Jon Taffer's Complete Guide to Franchising

23:39How many people do you have? How active are they? What are the franchisees received? Do we get quarterly promotions? I want to understand. I'd love to see the promotions. I'd love to see the last package that you sent to franchisees. Show me everything that you're going to do for me to build my revenue.

23:58Jason:Show me everything you're going to do for me to build my revenue. You can just say that to a franchisor. Absolutely. And he's going to say, look, I can't guarantee anything, of course, but I have seven people in my marketing department. You're going to get promotions to choose from every quarter. Here's an example of some of them. They're going to be calling you every week to check in on your spend and your revenues. If there's any issues, these are the things that we do to flag them. And they should have answers and they should talk sales, not just operations. I mean, this must be something, you know, you're thinking about all the time in building Taffer's Tavern.

24:33Jason:If somebody asks you that question, you're going to have a hell of an answer. Well, and I'm a promoter by heart. You know, it's funny, all my friends that I would say, what do you do for a living? And I said, what do you think I do? They say, you're a promoter at Taffer, you promote. And I guess in a sense, but I've always been a revenue oriented guy. As you know, Jason, we've been working together a long time, buddy. I'm always, I think that revenue cures everything. Revenue cures employee turnover. Revenue cures expense issues. Revenue cures it also. I'm very revenue oriented, but I got to tell you, if you sign a franchise with a revenue oriented company, talk about mitigating risk.

25:07That's a big plank in that risk mitigation. Right, right.

25:12Jason:Right. So what I love this answer and I love thinking about sales orientation, marketing orientation. What else should somebody be thinking about when they're let's say they've let's say they've, John, picked some direction. It could be the way that you are right now with with with like pet boarding, doggy, doggy daycare. I know the category that I want, but I'm not sure the brand. Or maybe they've started to investigate a particular brand and they're not sure they should make the next step. What else should they be thinking about that maybe they're not going to run into in the average advice article?

25:50I would go through probably a six or seven step process. I would start with revenue because if the revenue stuff doesn't feel right, I'm not sure anything else really matters. I would be very cautious about moving forward. but from revenue i would actually go through the process of my mind explain to me how your real estate support works i like to know how you procure the sites and what do you do to test out my real estate do you do demographic reports explain that process to me of how we choose a location together and then from there i would move right into my costs you know cost of development, time of development, because time is money.

26:32The longer it takes you to build it, in many cases, you're paying rent for some of those months. So every month matters. And then we would move into how do you open and train me? And what is the process involved in that? And what if after that first week, I'm not comfortable? Are you going to charge me to stay longer? I want to understand that process. And now that we're opening, what grand opening support are you going to give me? Are you going to buy a billboard in my town? Are you going to put me on some radio? How are you going to help me open and build my store? And I think if you walk through those five or six questions and compare them to the different franchisors, you're going to get different types of answers.

27:10And you'll see, this one seems to have a hole in real estate, but man, their marketing is strong. Somebody else, Jimmy John's comes to mind. Think about Freaky Fast and how they did their initial graphics and their marketing. And they did an excellent job branding themselves and their point of differences in the early days of their company. And it lasted. Yeah.

27:33Jason:What is the line? This is inspired by that question you just asked. What is the line between what a franchisee should expect from the franchisor and what they shouldn't? Because everything that you just said there is excellent and valuable and specific, but it all comes from a place of, hey, how are you going to help me succeed? But of course, there's a line here. The franchisor is not ultimately running the business. A franchisee of Taffer's Tavern is not expecting John Taffer to run that business. They got to run that business. So what is the line between what people should expect from the franchise and what they're going to need to be doing themselves?

28:18I think what you said is very astute. It's their business. They have to get up in the morning and make sure it's clean, make sure that if it's a phone-based business, that the phone connections are connective and reactive and all of those quality elements. That's all on you. We're just going to tell you what to do, but you're the guy who's got to do it. The issue then becomes, are you the right guy to do it? And I think when we sell Taffer's Tavern franchises, I like to go dark. What I mean by that is, Jason, you know, there are days you're going to be there at two in the morning doing inventory.

28:56You're going to have some 12-hour days, man. There's going to be a dishwasher. You're going to be running the dishwasher machine. I mean, these are just the kind of things that happen. But there is a rainbow to that hard work. But if this is your passion, if you really want to do this, you've got to go dark on them. You've got to go a little negative as a franchisor when you sell them. And I think that's very important.

29:20Jason:Because you want to see, is this person actually going to be committed to running this? Or does this person think that this is just free money? Yeah. In my case, you know, there's a brand risk anytime a store closes, right? So you want to change those people very carefully. You know, it's interesting, Jason. Every year, a franchisor gets an audit. And they audit my financials. And they make sure I have the financial resources to continue. And before I start, I have to have a certain amount of money. And I have to put up bonds in certain states. And, you know, there are these certain economic requirements that's required.

29:52But nowhere does it say you have to have a marketing department. Nowhere does it say, really, nowhere does it say you even have to have a training department. So these things aren't regulated. Some franchisors just come into it with a focus. I'm an ops guy. You know, I'm a revenue guy. You know, they're different. And I think the challenge for the new potential franchisee is to understand those differences. That's why I think those four or five questions we talked about a few minutes ago is so important because they characterize those differences.

30:27Jason:Yeah. I think it'd be interesting to hear this from a franchisor perspective. So could you just articulate who you're looking for as a Taffer's Tavern franchisee? Yeah. Committed integrity. committed integrity you know taffers tavern isn't a banquet operation with 6 000 menu items and and you know wedding cakes and all that we're we're a tight restaurant operation our kitchen is tight i don't have to have an experienced restaurant guy but i do like experienced customer service people people that are in the human connectivity and that get that part of the business you know how important that is to me in our years of talking.

31:08Absolutely. And I think that's the most important part is, and we've talked about human resources, you know, to me, the resume isn't as important as the personality and the profile of that individual. If they really care, if they really say to themselves, I'm going there every day to make people smile, that's important to me. I want to make people smile. That's my guy. And if he's going to work hard to create those smiles because that's how I thought when I was young. I wanted to make people smile every day. I thought that was my business, was to make people smile every day. So that became my objective.

31:41I got hooked by that and been in a business ever since. So I think you look for those kind of connectivity traits that fit within your business. Now, if you're selling accounting services, that might be a very different scenario. Somebody who has a lot of patience, somebody who's detail-oriented. Somebody, of course, the characteristics start to become very different. But it's up for the franchisor to understand those characteristics, not necessarily you. That's why that integrity is so important in the franchisor. But let me say, most franchisors do not want to sell you a franchise if they think you're going to fail.

32:16They don't. It's not what this is about. They don't want your$50 ,000 upfront fee. That's nothing in the overall picture. the brand blemish of a closing is far more impactful than any revenue benefit of a single store could ever be. So unless they're a franchisor with a very short term goal, I'm going to bring in revenue and sell with some mentality like that. They are pretty smart at protecting future stores. Some are more protective than others. Right.

32:45Jason:Let's go back to your answer about marketing because I'm curious what you think smart franchises should be doing now in marketing. We're in an ever-changing attention economy. It is in many ways easier and harder to reach people all the time, right? Digital makes it easy, but it also lowers the barrier to entry. It is a noisy world out there. So I'm curious what you look for in great franchise marketing, or maybe even the things that you're thinking about over at Taffer's Tavern about how to make sure that you're effectively marketing right now. I think the most perfect franchise marketing that I've seen in the past few years, and you're going to smile when I say it, was the Dorito Taco Bell.

33:37That's right.

33:38Jason:Doritos Tacos Locos or whatever it's called. Think of the brilliance of taking a beloved product like Doritos, bringing it into that taco, and sales exploded for them, went up over 30%. I mean, that is brilliant. You know, in Chicago, there are car dealers named Selozian Edelson, and they used to do co-commercials with a pizza guy. And they'd stand in the Ford dealership, and they'd say, Selozian Edelson, we always get more pepperoni. And I mean, sometimes you can build a program with a co-promoter and build to their brand equity and such. You know, as a restaurateur, I used to run spots and I would do this thing with car dealerships.

34:20Come test drive before and you get a free lunch at Taffer's Tavern. Lunch cost me$4 for free, my cost. But they would run 60 spots a day saying lunch at Taffer's Tavern, lunch at Taffer's Tavern. So there's a lot of ways that you can flex the resources around you in unconventional ways. But the most powerful thing that you said to me and wanted to go was noise. It is noisy out there. And somehow, not everybody can say, oh, this is going to go viral. This is going to go viral. I don't think you or I, with all our experience, can choose what's going to go viral ahead of time. Not at all. That's a roll of the dice.

34:58So I think affiliating with other brands is very, very smart. I think leveraging on co-sponsors, people like your soda vendors, your suppliers can also be very meaningful. But we have to stand out in a crowd. Content is important today. Imaging is important today. But the most important thing you can do is, in my view, have a five-word mission. Pound it. Pound it. Pound it. Pound it. Because marketing communication without identity doesn't serve you well. Marketing communication without a call to action doesn't serve you well. And marketing communication that doesn't create some anticipation of what I'm going to get doesn't serve you well.

35:40So if messaging always has those three elements in it, integrity, this is why you want to come, and this is what you can expect. If you always pound that messaging specific to your business, of course, then the message starts to break through all that noise. But if every day the content is different than the message is different, that's the big mistake we make. It never pounds through the same word. Oh, look at me with shut it down. I've said it down so many times. I actually trademarked it, Jason, but it's repetition.

36:15Jason:I got I guess for those just listening, I just I just went off camera for a second and grabbed the shut it down button that sits on my bookshelf right next to where I record. Oh, yeah, I've got it. My kid loves this thing. But how did that happen for me? Repetition. So understand that messaging has to be pounded and pounded and pounded. So changing it each day and changing. Today, I'm going to talk about lunch. Tomorrow, I'm going to talk about this. Next day. No, pound it, man. Pound it and watch it crack through that way. Sure, do it in different ways. Try to make it entertaining, but don't change the message day to day.

36:50Keep it the same and pound it. And that's how you brand yourself. Bouncing around isn't branding. You said five words?

37:00Jason:I like to say five words. Five to seven words, yeah. Five to seven words. In other words, just keep it so tight and focused that it's unmistakable what this is. A bar is a bar, but a tavern has soul. That's ours for Tapper's Tavern. Say it again? A bar is a bar, but a tavern has soul. It's a great line. it creates a perception. Now you say to yourself, boy, I'm curious, what does he mean by that? And there's only one way you satisfy that curiosity, right? Which is that you go in, which is not any different from the example that you just gave about the partnership with the car dealership, right?

37:40Jason:Which is, okay, lunch costs you$4, but you got that person in the door. And once you got them in the door, you can show them a good experience. And you have a science behind what it's going to take to get them to come back. But what you want most of all is what's going to get somebody to pay attention to you long enough to be able to recognize the quality of your offering. Yes. Yes. So how much of that should rely upon the franchisee? I mean, if we're talking to people right now who are considering buying a franchise, you know i think if i'm listening to the answer that you just gave through that lens i bet that people might be confused okay well what parts of this are going to be the franchise or what parts of this is going to be the franchise the franchisor is clearly going to come up with the tagline for the company i'm not coming up with taglines for the company but am i the person who's going to make the relationship with the car dealership down the street how are people supposed to think about what marketing is theirs and what marketing is the is the kind of parent brands?

38:45You know, typically the store is responsible for what we call local store marketing, LSM. And you as the franchisee, you're responsible for your local store marketing. So me as an experienced consultant, I'm going to tell you, Jason, I want you to put all that money within about four or five blocks of your store. Own that neighborhood. Because the fact of the matter is 80 % of your business is going to come from four or five blocks away. It's not going to come from the other side of town.

39:10Jason:So you invest that money in the four or five blocks local store marketing and you're responsible for that local store marketing i as the franchisor i'm not going to put flyers in the mailboxes of your neighborhood but i'm going to provide a national presence i'm going to provide advertising at 30 50 000 feet i'm going to provide you with all the promotions that you need during the course of the year and i'm going to give you a lot of suggested local store marketing programs for you and teach you how to do local store marketing but it's still yours to execute. And we do things like we'll take a couple of servers, we'll pay them a salary, and 10 hours a week, they'll be out in the marketplace.

39:51And we'll do certain things like that to create awareness in the market. Oh, that's interesting. What are they doing out in the marketplace? Oh, they might be just stopping in the stores, developing promotional relationships. Sometimes we do food drops. Hooters was famous for that. They'd send five Hooters girl over and do a wing drop with 300 wings in an office building.

40:11Jason:That'll bring people in. Yep. But yeah, do things like that. It's amazing what happens when you ask people to come to your business. And walking in and asking them to come to your business creates surprising results. It blew me away when somebody said that to me years ago. Ask them. So I send my team out to ask them. They work for me eight hours a day. They're out there 16 hours a day. Here's another little thing that I did. We did this with Wolfgang Puck Express years ago. I like to give my employees business cards. And I like them to be proud of where they work. Now, if they're proud to work for John Taffer's bar, and then they love our food, and they would invite their mother to Taffer's Tavern for their birthday, then they are now ambassadors for my business, aren't they?

40:59Jason:Yeah. Love where they work. They love me. They love our food. Give them business cards. Give them something to say, boy, stop by, stop by and see me, stop by and see me and have them be part of your marketing. And I find that a good restaurant that has employees that enjoy working there are eager to do those kinds of things to help fill it up. John, finally, I'd love to zoom out. And I'm just curious, you're watching this industry like nobody else. What's been particularly exciting or surprising to you, whether it's the rise of a certain kind of franchise category or just a shift in the way the space is operating.

41:41Jason:I'm curious what, to you, rises to the level of new and different and interesting. You know, I think that most of the new franchises that I find exciting tend to be in the technology space, a great many, of course, as you and I both know. But, you know, in the restaurant space, Right now, there's smaller models. You know, Taffer's Tavern started as a 5 ,000 to 6 ,000 square foot franchise. It's now 2 ,500 feet. So the sales per foot is like 40 % higher and a return is much greater, easier to operate. We don't open for lunch very often now. So we open at 4 in the afternoon, which creates no second shift during the day.

42:20So I think these are the kind of ways you want to look at. I believe that any business that's open seven days a week can probably do the same revenue six days a week. So look at the business model and see to yourself, you know, where are those stress points and where are those opportunities?

42:38Jason:Right. So it's a question of what's interesting to you is how is the consumer behavior shifting? And therefore, how can I better operationalize my model to take the most advantage of that? Yeah. Also, you know, in today's world of delivery, you know, I always find it amazing to me. And I got to tell you, if my wife stopped ordering from Amazon, I think the CEO would knock on my front door. But it's amazing how many boxes I get from companies that contain no promotional materials. And my restaurants, even when we mail checks out, there's a promotional piece in that envelope, either a coupon. or it's amazing to me that we would do any outgoing communications of any type and not attach something promotional on it.

43:26That's amazing to me. And it's a real shortfall that Amazon has not having their sellers take advantage of those types of opportunities.

43:35Jason:Yeah. And I've heard that from small business owners that they would, they'd like to be able to, you know what it reminds me of this isn't franchising, but I'm just going to tell you, cause I think you'll like it. So I have a friend whose name is Kim and she's got a company called Soberish. The tagline is the buzz without the booze. And if you order from Soberish, and I do because she makes like a sleep product that I use all the time, it will come with this slip of paper with photos of the three people that do her packaging and a little bit about them and then a little checkbox of which one of these three people actually put the product in your envelope and put it out into the mail.

44:14Jason:And then they write a little thing at the bottom of it. And the first time I got it, I felt it totally changed the experience of it. Yeah, this didn't, you know, nobody thinks about how a product makes it into the package. You sort of, I mean, you know, somebody did it, but you just sort of think of it as happening this automated thing. But it created this little reminder that this was a personal experience, that somebody noticed my order, that they cared about my order, that there's a human being on the other side of it. I love that little thing. It's just a piece of paper that they put in the envelope and it mattered.

44:48Powerful. Let me give it to you in restaurant sense. When I was running my Hooters, I would have my servers write their name on a beverage napkin and put it in the middle of the table. Hi, my name's Kathy.

45:02Their sale, their tips went up 8%. Wow. So interesting. It created connectivity. Right. Just like it personalizes it. I'm not a server. I'm Kathy.

45:14Jason:Right. Right. And you got to do well by Kathy. It's funny because people come at a restaurant and they'll introduce themselves at the very beginning. Right. I'm Kathy. I'm going to be taking care of you. And then the second Kathy walks away, you have forgotten her name. And now she's just back to being the interchangeable server for you for that evening. So by personalizing it. And I loved, John, that you guys then tracked the tips so that you could see what was the result of this little experiment. Yeah. And the team loved tracking it. And it was a great experiment together. And I bet a lot of them still do it to this day.

45:47But personalizing something and creating that connectivity is you're a customer forever with an action like that. Yeah. You know what's interesting? Jason, stay on topic for a second. I've watched a lot of the videos of the Europeans who came to America for the World Cup, as I'm sure you have. It's very heartwarming to see how much they loved our country and how much they loved Americans and how warm and friendly and how wonderful our hospitality was and everything. But I found it interesting. Almost every one of those videos that they're raving about is a franchised business. That's interesting.

46:22I didn't notice that. What do you think that's about? Well, it just shows that these brands have a presence and their consistency of delivery creates a reputation. And there's the proof. They didn't go to John's Steakhouse. They went to the Longhorn Steakhouse. So the Lone Star. And they reacted to these brands as we do as consumers. But I got a real kick out of it to see how many of them were franchised brands.

46:47Jason:That's so funny. You got to believe that the franchisors of those brands were starting to see international franchising opportunity in every one of those videos. Absolutely. I wish I had to dress in franchise for Europe.

47:04Jason:John, you and I are going to be talking franchising, not just this time, but you are going to become a regular presence in Entrepreneur Magazine talking about franchising. So this will not be the only conversation that we have. But let me wrap it this one with this question, which is number one, two parter, which is just number one. If any, you know, we've talked about Taffer's Tavern. I'm, you know, if anybody has been listening to this and thinking, hey, I think I would enjoy being a Taffer's Tavern franchise franchisee. What should they do? But then two is maybe just for someone who's just thinking about taking a next step in franchising.

47:41Jason:What should you suggest they do? Well, it costs nothing to do research. If you're thinking of it, I would reach out to one of these companies, ask them the questions that we talked about, your sales team, your real estate support, your construction support, etc. Start to understand, either you'll start to feel warm and fuzzy about it, maybe fears will grow, but go out and stick your toe in the water. Talk with them. It's completely free. They're happy to spend the time with you. And many prospects that they speak to don't buy, so don't feel guilty about it. Maybe you will buy. You don't know. Pick one.

48:17See how it feels to go through that process and to understand what they do, what you have to do. And also, I add one thought that we didn't mention earlier, which is time. You know, a franchise gets you open pretty quick. Time is money. So for many people that are leaving a job and going to open another business, Being able to open that business four or five months sooner and create cash flow a little sooner could be a big deal as well. I just want to mention that. But I would go to a franchisor, spend some time, go through the process a little bit and see how you feel. I'm going to guess that a good franchisor is going to make you feel comfortable with what they provide, what their support is and help you mitigate that risk in your own mind.

49:00Jason:That's great. And then just maybe use Tavar Savar as an example of how people get in touch. What do you do? You just go to Google Taverns Tavern Franchise. How do people find the person to talk to? Yep, do a little inquiry. We send you that FDD document. And then we talk to you two weeks later. What we love to do with our potential franchisees, and any franchisor should want to do this, we like to send you to one of the stores in Georgia. There's a franchisee there. And we have you go spend the day in the store, spend time with the franchisee, ask him how he feels about it. I'm not in the room.

49:33We're not monitoring anything. Talk to the employees, see the customers, spend the whole day with the franchisee. And that's a great thing for you to do as well. If you're thinking about doing a franchise, go to the restaurant first, even before you contact the franchise company. Talk to the owner. He'd love to see it be a franchise too. Remember, every additional franchise puts more money into marketing funds. So every franchisee wants to see more franchisees.

49:59Jason:All right, well, John Taffer, it is always a pleasure to talk to you. Maybe next time we record a podcast about franchising, you'll be able to tell us all about running the doggy daycare franchise. Could happen. That would be fun. Yeah. All right. John, thanks so much. This has been so great.

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