Franchisors Are Like Good Parents, Ben & Jerry’s Exec Says
Clean Juice is about to open its 50th location, a mark it hit after less than four years in business, and CEO Landon Eckles said that growth is directly attributable to unit economics.
“In franchising, unit economics is the most important thing,” said Eckles, speaking during a panel at IFA’s Emerging Franchisor Conference in Miami. Clean Juice, which he noted is the first and only USDA-certified organic juice concept in franchising, sends out weekly sales reports and ranks its franchisees’ performance across the system. It also takes another, more unusual step.
“We collect 100 percent of our franchisees’ P&Ls every month,” said Eckles, and the corporate office actually does the books for them. “We call it financial accounting … it’s pretty unusual but we’ve found that we need to know how they’re doing from our bottom line perspective.”
Eckles, along with Doc Popcorn founder Renee Israel and Ben & Jerry’s senior manager of operations Colette Hittinger, shared their experiences and advice on creating strong fundamental elements within their franchise systems with an audience of franchisors in the beginning stages of building their business.
At Ben & Jerry’s, “every single person in our organization has a little bit of an operational background,” said Hittinger, which allows them to give context to the information and data they’re presenting so franchisees understand how it ultimately drives profitability. Budgeting, she stressed is crucial, especially early on: “You do not want to get in a black hole, because once you start spiraling down, it’s really hard to climb back out.”
Israel, who in 2014 sold Doc Popcorn to Dippin’ Dots and recently exited the system, said its imperative for the franchisor to be accountable for the initiatives they’re spending money on and be purposeful about budgeting.
“My best advice: You can say yes, but if you say yes to something that’s not in the plan, be ready to say no to something else so you can stay on budget,” said Israel. “Don’t get distracted.”
On communicating with franchisees: “Think of it as good parenting,” said Hittinger, and while it’s important to recognize successes, “you also have to be clear about the ‘never evers.’ For us, you’re never ever going to put an unapproved product in one of our scoop shops.”
That parenting analogy extends to the franchise sales and onboarding process, pointed out Eckles, and being clear about expectations from the outset of the relationship.
“We tell all franchisee candidates that it’s an equally big decision for us to bring them in” as it is for the ‘zee to sign the agreement,” said Eckles. “So it’s not just us talking about how great Clean Juice is, but what it takes to run a successful Clean Juice. We almost try to scare them away.
“Yes, you can hit these unit-level economics, but it takes really hard work.”
The Emerging Franchisor Conference continues through Friday at the Hilton Miami Downtown.