June 25, 2025 • 32 mins
Episode Title: Helping Franchisees Grow — and Exit — With Purpose
Guest: Fiona Styant, VP of Development, MOLLY MAID Canada
Host: Dave Hansen
Sponsored by: ClientTether — thanks for fueling franchisee success with smarter CRM
What happens when your top-performing franchisees take their foot off the gas? If you’re Fiona Styant at MOLLY MAID Canada, you create a framework to steer them back into growth — or gracefully guide them toward a profitable exit.
In this conversation recorded at the Let’s Grow event in Toronto, Fiona joined Dave Hansen to share her candid, thoughtful take on how franchisors can manage the lifecycle of a franchisee with clarity and care. With over two decades at MOLLY MAID, Fiona brings a rare dual perspective: she oversees both development and ongoing coaching — a role that bridges franchisee onboarding and long-term performance.
Key themes from the episode:
🧭 Exit planning starts at onboarding
Ten years ago, Fiona and her team noticed retiring franchisees were coasting — comfortable but not growing. That sparked a major shift: now, franchisees are asked about their exit goals during training week. Whether it’s five years out or a 10-year plan, Fiona’s team helps owners work backward from their desired outcome.
📈 From audits to alignment
MOLLY MAID’s four-pillar model (performance, engagement, compliance, and satisfaction) uses self-assessment and coaching reviews to spark honest conversations. Franchisees aren’t being “audited” — they’re supported in reaching the goals they set. This shift from punitive to performance-focused support is changing the game.
💸 Valuation transparency
Many franchisees are shocked (not always in a good way) to learn their business isn’t worth what they thought. That’s why Fiona now delivers an annual seminar on business valuation — with plain-talk guidance on EBITDA, chart of accounts, and how to prep for a sale three years in advance.
🚀 Culture of growth
There’s no room for “cash flow coasting” at MOLLY MAID. Franchisees are encouraged to aim high, stay accountable, and know when it’s time to pass the baton. With clear data, strong coach relationships, and a supportive culture, Fiona’s team helps even plateauing owners find their next best step — whether it’s a performance rebound or a well-timed exit.
This episode is a masterclass for any franchisor rethinking how to motivate mature operators — and how to plan for exits that feel like wins.
Catch the full conversation and connect with Fiona on LinkedIn if you want to dig deeper into her franchisee growth strategies
Guest: Fiona Styant, VP of Development, MOLLY MAID Canada
Host: Dave Hansen
Sponsored by: ClientTether — thanks for fueling franchisee success with smarter CRM
What happens when your top-performing franchisees take their foot off the gas? If you’re Fiona Styant at MOLLY MAID Canada, you create a framework to steer them back into growth — or gracefully guide them toward a profitable exit.
In this conversation recorded at the Let’s Grow event in Toronto, Fiona joined Dave Hansen to share her candid, thoughtful take on how franchisors can manage the lifecycle of a franchisee with clarity and care. With over two decades at MOLLY MAID, Fiona brings a rare dual perspective: she oversees both development and ongoing coaching — a role that bridges franchisee onboarding and long-term performance.
Key themes from the episode:
🧭 Exit planning starts at onboarding
Ten years ago, Fiona and her team noticed retiring franchisees were coasting — comfortable but not growing. That sparked a major shift: now, franchisees are asked about their exit goals during training week. Whether it’s five years out or a 10-year plan, Fiona’s team helps owners work backward from their desired outcome.
📈 From audits to alignment
MOLLY MAID’s four-pillar model (performance, engagement, compliance, and satisfaction) uses self-assessment and coaching reviews to spark honest conversations. Franchisees aren’t being “audited” — they’re supported in reaching the goals they set. This shift from punitive to performance-focused support is changing the game.
💸 Valuation transparency
Many franchisees are shocked (not always in a good way) to learn their business isn’t worth what they thought. That’s why Fiona now delivers an annual seminar on business valuation — with plain-talk guidance on EBITDA, chart of accounts, and how to prep for a sale three years in advance.
🚀 Culture of growth
There’s no room for “cash flow coasting” at MOLLY MAID. Franchisees are encouraged to aim high, stay accountable, and know when it’s time to pass the baton. With clear data, strong coach relationships, and a supportive culture, Fiona’s team helps even plateauing owners find their next best step — whether it’s a performance rebound or a well-timed exit.
This episode is a masterclass for any franchisor rethinking how to motivate mature operators — and how to plan for exits that feel like wins.
Catch the full conversation and connect with Fiona on LinkedIn if you want to dig deeper into her franchisee growth strategies
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Hey guys, I want to welcome you to another episode
of the Advisory Board podcast where we bring in experts
across the franchise family and to share best practices that
will help you build a brand that will last. I've
got someone with me that I met at a conference
up in Canada to Fiona's Diet, and if you haven't
met her before, then you should definitely go find around
LinkedIn and connect because she's brilliant and she said a
(00:21):
few things that caught my attention at this event. We'll
talk about those in a minute, but let me tell
you who she is, and then we'll jump into our
topic today, which is ways that you can help your
franchise manage your franchise ease through their thought process of
growth and even exiting a franchise brand. So, but Fiona
is the vice president of Development at Molly Made Canada,
and so it's a unique role because she not only
(00:44):
oversees the franchise awarding process, but also a post awards,
she helps work alongside operations leaders for training and onboarding
and kind of the business strategy as a whole, which
is a really unique role because of that, though, she
has a unique perspective that we're going to get into today.
But she's been there for twenty two years, so she
started when she was she was seventeen years old. Well,
(01:07):
and Molly Maid has a really unique approach in that
they a lot of folks very specialized in one type
of cleaning, but they where you work, live and play.
They want to make sure people have comfort and ease,
and so they spend quite a few different types of cleaning,
which increases their operation workload, but also lots of opportunity there,
(01:28):
so one hundred percent guarantee of their service and so
really really respectable brand. I think everybody knows who Molly
Made is. But also Fiona has been on the board
of trustees, the board of directors for the Canadian Franchise Association,
and she's also an aspiring pilot hopefully we get some
time to do that in the future and a flight attendant.
(01:50):
So Fiona, thanks for being here with us and tell
us a little bit more about yourself and a little
bit about Molly Made, and then we'll jump right into
that topic together.
Speaker 2 (01:57):
Well, well, thanks so much for having me and this
is very exciting thing. Well, I love Molly Mate, it's
a fantastic company. And yes, we have huge brand awareness
in Canada. In fact, we have twenty one times more
brand awareness than our next closest competitor. So I mean
that's pretty good. I would say, I show you, yeah,
(02:18):
as an industry standard. So yeah, so you know, we're
very well known in Canada. I mean, unless you get
into those small towns, which that is actually currently what
we're trying to do because we're in most urban markets
across Canada because we've been in business since nineteen seventy nine,
and now our big goal is to get into kind
(02:38):
of the more rural markets and bring Molly Made everywhere
you know, to everyone in Canada.
Speaker 3 (02:45):
So we have a different.
Speaker 2 (02:46):
Model for that, and it's just a cleaner operator model,
and so we're really excited about that.
Speaker 1 (02:52):
Yeah. Love that.
Speaker 3 (02:54):
Yeah.
Speaker 1 (02:55):
Well, so Fionda, thanks again for being here and sharing
your expertise. As I was mentioning, we were at the
Let's Grow vent in Toronto and she said something that
aligned so well with what I what I believe. But
I you know, my wife and I just sold our
franchises in January. We've been multi into territory owners. I've
serviced the industry, so I just love the space and
I'm a businessman and a lot of people and I've
(03:16):
sold other businesses before, so when I got into this,
like my mindset was like, we need to build a
business that increases in value, so at some point we
exit the business or transferred on. Like the value of
the business is kind of key to me, and people
don't talk about it like that, but you did. In fact,
you mind maybe share a little bit with us, like
why is it so important to you and to the
mollu Made team that your franchise owners understand what the
(03:39):
value of their their franchise businesses.
Speaker 2 (03:42):
Sure. Absolutely, I think part of it started. Honestly, we didn't.
We weren't as focused on it a number of years ago.
But about ten years ago we started seeing our franchisees
retiring and what we noticed is is a lot of
them had kind of taken their foot off the gas
and they had become, you know, a bit more comfortable
(04:03):
putting their feet up on their desk kicking back because
they were making money and the business was.
Speaker 3 (04:07):
You know, going along, but they weren't really growing and
so we kind of thought, well, that's not what kind
of company we want to be.
Speaker 2 (04:15):
We want to be winning, we want to you know,
get people who are driven and motivated, and so we
started thinking, well, what can we do? And so a
big part of that is now we started in our
training week and we actually talk about what is your
exit strategy? What are your long term plans? And we
get them thinking about that. You know, is your plan
five years?
Speaker 3 (04:35):
Is it ten years?
Speaker 2 (04:35):
Are you looking to make a million bucks? Are you
looking to make you know, two million in sales? Like?
Speaker 3 (04:40):
Where are you at? And so when you get to
that point you can kind of work that.
Speaker 2 (04:45):
But then as well as that because once you get
in you're excited, everything's great, then.
Speaker 3 (04:50):
You kind of lose sight of that a little bit,
I think.
Speaker 2 (04:52):
And so what we do and what we thought was
important is when we go out to do our annual
business reviews our coaches do that part of our discussion
is on the business value. So we say, okay, so
when you're looking at what your business is valued at today,
let's look at what you purchased it for, like, you know,
how much you pay for the business and what it's
(05:15):
worth today. And usually when we look at that multiple,
we're kind of looking at a multiple of you know,
if it's declining, if it's stagnant, or if it's growing,
And we have kind of three different multiples, and so
we say, okay, let's look at where you are today
and is your business growing and if it's not, if
it's stagnant, what are you going to do to make
it grow? And if it's declining, maybe you need to
(05:37):
look at an exit strategy. So it really kind of
changes the mindset of the franchise e in terms of
what am I doing this for? You know, yeah, I'm
making money, Am I making enough money? Or you know,
as much money as I want to make?
Speaker 3 (05:54):
And really at the end of it, at the end game,
like what are you going to sell it for? What's
it worth?
Speaker 1 (06:00):
So you guys started this change around ten years ago?
Or when did you guys start this process change? I'm
really interested to know the impact of it.
Speaker 2 (06:08):
Yeah, I mean I would say it was about ten
ten years ago we started talking about it.
Speaker 3 (06:13):
It did take a little while for us to.
Speaker 2 (06:15):
Implement all of the changes, you know, like from the
start of putting it in the training week, to really
get people thinking about it, to work with our coaches
on the coaching strategy from the beginning, and then putting
into place some targets that they were going to achieve,
and so when they you know, let's say someone came
in and said, well, our franchise.
Speaker 3 (06:35):
Agreement is a five year term.
Speaker 2 (06:37):
So let's say they came in, they have the full
five years, and what are they going to do in
that five years? And then when they got to that
you know, five year period, did they reach those goals
that they set for themselves and if not, why and
are they going to achieve them? And how much longer
is it going to take? Because for us, I'm sure
a lot of franchisors would say this. In fact, I
(06:57):
hear them and I agree with it. You know, I
want to make sure it always make sure it's the
right fit right, not from just a cultural standpoint, but
what they're going to do in the business and what
is the fit for them, you know, So we want
people who want to be successful. Of course, part of
our business, like we had talked about earlier just when
(07:18):
we were chatting, is you know, it's really important that
the franchisees align with our values, right, and some of
our values are to make sure that the people that
we are taking care of, you know, have the time
to do things that they love to do instead of
spending the time cleaning, which is something a lot of
people don't want to do. Right.
Speaker 1 (07:39):
Yeah, I'm one of them, by the way, not a
big yeah.
Speaker 3 (07:43):
Yeah.
Speaker 2 (07:43):
So I mean it's for all those reasons that we
started really thinking about it, and also, like I said,
because we had a big exodus, especially kind of over
the last I would say six seven years of franchisees
that were like thirty five thirty six, seven, thirty eight
years franchisese wow, call them long term not old by
the way, long term franchise ease who were tired out.
(08:05):
And so we just said, you know what, we're not
going to do this anymore. You know, we're not going
to allow people to just kind of get to a
point and just kick back and say, you know, I'm
okay with this level of revenue, this level of profit. Now,
that doesn't work for anyone.
Speaker 1 (08:21):
Yeah, what we call that cash flow coasting, right, like,
get to that comfort zone. And I was at it.
I was in a meeting and a guy said his
son's just got committed to play D one football. He
was the speaker, and he said, you know, no, there's
no growth in the comfort zone. There's no comfort in
the growth zone. And I find that what you're describing
right now is is how do we keep people in
(08:43):
the growth zone, How to keep people from getting comfortable
enough they want to kick back and just relax, and
but we want people to relax too. So it's finding
that fine balance. And I love the way you guys
do this because you now they set goals right at
the very beginning, to set five year goals. I'm guessing
one two five year goals or something like that. And
so now, as my sister taught me, she was an
(09:05):
elementary school teacher, and she said, you know, the best
thing I ever learned in my undergrad was that you
make something else the bad guy. I said, what do
you mean. She's like, well, the clock. So if everyone's
you know, the kids are racing against the clock to
get their spelling test done, you're not the bad guy.
As the teacher saying okay, we have five minutes left.
She says, you don't say that. You say the clock
only shows five minutes left. But in your world you're saying, hey,
(09:28):
you guys are not at working. These are your goals.
You set your goals, and managing you toward your goals
that you set How is that. How is that process
of using their own goals that they set help them
benchmarking its performance. How is that taking the strain out
of that discussion that might have been awkward otherwise.
Speaker 2 (09:46):
Oh, it really has almost eliminated it because you're ultimately
you know what, You're right. It's not the coach coming
in and saying, hey, this is what you need to do.
Speaker 1 (09:55):
No.
Speaker 2 (09:55):
No, the coach is coming in saying, hey, this is
what you said you want to do. I'm here to
help you achieve those goals. Let's look at right, let's
look at how.
Speaker 3 (10:03):
You're doing now.
Speaker 2 (10:04):
I will also say we do assess for fit, and
we do that now early on too, and we've learned
that as well the hard way, you know, by bringing
some people in and sometimes you know what we all
in development, you know, make mistakes or maybe just maybe
you have you're a bit desperate and you need to
get someone into a market. Right, Sometimes that happens, it's
(10:24):
a resale, and so we allow that, even though that's
not the best thing to do. And so then what
we do is now we have a process where we
look at six months, twelve months, in two years, and
we assess for fit and we make very very specific.
Speaker 3 (10:39):
It's all documented, it's all discussed.
Speaker 2 (10:42):
But it's always the conversation is about, you know, how
they're doing in terms of how they want to be
doing and what their goals are to achieve that, and
if they're not meeting that and they're not reaching it,
then hey, maybe this isn't a good fit for whatever
the reason. Maybe, And then it's making them see that.
Speaker 3 (11:00):
So then it's not mess saying hey again, you know
it's you. It's this.
Speaker 2 (11:03):
It's like, hey, think about it, take a look at
the big picture, and you tell me what you where
you think you should be at this point?
Speaker 3 (11:11):
Right?
Speaker 1 (11:11):
Yeah? And now your team, you fill your FPCs. Their
focus is how do I help you attain your goals?
What resources can I do? What training can I do?
How can I help your office staff perform better? Rather
than what a lot of the industry does, which is
we're going to audit you, right, and love's a good audit,
you know, and then after the audit, I'm going to
tell you everything you're doing wrong. Whoa like, no wonder
(11:33):
people hate being added and no wonder there's that natural
inks right, and a lot of brands because rather than
looking toward the positive outcome and managing toward that. It's
we're going to it's almost punitive. It feels punitive all
the time. And that's that creates a really angsty relationship
between home office and franchise owners sometimes, doesn't it.
Speaker 3 (11:52):
Absolutely?
Speaker 2 (11:52):
And and the other thing we focus on too is
we really we have four pillars in our business, so performance, engagement,
and compliance and satisfaction.
Speaker 3 (12:02):
Okay, And so when we go out.
Speaker 2 (12:04):
To do these meetings, one thing we do is we
have like a it's like a scale one to five,
and in each area we have a few key points
and we ask them to assess themselves and then on
our side, we assess them as well. And then we
meet and we discuss it and we say, Okay, how
do you think you're doing, and here's how we see
(12:24):
you're doing. And most of the time some of it
is subjective, but a lot of times you can also
bring in.
Speaker 3 (12:30):
The metrics and the actual data.
Speaker 2 (12:32):
And so that also speaks to it as well, because
sometimes and I love this and I say it all
the time, perception is not always reality. Because sometimes you
have a franchisee who really thinks they're doing well and
maybe in their minds they are, but when you look
at the data and you look at really the key
metrics of how.
Speaker 3 (12:50):
They're performing, they're really not performing that well.
Speaker 2 (12:54):
You know. So all these things I help, I think,
help to change that conversation to make it positive and
make them kind of take a step back and look
at themselves.
Speaker 3 (13:04):
Do some self reflection.
Speaker 2 (13:06):
So then it's them seeing the bigger picture and not
us saying, hey, you know you're.
Speaker 3 (13:10):
Not doing this.
Speaker 2 (13:11):
It's like, okay, here, just look at look at the information,
and you assess how you're doing.
Speaker 1 (13:16):
Right, Yeah, the best, the best. They don't want to
listen to anyone else often, and that's the normal human
response with our own team members. Sometimes we'll do this,
but not often. It's usually when okay, something's not going
well here, let's us say, it's kind of do you
guys use us at all in the way you guys operate? Well?
If they have a process like this in the US,
(13:37):
where you you evaluate, like here are core values, how
would you rate yourself or you have one hundred percent complying?
Are you most of the time complying or you're struggling
with this one? And we and but we have the
manager and the team member do their own assessment, and
where you see the gaps is usually where you need
to spend some time to discuss because if the owner
the manager says, hey, you're really struggling, and they're like,
(13:58):
I'm killing it, then so sometimes you have to zero
and say do you understand what this key, what this
core value means and how you should be implementing it.
And that's that's a meaningful discussion every time. And then
you say that, I.
Speaker 3 (14:12):
Think all these things help.
Speaker 2 (14:13):
And and the other thing I will say that I've
noticed is, yes, definitely a better relationship with our coaches
and our franchisees.
Speaker 3 (14:22):
The other thing I will tell you for one percent
sure is.
Speaker 2 (14:26):
When we go out to our company meetings, our seminars,
our regional meetings, and our big national convention. Now we
find people are you know, wanting to be winners, and
they want to be with the winners. And if you're
not on board and you're not doing the things you
need to do to be successful, you see those people
kind of on the on the outskirts. You know, those
(14:46):
people that were kind of kicking back a bit, or
are kicking back a bit, they're kind of you know,
they're gonna they're gonna feel that and they're going to
want to move on anyways, because the bulk and majority
of our friends esse that winning attitude, and they do
they are striving to meet those goals, right because we're
constantly talking about them.
Speaker 1 (15:08):
Yeah, that makes a huge difference, and it's I think
people undervalue the impact of managing the culture of the
franchise owners that way. Like if you have a bunch
of people that are fat and happy and that are
kind of inert because they don't want to change anything
you're trying to roll out in new programs, you get
nothing but resistance. But if the majority are focused on
(15:29):
growing and trying to win and trying to scale, they're
going to be deploying those things at eager for new ideas.
And then the other folks, as you said, they start
to feel like outsiders, and not that you want them.
I mean you want to tip the hat like, hey,
you've been here for twenty five years, Bob, like we
really appreciate you. And perhaps it's a good time for
(15:49):
exit planning. If you don't feel like you fit in anymore,
you don't want to put in the effort to invest
in the strategies no problem, like there's an easy answer here.
Speaker 2 (15:57):
Yeah, And that's a good point to you, because you know,
we did a lot of research and we looked at
kind of when was that peak point where we felt
that a franchise e was, you know, kicking back feeling
kind of fat and happy, like you said, And for us,
it's about the twelve twelve year mark. So so I mean,
we're happy to keep anyone in our system as long
(16:18):
as they are looking to grow and be successful. And
I mean that's factoring some of some events that happen
in life, of course. But if we have a franchise
e that is all in and they're given that they're
all and they're working on goals and being successful, then
that's all we're looking for. But that's why I think,
you know, back in the day, we had much longer
(16:39):
terms on our franchise agreement, and now we've made it
five years. Used to be ten years with some consecutive
ornewal terms, and we don't do that any longer because
you know, again, I think that's setting that tone of
what type of franchise we want to have as part
of our system.
Speaker 1 (16:57):
Yeah, I love that. Well, let's talk about these so
now you have a conversation. Right, Let's say you sit
down with an owner. They've been there for fifteen years,
they've been there for ten years, it doesn't matter, and
you start to see that they're plateauing. How have you
guys found what's the best way to approach that conversation
with dignity? And because I can see how some of
(17:18):
them might get offended, I'm sure the naysayers like, we'll say, oh,
but that's going to hurt their feelings, doesn't have to. Clearly,
you guys have a good process in place, But how
have you found that you maneuver around that with care
and delicacy so you don't hurt people's feelings when you say,
I think it might be time to evaluate a positive exit,
how do you guys do?
Speaker 3 (17:38):
Well, well, sorry about that.
Speaker 2 (17:40):
Ultimately, we have our franchise coaches do have really strong
relationships with our franchisees and there is a level of
trust there and so they are able to have these
conversations because our franchisees will say that we do care
about them, and that is one of our core values
(18:02):
is caring, and it is one of our five core values.
Speaker 3 (18:06):
We do care about them and we want to see
them happy and we want them to be successful. And
I can say that about every single one and I
bring them in and I mean that.
Speaker 2 (18:15):
And so you know, when we go to have these conversations,
we do look at the business value. We do look
at the profit they're taking home. We want them to
be profitable. That's why we look at their p and
ls every single year. And so if they're starting to
be stagnant or decline I mean over a quarter or
a couple of quarters, you know.
Speaker 3 (18:35):
What, people have lives, they live lives. Things can happen.
Speaker 2 (18:38):
But if we see that it's hitting the third quarter
and it's not just due to some situation that's happening,
then we're going to step in and we're going to say, hey,
you know, we've got to talk about this because a
you are losing business value, you're losing profit, and we're
losing market share.
Speaker 3 (18:57):
This is a partnership. It should be win win, right,
and we.
Speaker 2 (19:01):
Care about you and we care about your business and
we want you to exit, you know, making money and
with a great business value.
Speaker 3 (19:10):
So at that point, usually we'll look at doing.
Speaker 2 (19:13):
Some type of performance improvement plan where we really focus
on the key areas of the business that they have
to change or improve upon so that they can get growth,
and we timeline it.
Speaker 3 (19:26):
And you know, because ultimately, if they continue.
Speaker 2 (19:29):
To decline and when we talk to them about this,
then that's not doing anybody any favors. Right, we want
them again to be profitable and to exit with lots
of money in their pocket. So I think it's the
approach that we take because it's not just about us. Yeah,
we want our market share, and of course we're very
honest about that, and the.
Speaker 3 (19:48):
More money they make, the more money we make. I mean,
that's franchising.
Speaker 2 (19:52):
So but ultimately it's about them too, you know, it's
about their profit and their business value. So when we
put it like that, usually most franchises are most people
they can appreciate that and understand it. And you know,
we're saying, like, you don't want to continue to build
like this, you know. Yeah, And so that's kind of
how we.
Speaker 3 (20:12):
Frame it and it seems to work really well.
Speaker 1 (20:15):
Yeah. I love that. And I'm guessing sometimes Fiona, you
guys have a conversation with somebody who they don't want
to sell or maybe they do. Well, let's say you
have this conversation is, hey, you're plateauing. There's been a
couple of quarters. Now maybe it's time to evaluate, you know,
getting things back on track with a plan, or time
to exit. When somebody says I'm happy the way I
(20:38):
am and I'm going to ride my contract out for
the next four years. I just renewed it. Like, how
do you approach working with them? Because that one feels
like it'd be the most awkward one I think to
talk to about.
Speaker 2 (20:49):
This, Yeah, for sure, And we do have that, you know,
in fact, to have someone right now recently who is
just not in a great place and he doesn't want
to sell.
Speaker 3 (20:58):
He loves his babe.
Speaker 2 (21:00):
As he calls it, and he's fairly new to the system,
and to be honest, it hasn't been the greatest fit.
Speaker 3 (21:05):
So you know, I've been.
Speaker 2 (21:07):
Talking to him a lot. And then now what we're
doing is we're just presenting our data. We're doing some
mystery shopping. So we're saying, you know, are you active
in the business, are you doing the things you need
to do to be successful to grow the business, And
so we're looking at very specific criteria to measure against.
We're looking at his business plan, we're tracking his weekly sales.
(21:29):
We're talking about the number of customer or clients editions,
how many cancelations. He's having so key metrics within the
business that you know, if you're going to be in
this business. Another one of our core values is being
all in. If he's not in, he's not in alignment
with our core values. And so I think it's putting
everything on the table to say here, here's everything you know.
Speaker 3 (21:50):
How are you doing? Like, do you think that.
Speaker 2 (21:53):
You're doing everything you need to be successful? Is this working?
Is this a win win partnership?
Speaker 1 (22:00):
Yeah? And I'm guessing it's pretty obvious when you use
an objective data right to have that conversation. How do
you how do you help people see the value of
planning for an exit at that point if you're like
culture fit, not going to be it's not it's not
working there, they don't align with their core values, or
(22:21):
they just aren't they'ren't ready, they're not in growth mode anymore.
They want they really are. Frankly, they're already emotionally exiting
right before they physically exit, So how do you help
coach people into that phase?
Speaker 2 (22:33):
So ultimately, again, I think it comes down to looking
at that business value and saying, Okay, here's what your
business is worth today. If you keep going on this trajectory, Okay,
your business is worth X amount today and it's going
to be worth x amount less in three months from now,
X months you know x an amount last and six
months from now. So so where do you want to be?
(22:55):
And it could take you six months to a year
to sell, So so think about that. You know, if
you don't get that business listed now, then you could
be looking at very little, you know, walking away with
much less than it's worth. So we have those conversations
and sometimes when you say it in that regard, then
they sit back and they look and you know, the
(23:15):
best predictor of future is kind.
Speaker 3 (23:17):
Of past performance, right, not always, but.
Speaker 2 (23:21):
In a lot of cases, and certainly in these situations
I find, and especially.
Speaker 3 (23:26):
If it's been on a continual decline. So you can
kind of explain that.
Speaker 2 (23:30):
And I mean, unless someone really is just so headstrong
and not seeing it, most.
Speaker 3 (23:35):
Of the time, they can understand it. And money talks.
Speaker 2 (23:39):
People, right, Like, you invest all that money, you want
to walk out with at least what you invest in.
Speaker 1 (23:45):
Hopefully two three X depends on how long you're going
to be in at maybe ten x twenty x. But
when you first started doing it, where your owners surprised
to understand how much their business was worth in a
good and a bad way.
Speaker 2 (24:00):
Okay, they a lot of them were really surprised, especially
in some cases really surprised at how much it wasn't worth.
Speaker 1 (24:10):
I was going to ask, how, I'm guessing it goes
both ways. But more often than not, did you find
they were overvaluing their business?
Speaker 3 (24:17):
They were.
Speaker 2 (24:18):
They definitely were, especially the ones that were long term.
They really thought their businesses were worth so much more.
And so then when we put it out to them.
And that's another thing that we started doing too, which
I didn't mention, is once a year at one of
our seminars, I get up and I do a whole presentation.
It's not usually not that long, like forty minutes, and
(24:39):
I talk about business valuation. I talk about you know
when someone goes out to buy a house and you
have this beauty, like two houses exactly the same, but
one is beautifully manicured and well kept and you know everything,
and then the other one is dilapidated, they haven't painted it,
and all those types of things, but which business is going.
Speaker 3 (24:57):
To sell and sell for more? Right?
Speaker 2 (24:59):
So f client standard, you got to look at those
two things. So I talk about that, and then I
talk about business value and the importance of that right
and kind of you know, from an account's perspective, how
they evaluate, from you know, a service industry perspective, how
you valuate. And then I say, okay, where are you today?
Are you growing, stagnant or declining? So I talk about
(25:20):
all of those things, how long it could take to
sell the business, and starting to think about that because
some businesses it can take two years to sell, right,
and so you want to make sure that you've got
an exit plan, so you're planning for that time as well.
Speaker 1 (25:34):
I love, I'm so glad you teach them that because
most people, especially in service businesses. You guys in some
regards could argue there's some recurrence, right because of subscriptions,
but it's still going to be a multiple VBA. Al right,
no one's giving you a top line multiple. You're not
a software company. So people generally don't understand that. I
didn't realize that. You know, you just you know stuff
and you just assume everybody knows it. But I was
(25:55):
talking to people like, oh, my business is worth this much.
I was shy and I just said, well, actually, I
don't think that's even close. And this is just a
friend I was talking to and he's like, what do
you mean. I said, well, your industry is going to be,
you know, just going to how your evaluation is going
to work, and you got to take a look to
see what it is. But you're probably going to have
like a I'm guessing a three to nine x depending
about your growth rate, your EBITDA margin, like all these things.
(26:17):
They're going to look at those and they're going to
give you a multiple of your EBADA. So if you've
been playing it close to the vest, you've been sucking
a lot of cash out of the business for personal
fund expenditures like that that company boat and that company
RV and your ibada's garbage, your multiple is going to
be terrible. Your business is worth seventy thousand dollars right now,
and they're like, and.
Speaker 2 (26:37):
We talk about that too. You know, if you're running
all these extra things through the business, and I've seen
some very interesting ones, then you know what, you got
to get a normalized statement. You've got to be able
to explain that you got to be able to show
your true profit.
Speaker 3 (26:50):
So I talk about all of those things.
Speaker 2 (26:52):
Or at least three years before you're going to sell,
like you plan to sell, make sure that you've got
those those financials right, make sure that chart of accounts
is accurate. Right, So we do talk about those things.
So we really try to keep all that top of mind.
And I guess it's not just by doing one thing,
which we've discussed here, it's by doing all of those
(27:13):
things right. And so the other thing is we did
bring in a standard chart of accounts and that was
a few years ago as well, and that's really help
franchises understand their profitability because we did have a problem
with that as well. You know, they really if you
said to a franchise e, how much money did you
make last year? You'd be like, oh, you know, I
(27:34):
don't know, I make I make good money. Well how
much how much money did you make?
Speaker 3 (27:39):
And they can tell you and I'm.
Speaker 2 (27:40):
Like, what you know? So so now we talk about
the standard chart of accounts, We talk about normalized journeys
and making sure you understand your true profit and what
does that look like, you know, and all those things
I think it's so essential as a business owner, and
sometimes we have we have people that come into our
system and they're just not as familiar with that side
(28:01):
of the business. They're fantastic franchisees. Oh you're wonderful people, great.
Speaker 3 (28:07):
Franchises, they're just not so great on the financial side.
Speaker 1 (28:10):
Yeah. Well, I'm glad you brought that up, because having
a standard chart of accounts is kind of critical, especially
if you're Adam nineteen. If you want to provide reliable,
consistent data. Sometimes you get those funky p and ls
back and you're like, I'm not sure how we can
report with any sort of accuracy or confidence in this
Adam nineteen and the FDD.
Speaker 3 (28:29):
In Canada, We're lucky we don't have the item nineteen.
Speaker 1 (28:32):
Yeah right, you're right now.
Speaker 3 (28:33):
Yeah, so that's okay.
Speaker 2 (28:35):
But having said that, what I always say to the
franchisees is, how are you going to explain, Like, we're
not explaining your profit and laws statement, your financial statement.
So unless you can pay your accountant to come out,
then you need to be able to explain, right, And
so that's what I talked to them about. You need
to understand this because when you do go to sell
your business, you need to make sure that you can
(28:57):
explain to the buyer.
Speaker 3 (28:59):
Exactly I'm much money.
Speaker 2 (29:00):
Because everybody says, I swear in almost all my conversations
that comes up in the first how much money am
I going to make?
Speaker 1 (29:06):
Fiona right, Well, it depends on you, really, how much
do you want to suck out of it? And yeah, well,
and you said someone a minute ago, I just want
to highlight and I know we probably better wrap up
after that. But this has been great, Honestly, I hope
everyone listening is taking note of ways that you can
approach this differently, especially maturing franchise systems where people are
(29:27):
starting to renew their contracts, and this is where you
really need to start paying attention. But you talked about
a three year window. We've glazed right over, so I'm
going to come back. You'd mentioned that your franchisees need
to understand, especially if they're thinking they're going to exit
sometime in the next five years. Anybody who might ever
look at their business, any business broker group who might
help them put it on the block and try to
(29:47):
help them sell it, they're going to require three years
of financials and those historical financials are how they're going
to derive the value of the business, both both stat
like current business and future business. And if you're on
a growth curve, this is why it's so important you're
growing when you're selling, because then you can have you
can you can show a trend line and you can
expect a buy rate that actually can reflect a future
(30:09):
value or future revenue line of the business. So but
if they don't start three years before, if they say
I want to sell my business this year, and then
they haven't had a clean chart of accounts, or they've
been you know, shuffling money through the business and personal
expenses running them as business expenses, like it makes the
P and L on the ebidolic bad, the net income bad.
So those are usually what you get a multiple on.
(30:31):
And I just I want to make sure we highlight
that for everybody that this process really needs to be
a constant dialogue like you guys have, so they can
be trained and ready and say, I think I want
to sell my business, so I'm cleaning up this year
because next year I want to start putting on the block.
So at least you got at least one full year
of good data to go up absolutely.
Speaker 2 (30:48):
And you know, I'll just add to that is that
the one thing is is people will not buy on potential.
You can say, you know, you can sell a franchise,
and this kills me when franchisees say, oh, but there's
so much potential in my market, Fiona, I know I'm declining,
but there's so much potential. But people don't buy our potential.
They want to see that growth trajectory, and that's when
(31:09):
you're going to get the higher multiple. That's when you're
going to get your big bang for your buck, right,
And so I always I always talk about that too,
because if you're declining year over year, then then the
buyers can you understand, oh, what's happening with this market?
Like is this a market I really want to go into?
Maybe this is not a good market form Molli made,
even though it probably is. We just have a you know,
(31:30):
a potential or a franchise who maybe has kicked back.
But you know, so those are some of the things
too that I think everybody has to remember. It's that
three year preer and you're right, you want to show stable,
steady growth, right, so that you can show there is
potential in my market and then have the clean financial
statements for sure.
Speaker 1 (31:48):
Yeah, I totally agree with you. You've been fantastic. I
know you've got to get going. What's the best way
for people to reach out to you if they want to,
they want to follow up and ask you questions and
maybe develop a similar program in their brand.
Speaker 2 (31:59):
Sure. Well I'm on LinkedIn, so you can look me up,
you honest giant and you know, or you can reach
out to me anytime and my email is F'stiant at
molliemad Dots, but probably LinkedIn would be the easiest way.
Speaker 1 (32:13):
Yeah, yeah, that sounds great. Well, you've been generous with
your time, and thanks again for making a point of
sharing some of these insights you guys have gained by
rolling out such a good program with you with your owners.
Thanks for that.
Speaker 3 (32:24):
Well, thank you. It was great to be here. I
really appreciate it.
Hey guys, I want to welcome you to another episode
of the Advisory Board podcast where we bring in experts
across the franchise family and to share best practices that
will help you build a brand that will last. I've
got someone with me that I met at a conference
up in Canada to Fiona's Diet, and if you haven't
met her before, then you should definitely go find around
LinkedIn and connect because she's brilliant and she said a
(00:21):
few things that caught my attention at this event. We'll
talk about those in a minute, but let me tell
you who she is, and then we'll jump into our
topic today, which is ways that you can help your
franchise manage your franchise ease through their thought process of
growth and even exiting a franchise brand. So, but Fiona
is the vice president of Development at Molly Made Canada,
and so it's a unique role because she not only
(00:44):
oversees the franchise awarding process, but also a post awards,
she helps work alongside operations leaders for training and onboarding
and kind of the business strategy as a whole, which
is a really unique role because of that, though, she
has a unique perspective that we're going to get into today.
But she's been there for twenty two years, so she
started when she was she was seventeen years old. Well,
(01:07):
and Molly Maid has a really unique approach in that
they a lot of folks very specialized in one type
of cleaning, but they where you work, live and play.
They want to make sure people have comfort and ease,
and so they spend quite a few different types of cleaning,
which increases their operation workload, but also lots of opportunity there,
(01:28):
so one hundred percent guarantee of their service and so
really really respectable brand. I think everybody knows who Molly
Made is. But also Fiona has been on the board
of trustees, the board of directors for the Canadian Franchise Association,
and she's also an aspiring pilot hopefully we get some
time to do that in the future and a flight attendant.
(01:50):
So Fiona, thanks for being here with us and tell
us a little bit more about yourself and a little
bit about Molly Made, and then we'll jump right into
that topic together.
Speaker 2 (01:57):
Well, well, thanks so much for having me and this
is very exciting thing. Well, I love Molly Mate, it's
a fantastic company. And yes, we have huge brand awareness
in Canada. In fact, we have twenty one times more
brand awareness than our next closest competitor. So I mean
that's pretty good. I would say, I show you, yeah,
(02:18):
as an industry standard. So yeah, so you know, we're
very well known in Canada. I mean, unless you get
into those small towns, which that is actually currently what
we're trying to do because we're in most urban markets
across Canada because we've been in business since nineteen seventy nine,
and now our big goal is to get into kind
(02:38):
of the more rural markets and bring Molly Made everywhere
you know, to everyone in Canada.
Speaker 3 (02:45):
So we have a different.
Speaker 2 (02:46):
Model for that, and it's just a cleaner operator model,
and so we're really excited about that.
Speaker 1 (02:52):
Yeah. Love that.
Speaker 3 (02:54):
Yeah.
Speaker 1 (02:55):
Well, so Fionda, thanks again for being here and sharing
your expertise. As I was mentioning, we were at the
Let's Grow vent in Toronto and she said something that
aligned so well with what I what I believe. But
I you know, my wife and I just sold our
franchises in January. We've been multi into territory owners. I've
serviced the industry, so I just love the space and
I'm a businessman and a lot of people and I've
(03:16):
sold other businesses before, so when I got into this,
like my mindset was like, we need to build a
business that increases in value, so at some point we
exit the business or transferred on. Like the value of
the business is kind of key to me, and people
don't talk about it like that, but you did. In fact,
you mind maybe share a little bit with us, like
why is it so important to you and to the
mollu Made team that your franchise owners understand what the
(03:39):
value of their their franchise businesses.
Speaker 2 (03:42):
Sure. Absolutely, I think part of it started. Honestly, we didn't.
We weren't as focused on it a number of years ago.
But about ten years ago we started seeing our franchisees
retiring and what we noticed is is a lot of
them had kind of taken their foot off the gas
and they had become, you know, a bit more comfortable
(04:03):
putting their feet up on their desk kicking back because
they were making money and the business was.
Speaker 3 (04:07):
You know, going along, but they weren't really growing and
so we kind of thought, well, that's not what kind
of company we want to be.
Speaker 2 (04:15):
We want to be winning, we want to you know,
get people who are driven and motivated, and so we
started thinking, well, what can we do? And so a
big part of that is now we started in our
training week and we actually talk about what is your
exit strategy? What are your long term plans? And we
get them thinking about that. You know, is your plan
five years?
Speaker 3 (04:35):
Is it ten years?
Speaker 2 (04:35):
Are you looking to make a million bucks? Are you
looking to make you know, two million in sales? Like?
Speaker 3 (04:40):
Where are you at? And so when you get to
that point you can kind of work that.
Speaker 2 (04:45):
But then as well as that because once you get
in you're excited, everything's great, then.
Speaker 3 (04:50):
You kind of lose sight of that a little bit,
I think.
Speaker 2 (04:52):
And so what we do and what we thought was
important is when we go out to do our annual
business reviews our coaches do that part of our discussion
is on the business value. So we say, okay, so
when you're looking at what your business is valued at today,
let's look at what you purchased it for, like, you know,
how much you pay for the business and what it's
(05:15):
worth today. And usually when we look at that multiple,
we're kind of looking at a multiple of you know,
if it's declining, if it's stagnant, or if it's growing,
And we have kind of three different multiples, and so
we say, okay, let's look at where you are today
and is your business growing and if it's not, if
it's stagnant, what are you going to do to make
it grow? And if it's declining, maybe you need to
(05:37):
look at an exit strategy. So it really kind of
changes the mindset of the franchise e in terms of
what am I doing this for? You know, yeah, I'm
making money, Am I making enough money? Or you know,
as much money as I want to make?
Speaker 3 (05:54):
And really at the end of it, at the end game,
like what are you going to sell it for? What's
it worth?
Speaker 1 (06:00):
So you guys started this change around ten years ago?
Or when did you guys start this process change? I'm
really interested to know the impact of it.
Speaker 2 (06:08):
Yeah, I mean I would say it was about ten
ten years ago we started talking about it.
Speaker 3 (06:13):
It did take a little while for us to.
Speaker 2 (06:15):
Implement all of the changes, you know, like from the
start of putting it in the training week, to really
get people thinking about it, to work with our coaches
on the coaching strategy from the beginning, and then putting
into place some targets that they were going to achieve,
and so when they you know, let's say someone came
in and said, well, our franchise.
Speaker 3 (06:35):
Agreement is a five year term.
Speaker 2 (06:37):
So let's say they came in, they have the full
five years, and what are they going to do in
that five years? And then when they got to that
you know, five year period, did they reach those goals
that they set for themselves and if not, why and
are they going to achieve them? And how much longer
is it going to take? Because for us, I'm sure
a lot of franchisors would say this. In fact, I
(06:57):
hear them and I agree with it. You know, I
want to make sure it always make sure it's the
right fit right, not from just a cultural standpoint, but
what they're going to do in the business and what
is the fit for them, you know, So we want
people who want to be successful. Of course, part of
our business, like we had talked about earlier just when
(07:18):
we were chatting, is you know, it's really important that
the franchisees align with our values, right, and some of
our values are to make sure that the people that
we are taking care of, you know, have the time
to do things that they love to do instead of
spending the time cleaning, which is something a lot of
people don't want to do. Right.
Speaker 1 (07:39):
Yeah, I'm one of them, by the way, not a
big yeah.
Speaker 3 (07:43):
Yeah.
Speaker 2 (07:43):
So I mean it's for all those reasons that we
started really thinking about it, and also, like I said,
because we had a big exodus, especially kind of over
the last I would say six seven years of franchisees
that were like thirty five thirty six, seven, thirty eight
years franchisese wow, call them long term not old by
the way, long term franchise ease who were tired out.
(08:05):
And so we just said, you know what, we're not
going to do this anymore. You know, we're not going
to allow people to just kind of get to a
point and just kick back and say, you know, I'm
okay with this level of revenue, this level of profit. Now,
that doesn't work for anyone.
Speaker 1 (08:21):
Yeah, what we call that cash flow coasting, right, like,
get to that comfort zone. And I was at it.
I was in a meeting and a guy said his
son's just got committed to play D one football. He
was the speaker, and he said, you know, no, there's
no growth in the comfort zone. There's no comfort in
the growth zone. And I find that what you're describing
right now is is how do we keep people in
(08:43):
the growth zone, How to keep people from getting comfortable
enough they want to kick back and just relax, and
but we want people to relax too. So it's finding
that fine balance. And I love the way you guys
do this because you now they set goals right at
the very beginning, to set five year goals. I'm guessing
one two five year goals or something like that. And
so now, as my sister taught me, she was an
(09:05):
elementary school teacher, and she said, you know, the best
thing I ever learned in my undergrad was that you
make something else the bad guy. I said, what do
you mean. She's like, well, the clock. So if everyone's
you know, the kids are racing against the clock to
get their spelling test done, you're not the bad guy.
As the teacher saying okay, we have five minutes left.
She says, you don't say that. You say the clock
only shows five minutes left. But in your world you're saying, hey,
(09:28):
you guys are not at working. These are your goals.
You set your goals, and managing you toward your goals
that you set How is that. How is that process
of using their own goals that they set help them
benchmarking its performance. How is that taking the strain out
of that discussion that might have been awkward otherwise.
Speaker 2 (09:46):
Oh, it really has almost eliminated it because you're ultimately
you know what, You're right. It's not the coach coming
in and saying, hey, this is what you need to do.
Speaker 1 (09:55):
No.
Speaker 2 (09:55):
No, the coach is coming in saying, hey, this is
what you said you want to do. I'm here to
help you achieve those goals. Let's look at right, let's
look at how.
Speaker 3 (10:03):
You're doing now.
Speaker 2 (10:04):
I will also say we do assess for fit, and
we do that now early on too, and we've learned
that as well the hard way, you know, by bringing
some people in and sometimes you know what we all
in development, you know, make mistakes or maybe just maybe
you have you're a bit desperate and you need to
get someone into a market. Right, Sometimes that happens, it's
(10:24):
a resale, and so we allow that, even though that's
not the best thing to do. And so then what
we do is now we have a process where we
look at six months, twelve months, in two years, and
we assess for fit and we make very very specific.
Speaker 3 (10:39):
It's all documented, it's all discussed.
Speaker 2 (10:42):
But it's always the conversation is about, you know, how
they're doing in terms of how they want to be
doing and what their goals are to achieve that, and
if they're not meeting that and they're not reaching it,
then hey, maybe this isn't a good fit for whatever
the reason. Maybe, And then it's making them see that.
Speaker 3 (11:00):
So then it's not mess saying hey again, you know
it's you. It's this.
Speaker 2 (11:03):
It's like, hey, think about it, take a look at
the big picture, and you tell me what you where
you think you should be at this point?
Speaker 3 (11:11):
Right?
Speaker 1 (11:11):
Yeah? And now your team, you fill your FPCs. Their
focus is how do I help you attain your goals?
What resources can I do? What training can I do?
How can I help your office staff perform better? Rather
than what a lot of the industry does, which is
we're going to audit you, right, and love's a good audit,
you know, and then after the audit, I'm going to
tell you everything you're doing wrong. Whoa like, no wonder
(11:33):
people hate being added and no wonder there's that natural
inks right, and a lot of brands because rather than
looking toward the positive outcome and managing toward that. It's
we're going to it's almost punitive. It feels punitive all
the time. And that's that creates a really angsty relationship
between home office and franchise owners sometimes, doesn't it.
Speaker 3 (11:52):
Absolutely?
Speaker 2 (11:52):
And and the other thing we focus on too is
we really we have four pillars in our business, so performance, engagement,
and compliance and satisfaction.
Speaker 3 (12:02):
Okay, And so when we go out.
Speaker 2 (12:04):
To do these meetings, one thing we do is we
have like a it's like a scale one to five,
and in each area we have a few key points
and we ask them to assess themselves and then on
our side, we assess them as well. And then we
meet and we discuss it and we say, Okay, how
do you think you're doing, and here's how we see
(12:24):
you're doing. And most of the time some of it
is subjective, but a lot of times you can also
bring in.
Speaker 3 (12:30):
The metrics and the actual data.
Speaker 2 (12:32):
And so that also speaks to it as well, because
sometimes and I love this and I say it all
the time, perception is not always reality. Because sometimes you
have a franchisee who really thinks they're doing well and
maybe in their minds they are, but when you look
at the data and you look at really the key
metrics of how.
Speaker 3 (12:50):
They're performing, they're really not performing that well.
Speaker 2 (12:54):
You know. So all these things I help, I think,
help to change that conversation to make it positive and
make them kind of take a step back and look
at themselves.
Speaker 3 (13:04):
Do some self reflection.
Speaker 2 (13:06):
So then it's them seeing the bigger picture and not
us saying, hey, you know you're.
Speaker 3 (13:10):
Not doing this.
Speaker 2 (13:11):
It's like, okay, here, just look at look at the information,
and you assess how you're doing.
Speaker 1 (13:16):
Right, Yeah, the best, the best. They don't want to
listen to anyone else often, and that's the normal human
response with our own team members. Sometimes we'll do this,
but not often. It's usually when okay, something's not going
well here, let's us say, it's kind of do you
guys use us at all in the way you guys operate? Well?
If they have a process like this in the US,
(13:37):
where you you evaluate, like here are core values, how
would you rate yourself or you have one hundred percent complying?
Are you most of the time complying or you're struggling
with this one? And we and but we have the
manager and the team member do their own assessment, and
where you see the gaps is usually where you need
to spend some time to discuss because if the owner
the manager says, hey, you're really struggling, and they're like,
(13:58):
I'm killing it, then so sometimes you have to zero
and say do you understand what this key, what this
core value means and how you should be implementing it.
And that's that's a meaningful discussion every time. And then
you say that, I.
Speaker 3 (14:12):
Think all these things help.
Speaker 2 (14:13):
And and the other thing I will say that I've
noticed is, yes, definitely a better relationship with our coaches
and our franchisees.
Speaker 3 (14:22):
The other thing I will tell you for one percent
sure is.
Speaker 2 (14:26):
When we go out to our company meetings, our seminars,
our regional meetings, and our big national convention. Now we
find people are you know, wanting to be winners, and
they want to be with the winners. And if you're
not on board and you're not doing the things you
need to do to be successful, you see those people
kind of on the on the outskirts. You know, those
(14:46):
people that were kind of kicking back a bit, or
are kicking back a bit, they're kind of you know,
they're gonna they're gonna feel that and they're going to
want to move on anyways, because the bulk and majority
of our friends esse that winning attitude, and they do
they are striving to meet those goals, right because we're
constantly talking about them.
Speaker 1 (15:08):
Yeah, that makes a huge difference, and it's I think
people undervalue the impact of managing the culture of the
franchise owners that way. Like if you have a bunch
of people that are fat and happy and that are
kind of inert because they don't want to change anything
you're trying to roll out in new programs, you get
nothing but resistance. But if the majority are focused on
(15:29):
growing and trying to win and trying to scale, they're
going to be deploying those things at eager for new ideas.
And then the other folks, as you said, they start
to feel like outsiders, and not that you want them.
I mean you want to tip the hat like, hey,
you've been here for twenty five years, Bob, like we
really appreciate you. And perhaps it's a good time for
(15:49):
exit planning. If you don't feel like you fit in anymore,
you don't want to put in the effort to invest
in the strategies no problem, like there's an easy answer here.
Speaker 2 (15:57):
Yeah, And that's a good point to you, because you know,
we did a lot of research and we looked at
kind of when was that peak point where we felt
that a franchise e was, you know, kicking back feeling
kind of fat and happy, like you said, And for us,
it's about the twelve twelve year mark. So so I mean,
we're happy to keep anyone in our system as long
(16:18):
as they are looking to grow and be successful. And
I mean that's factoring some of some events that happen
in life, of course. But if we have a franchise
e that is all in and they're given that they're
all and they're working on goals and being successful, then
that's all we're looking for. But that's why I think,
you know, back in the day, we had much longer
(16:39):
terms on our franchise agreement, and now we've made it
five years. Used to be ten years with some consecutive
ornewal terms, and we don't do that any longer because
you know, again, I think that's setting that tone of
what type of franchise we want to have as part
of our system.
Speaker 1 (16:57):
Yeah, I love that. Well, let's talk about these so
now you have a conversation. Right, Let's say you sit
down with an owner. They've been there for fifteen years,
they've been there for ten years, it doesn't matter, and
you start to see that they're plateauing. How have you
guys found what's the best way to approach that conversation
with dignity? And because I can see how some of
(17:18):
them might get offended, I'm sure the naysayers like, we'll say, oh,
but that's going to hurt their feelings, doesn't have to. Clearly,
you guys have a good process in place, But how
have you found that you maneuver around that with care
and delicacy so you don't hurt people's feelings when you say,
I think it might be time to evaluate a positive exit,
how do you guys do?
Speaker 3 (17:38):
Well, well, sorry about that.
Speaker 2 (17:40):
Ultimately, we have our franchise coaches do have really strong
relationships with our franchisees and there is a level of
trust there and so they are able to have these
conversations because our franchisees will say that we do care
about them, and that is one of our core values
(18:02):
is caring, and it is one of our five core values.
Speaker 3 (18:06):
We do care about them and we want to see
them happy and we want them to be successful. And
I can say that about every single one and I
bring them in and I mean that.
Speaker 2 (18:15):
And so you know, when we go to have these conversations,
we do look at the business value. We do look
at the profit they're taking home. We want them to
be profitable. That's why we look at their p and
ls every single year. And so if they're starting to
be stagnant or decline I mean over a quarter or
a couple of quarters, you know.
Speaker 3 (18:35):
What, people have lives, they live lives. Things can happen.
Speaker 2 (18:38):
But if we see that it's hitting the third quarter
and it's not just due to some situation that's happening,
then we're going to step in and we're going to say, hey,
you know, we've got to talk about this because a
you are losing business value, you're losing profit, and we're
losing market share.
Speaker 3 (18:57):
This is a partnership. It should be win win, right,
and we.
Speaker 2 (19:01):
Care about you and we care about your business and
we want you to exit, you know, making money and
with a great business value.
Speaker 3 (19:10):
So at that point, usually we'll look at doing.
Speaker 2 (19:13):
Some type of performance improvement plan where we really focus
on the key areas of the business that they have
to change or improve upon so that they can get growth,
and we timeline it.
Speaker 3 (19:26):
And you know, because ultimately, if they continue.
Speaker 2 (19:29):
To decline and when we talk to them about this,
then that's not doing anybody any favors. Right, we want
them again to be profitable and to exit with lots
of money in their pocket. So I think it's the
approach that we take because it's not just about us. Yeah,
we want our market share, and of course we're very
honest about that, and the.
Speaker 3 (19:48):
More money they make, the more money we make. I mean,
that's franchising.
Speaker 2 (19:52):
So but ultimately it's about them too, you know, it's
about their profit and their business value. So when we
put it like that, usually most franchises are most people
they can appreciate that and understand it. And you know,
we're saying, like, you don't want to continue to build
like this, you know. Yeah, And so that's kind of
how we.
Speaker 3 (20:12):
Frame it and it seems to work really well.
Speaker 1 (20:15):
Yeah. I love that. And I'm guessing sometimes Fiona, you
guys have a conversation with somebody who they don't want
to sell or maybe they do. Well, let's say you
have this conversation is, hey, you're plateauing. There's been a
couple of quarters. Now maybe it's time to evaluate, you know,
getting things back on track with a plan, or time
to exit. When somebody says I'm happy the way I
(20:38):
am and I'm going to ride my contract out for
the next four years. I just renewed it. Like, how
do you approach working with them? Because that one feels
like it'd be the most awkward one I think to
talk to about.
Speaker 2 (20:49):
This, Yeah, for sure, And we do have that, you know,
in fact, to have someone right now recently who is
just not in a great place and he doesn't want
to sell.
Speaker 3 (20:58):
He loves his babe.
Speaker 2 (21:00):
As he calls it, and he's fairly new to the system,
and to be honest, it hasn't been the greatest fit.
Speaker 3 (21:05):
So you know, I've been.
Speaker 2 (21:07):
Talking to him a lot. And then now what we're
doing is we're just presenting our data. We're doing some
mystery shopping. So we're saying, you know, are you active
in the business, are you doing the things you need
to do to be successful to grow the business, And
so we're looking at very specific criteria to measure against.
We're looking at his business plan, we're tracking his weekly sales.
(21:29):
We're talking about the number of customer or clients editions,
how many cancelations. He's having so key metrics within the
business that you know, if you're going to be in
this business. Another one of our core values is being
all in. If he's not in, he's not in alignment
with our core values. And so I think it's putting
everything on the table to say here, here's everything you know.
Speaker 3 (21:50):
How are you doing? Like, do you think that.
Speaker 2 (21:53):
You're doing everything you need to be successful? Is this working?
Is this a win win partnership?
Speaker 1 (22:00):
Yeah? And I'm guessing it's pretty obvious when you use
an objective data right to have that conversation. How do
you how do you help people see the value of
planning for an exit at that point if you're like
culture fit, not going to be it's not it's not
working there, they don't align with their core values, or
(22:21):
they just aren't they'ren't ready, they're not in growth mode anymore.
They want they really are. Frankly, they're already emotionally exiting
right before they physically exit, So how do you help
coach people into that phase?
Speaker 2 (22:33):
So ultimately, again, I think it comes down to looking
at that business value and saying, Okay, here's what your
business is worth today. If you keep going on this trajectory, Okay,
your business is worth X amount today and it's going
to be worth x amount less in three months from now,
X months you know x an amount last and six
months from now. So so where do you want to be?
(22:55):
And it could take you six months to a year
to sell, So so think about that. You know, if
you don't get that business listed now, then you could
be looking at very little, you know, walking away with
much less than it's worth. So we have those conversations
and sometimes when you say it in that regard, then
they sit back and they look and you know, the
(23:15):
best predictor of future is kind.
Speaker 3 (23:17):
Of past performance, right, not always, but.
Speaker 2 (23:21):
In a lot of cases, and certainly in these situations
I find, and especially.
Speaker 3 (23:26):
If it's been on a continual decline. So you can
kind of explain that.
Speaker 2 (23:30):
And I mean, unless someone really is just so headstrong
and not seeing it, most.
Speaker 3 (23:35):
Of the time, they can understand it. And money talks.
Speaker 2 (23:39):
People, right, Like, you invest all that money, you want
to walk out with at least what you invest in.
Speaker 1 (23:45):
Hopefully two three X depends on how long you're going
to be in at maybe ten x twenty x. But
when you first started doing it, where your owners surprised
to understand how much their business was worth in a
good and a bad way.
Speaker 2 (24:00):
Okay, they a lot of them were really surprised, especially
in some cases really surprised at how much it wasn't worth.
Speaker 1 (24:10):
I was going to ask, how, I'm guessing it goes
both ways. But more often than not, did you find
they were overvaluing their business?
Speaker 3 (24:17):
They were.
Speaker 2 (24:18):
They definitely were, especially the ones that were long term.
They really thought their businesses were worth so much more.
And so then when we put it out to them.
And that's another thing that we started doing too, which
I didn't mention, is once a year at one of
our seminars, I get up and I do a whole presentation.
It's not usually not that long, like forty minutes, and
(24:39):
I talk about business valuation. I talk about you know
when someone goes out to buy a house and you
have this beauty, like two houses exactly the same, but
one is beautifully manicured and well kept and you know everything,
and then the other one is dilapidated, they haven't painted it,
and all those types of things, but which business is going.
Speaker 3 (24:57):
To sell and sell for more? Right?
Speaker 2 (24:59):
So f client standard, you got to look at those
two things. So I talk about that, and then I
talk about business value and the importance of that right
and kind of you know, from an account's perspective, how
they evaluate, from you know, a service industry perspective, how
you valuate. And then I say, okay, where are you today?
Are you growing, stagnant or declining? So I talk about
(25:20):
all of those things, how long it could take to
sell the business, and starting to think about that because
some businesses it can take two years to sell, right,
and so you want to make sure that you've got
an exit plan, so you're planning for that time as well.
Speaker 1 (25:34):
I love, I'm so glad you teach them that because
most people, especially in service businesses. You guys in some
regards could argue there's some recurrence, right because of subscriptions,
but it's still going to be a multiple VBA. Al right,
no one's giving you a top line multiple. You're not
a software company. So people generally don't understand that. I
didn't realize that. You know, you just you know stuff
and you just assume everybody knows it. But I was
(25:55):
talking to people like, oh, my business is worth this much.
I was shy and I just said, well, actually, I
don't think that's even close. And this is just a
friend I was talking to and he's like, what do
you mean. I said, well, your industry is going to be,
you know, just going to how your evaluation is going
to work, and you got to take a look to
see what it is. But you're probably going to have
like a I'm guessing a three to nine x depending
about your growth rate, your EBITDA margin, like all these things.
(26:17):
They're going to look at those and they're going to
give you a multiple of your EBADA. So if you've
been playing it close to the vest, you've been sucking
a lot of cash out of the business for personal
fund expenditures like that that company boat and that company
RV and your ibada's garbage, your multiple is going to
be terrible. Your business is worth seventy thousand dollars right now,
and they're like, and.
Speaker 2 (26:37):
We talk about that too. You know, if you're running
all these extra things through the business, and I've seen
some very interesting ones, then you know what, you got
to get a normalized statement. You've got to be able
to explain that you got to be able to show
your true profit.
Speaker 3 (26:50):
So I talk about all of those things.
Speaker 2 (26:52):
Or at least three years before you're going to sell,
like you plan to sell, make sure that you've got
those those financials right, make sure that chart of accounts
is accurate. Right, So we do talk about those things.
So we really try to keep all that top of mind.
And I guess it's not just by doing one thing,
which we've discussed here, it's by doing all of those
(27:13):
things right. And so the other thing is we did
bring in a standard chart of accounts and that was
a few years ago as well, and that's really help
franchises understand their profitability because we did have a problem
with that as well. You know, they really if you
said to a franchise e, how much money did you
make last year? You'd be like, oh, you know, I
(27:34):
don't know, I make I make good money. Well how
much how much money did you make?
Speaker 3 (27:39):
And they can tell you and I'm.
Speaker 2 (27:40):
Like, what you know? So so now we talk about
the standard chart of accounts, We talk about normalized journeys
and making sure you understand your true profit and what
does that look like, you know, and all those things
I think it's so essential as a business owner, and
sometimes we have we have people that come into our
system and they're just not as familiar with that side
(28:01):
of the business. They're fantastic franchisees. Oh you're wonderful people, great.
Speaker 3 (28:07):
Franchises, they're just not so great on the financial side.
Speaker 1 (28:10):
Yeah. Well, I'm glad you brought that up, because having
a standard chart of accounts is kind of critical, especially
if you're Adam nineteen. If you want to provide reliable,
consistent data. Sometimes you get those funky p and ls
back and you're like, I'm not sure how we can
report with any sort of accuracy or confidence in this
Adam nineteen and the FDD.
Speaker 3 (28:29):
In Canada, We're lucky we don't have the item nineteen.
Speaker 1 (28:32):
Yeah right, you're right now.
Speaker 3 (28:33):
Yeah, so that's okay.
Speaker 2 (28:35):
But having said that, what I always say to the
franchisees is, how are you going to explain, Like, we're
not explaining your profit and laws statement, your financial statement.
So unless you can pay your accountant to come out,
then you need to be able to explain, right, And
so that's what I talked to them about. You need
to understand this because when you do go to sell
your business, you need to make sure that you can
(28:57):
explain to the buyer.
Speaker 3 (28:59):
Exactly I'm much money.
Speaker 2 (29:00):
Because everybody says, I swear in almost all my conversations
that comes up in the first how much money am
I going to make?
Speaker 1 (29:06):
Fiona right, Well, it depends on you, really, how much
do you want to suck out of it? And yeah, well,
and you said someone a minute ago, I just want
to highlight and I know we probably better wrap up
after that. But this has been great, Honestly, I hope
everyone listening is taking note of ways that you can
approach this differently, especially maturing franchise systems where people are
(29:27):
starting to renew their contracts, and this is where you
really need to start paying attention. But you talked about
a three year window. We've glazed right over, so I'm
going to come back. You'd mentioned that your franchisees need
to understand, especially if they're thinking they're going to exit
sometime in the next five years. Anybody who might ever
look at their business, any business broker group who might
help them put it on the block and try to
(29:47):
help them sell it, they're going to require three years
of financials and those historical financials are how they're going
to derive the value of the business, both both stat
like current business and future business. And if you're on
a growth curve, this is why it's so important you're
growing when you're selling, because then you can have you
can you can show a trend line and you can
expect a buy rate that actually can reflect a future
(30:09):
value or future revenue line of the business. So but
if they don't start three years before, if they say
I want to sell my business this year, and then
they haven't had a clean chart of accounts, or they've
been you know, shuffling money through the business and personal
expenses running them as business expenses, like it makes the
P and L on the ebidolic bad, the net income bad.
So those are usually what you get a multiple on.
(30:31):
And I just I want to make sure we highlight
that for everybody that this process really needs to be
a constant dialogue like you guys have, so they can
be trained and ready and say, I think I want
to sell my business, so I'm cleaning up this year
because next year I want to start putting on the block.
So at least you got at least one full year
of good data to go up absolutely.
Speaker 2 (30:48):
And you know, I'll just add to that is that
the one thing is is people will not buy on potential.
You can say, you know, you can sell a franchise,
and this kills me when franchisees say, oh, but there's
so much potential in my market, Fiona, I know I'm declining,
but there's so much potential. But people don't buy our potential.
They want to see that growth trajectory, and that's when
(31:09):
you're going to get the higher multiple. That's when you're
going to get your big bang for your buck, right,
And so I always I always talk about that too,
because if you're declining year over year, then then the
buyers can you understand, oh, what's happening with this market?
Like is this a market I really want to go into?
Maybe this is not a good market form Molli made,
even though it probably is. We just have a you know,
(31:30):
a potential or a franchise who maybe has kicked back.
But you know, so those are some of the things
too that I think everybody has to remember. It's that
three year preer and you're right, you want to show stable,
steady growth, right, so that you can show there is
potential in my market and then have the clean financial
statements for sure.
Speaker 1 (31:48):
Yeah, I totally agree with you. You've been fantastic. I
know you've got to get going. What's the best way
for people to reach out to you if they want to,
they want to follow up and ask you questions and
maybe develop a similar program in their brand.
Speaker 2 (31:59):
Sure. Well I'm on LinkedIn, so you can look me up,
you honest giant and you know, or you can reach
out to me anytime and my email is F'stiant at
molliemad Dots, but probably LinkedIn would be the easiest way.
Speaker 1 (32:13):
Yeah, yeah, that sounds great. Well, you've been generous with
your time, and thanks again for making a point of
sharing some of these insights you guys have gained by
rolling out such a good program with you with your owners.
Thanks for that.
Speaker 3 (32:24):
Well, thank you. It was great to be here. I
really appreciate it.
Popular Podcasts
My Favorite Murder with Karen Kilgariff and Georgia Hardstark
My Favorite Murder is a true crime comedy podcast hosted by Karen Kilgariff and Georgia Hardstark. Each week, Karen and Georgia share compelling true crimes and hometown stories from friends and listeners. Since MFM launched in January of 2016, Karen and Georgia have shared their lifelong interest in true crime and have covered stories of infamous serial killers like the Night Stalker, mysterious cold cases, captivating cults, incredible survivor stories and important events from history like the Tulsa race massacre of 1921. My Favorite Murder is part of the Exactly Right podcast network that provides a platform for bold, creative voices to bring to life provocative, entertaining and relatable stories for audiences everywhere. The Exactly Right roster of podcasts covers a variety of topics including historic true crime, comedic interviews and news, science, pop culture and more. Podcasts on the network include Buried Bones with Kate Winkler Dawson and Paul Holes, That's Messed Up: An SVU Podcast, This Podcast Will Kill You, Bananas and more.
24/7 News: The Latest
The latest news in 4 minutes updated every hour, every day.
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com