Franchisee Buy-in was Key to Turnaround of Hardee’s, Carl’s Jr.

 

 

puzder

At IFA’s 53rd Annual Convention on Feb. 19, Andrew Puzder, CEO of CKE Restaurants, franchisor of the Hardee’s and Carl’s Jr. restaurant chains, told 3,600 attendees that getting buy-in for his unconventional approach to compete with larger restaurant change was a critical component of his turnaround strategy. It has been a guiding principle which has propelled the brands to 3,300 restaurants, with growth for ten consecutive years, including during the recession, and operations now in 28 countries.

Hc1w0QuB-1N1eeEzlqZBBT5U3_DGXlEwd36OG91VFTw

“We have a simple philosophy at CKE Restaurants:  If the franchisees make money, we all make money.  We believe we’re the most franchise friendly company around.  For over 10 years, we’ve had a Carl’s Jr. and a Hardee’s franchisee on our corporate Board of Directors,” said Puzder.

Puzder talked about how Hardee’s and Carl’s Jr. bucked the conventional wisdom in the early 2000’s with the rollout of the $6 burger for $3.99. The franchisees in the system were very concerned consumers wouldn’t pay $4 for a burger, particularly during a time when most restaurant chains were selling smaller burgers for less money.  Yet by testing the burger in a corporate store in California and demonstrating to the franchisees in the system that the product sold “off the charts,” the brand was able to roll it out nationwide.

“Being able to prove the concept in company owned markets and having the franchisees involved from the beginning were essential to making this product a success,” said Puzder.

The CKE advertising strategy also bucked the conventional wisdom. By involving franchisees in the decision-making process and explaining the rationale for targeting “Young, Hungry Guys” with famous models like Paris Hilton, the franchisees “generally, if reluctantly, went along”.

Puzder said their advertising strategy to compete with brands spending exponentially more dollars on television was to break through the clutter and generate earned media. The numbers and results speak for themselves. According to Puzder, a Kim Kardashian ad got 330 million earned media impressions, Kate Upton got over 1.5 billion in 210 countries and Nina Agdal is close to a billion.

Technology Summit focuses on Social, Local and Mobile technologies

 

FBphoto

500 attendees attended the Technology Summit, which focused on Social, Local and Mobile (SoLoMo) technologies Feb. 18 during IFA’s Annual Convention.  After hearing Jesse Dwyer, head of communication and global content strategy for Global Vertical Marketing at Facebook, the audience quickly realized that their success with SoLoMo is not all about the technology but about people and keeping them happy.  Happy customers will share your story.  Jeff Fromm, EVP & Author “Marketing to Millennials” of Barkley, Inc. reinforced this point through his research of millennials which shows many of their purchasing decisions are based on the recommendations from their peers.  Brian Little, Director of Corporate Communications of Krispy Kreme explain how they implemented their SoLoMo strategy, which every aspect had to embrace Krispy Kreme’s vision; “To touch and enhance lives through the joy that is Krispy Kreme.”  While technology is important, this summit show us that the decisions of what to implement and when should be based on one thing, people. The full presentation from the technology summit can be accessed through IFA convention mobile app.

IFA’s 53rd Annual Convention Rallies to Give Back

 

IFA_0254

More than 100 franchisees and franchise executives spent Saturday afternoon volunteering for the Saint Therese Center at the second annual Franchising Gives Back service project during IFA’s 53rd Annual Convention. The Las Vegas non-profit provides educational and social services to those affected by HIV/AIDS. The Center assists 3,500+ individuals affected by HIV/AIDS monthly. On any given day, Saint Therese’s Food Pantry can see up to 100 clients in need.

The participants prepared 2,000 hygiene kits and 1,000 boxes of food for the Center’s clients.  Father Joseph O’ Brien, Executive Director of Saint Therese and a Dominican priest for over 35 years, said the kits and boxes could serve the center’s clients for a month.  ”It’s wonderful to have companies here, it is wonderful what IFA is doing,” he said.

IFA’s incoming Chairman of the Board and Managing Director of Roark Capital, Steve Romaniello, was a driving force behind the creation of Franchising Gives Back, along with Roark colleague Geoff Hill. “We tout franchising’s impact through advocacy, but the bigger impact franchising has is through our franchisors and franchisees working every day in their local communities,” said Romaniello. Geoff Hill expressed his satisfaction in participating in the community service project, “this is a family and Franchising Gives Back gives us the chance to get to know each other in a different way. Giving is essential to the human spirit,” he said.

Joe Lindenmayer of TSS Photography echoed Romaniello and Hill’s sentiments. “This is what the franchise community should be doing. Our franchisees work in their communities every day and we should do the same.”

Brian Sommers of Jersey Mike’s Subs, which provided lunch for all participants, said, “It is great to see franchising’s CEO’s and leaders rolling up their sleeves and coming together.”

Father Joseph lauded IFA’s outreach, “you are helping an amazing group of people. Thank you so much for being here.” Saint Therese serves over 5,000 men, women and children including 876 HIV positive clients under 18 with a staff that is itself 95 percent HIV-positive.  The Center has been in existence for 15 years and is the only pantry focused on HIV in the region. Jacob Murdock from the United Way of Southern Nevada, which coordinated the event, said, “This means so much to United Way and so much to Las Vegas.”

“The franchise industry is committed to serving the communities that support us,” said IFA President & CEO Steve Caldeira. “Franchising Gives Back is a natural extension of the work our industry does in their local communities every day.”

Click here to view IFA’s Franchising Gives Back photo album!

The Time is Now: Start Preparing for the Employer Mandate

This time next year, the major provisions of the Affordable Care Act, including the individual and employer mandates, will be in full effect.  Even earlier, in October of this year, the first Health Insurance Marketplaces will open.  2014 will see tax hikes, regulations, paperwork, and headaches for franchise small business owners across the country.

The 2013 IFA Convention in Las Vegas will feature a session entitled “The Health Care Law and Your Business: What You Need to Know.”    Hear the perspective of a multi-unit franchisee, a health care policy expert, and a veteran insurance broker in a terrific panel that will explore the ACA’s impact on franchising, the most newest health care regulations, and how franchise owners can prepare for 2014.

ConventionGraphic_insider

To expand its education efforts surrounding the ACA, IFA is offering to help franchise companies host webinars on ACA employer requirements for franchisees and other stakeholders.  These hour-long sessions include information on key definitions, tax penalties, communications strategies and other topics as well as a Q&A session with a health care expert from Washington Council Ernst & Young.  For more information on this member service, please contact IFA’s Kevin Serafino at kserafino@franchise.org.

Franchises on Facebook

Facebook is in the news again for new functionality letting businesses use CRM email addresses to target customers with hyper-relevant ads. It got me thinking about Facebook and an Interesting story from Todd Leiser examining the most “Liked” franchises on Facebook.

Todd analyzed Franchised Brands’ relative rank in Facebook “Likes” compared to their overall size, based on world-wide sales and then tracked their growth over the course of several months during the summer.

He touches on the leaders like McDonald’s, Subway, Taco Bell, Buffalo Wild Wings and Pizza Hut but what was interesting was the growth of several brands:

  • KFC  — Gained 818,000 “likes” (+35.9%)
  • IHop –= Gained 581,826 “likes” (+33.3%)
  • Sonic — Gained 496,962 “likes” (+33.4%)
  • Applebees — Gained 592,000 “likes” (+23.7%)
  • Red Robin added 164,985 new “likes”, an increase of 44.1%

You can read the full story here. Todd has offered to make the complete research data available. He’ll also be presenting the information in Las Vegas at IFA’s 53rd Annual Convention during the ICFE Special Session on Social Media & Franchising