisee as someone who understands the local community and is well-trained on the corporate brand. So maybe the better question is how do you identify great franchisees?
“If you ask people about what was important in the restaurants or even retail stores they go in, they will very quickly tell you what’s important to them,” Travis says. “You can deduce from that how focused they are on consistency, focused on quality, value.”
Also ask whether potential franchisees are willing to get out in the community to propel the brand. Sometimes, that’s as simple as explaining your expectations to illustrate what the job will entail.
“At another brand I worked at, I used to speak to all the new franchisees and I told people how hard they had to work to maintain the product, how hard they had to work to get out into the community a lot of foot-slugging as I call it,” Travis says. “Two people actually left because they didn’t want to put that kind of dedication into running their franchise.
“If you’re focused enough on the attributes you’re looking for, which is really hard work, focus on quality, being involved in the community, making sure that you have a consistent product … I think you can very quickly deduce who you should have in the system or not have in the system.”
That due diligence is necessary for finding franchisees who will keep the brand consistent. But there’s a difference between consistency and stagnancy. Especially in an economic climate like this, you need to constantly innovate and improve your brand. Those ideas will often come from franchisees.
“I think too many people have too closed a mind: ‘There’s only one way of doing things,’” Travis says. “If you recognize that it’s about steady, gradual improvement and that ideas come from people who really know the business I mean, let’s face it, franchisees know the business day-to-day better than I do because they’re out in stores, they’re dealing with our guests, the guests tell them things, they’re getting feedback. So I think if you have an open-minded approach, you’ll come up with the right solution.”
Still, not every idea gets a green light. There’s a disciplined thought process between feedback and the right solution.
“I always put it through a sift,” Travis says. “Does it help us make more money? Does it help all franchisees rather than just a few?”
When you have franchisees focused on the right values and you listen to their input, you have a recipe for success.
“It’s listening to the challenges and the points of view that come from our franchisees that’s key,” Travis says. “If you do that, it’s a bit like a team. It’s a two-way dialogue. If you are working together, you can go out there and you can attack whatever economic problems are out there.”
Follow the numbers
Once the expectations are in place, along with the people you think can meet them, you have to make sure your standards are being met. What gets measured gets done may seem trite, but it’s key to maintaining a consistent brand.
Along with regularly measuring the quality and consistency of service and products, Travis throws in a few surprises to keep franchisees on their feet.
“Tonight I’m going to be going to another market and making some unannounced visits,” he says. “So I just turn up and see how the stores look.”
In addition to those little things, Travis keeps a constant eye on the broad metrics most importantly, profitability.
“No one will grow in an economic environment like we’ve had unless they make money,” he says. “You have to be totally focused on making money. You have to make sure that you also deliver value.”
Metrics shouldn’t just be on your mind once a quarter. That awareness starts first thing in the morning, every morning.
“It means getting up early in the morning, looking at yesterday’s numbers,” Travis says. “This is a retail business; you’ve got to know what the numbers were yesterday. … It gives you trends that you can focus on, weaknesses and opportunities. And through that analytical approach, particularly in a retail business like this, I think you’ll be even more successful.”
By the numbers: (2009)
Dunkin’ Brands Inc.
$7.2 billion in systemwide sales
15,393 locations in 46 countries
9,163 U.S. locations in 47 states (including Washington, D.C.)
1,126 corporate employees
1,896 U.S. franchisees
$5.7 billion in systemwide sales
9,186 locations in 31 countries
6,566 U.S. locations in 33 states (including Washington, D.C.)