Tag Archives: management

November 15, 2019 · 4:05 pm

Concessions

Let’s go to the movies this Foodie Friday. I did the other day. If you’ve been spending time at home streaming your entertainment and none at the theaters, you might not be aware that things have changed dramatically at the old cineplex with respect to food. I happened to go to my local Alamo Drafthouse, which features recliners as well as a large menu of food and beverage.

You are probably aware that theater owners make more money from concessions than they do from admissions. You might have noticed that most movie concessions are high-margin items such as popcorn and soda. Still, I generally didn’t spend much more than $10 on food and beverage. Boy did THAT change at the Alamo. Even factoring in the additional labor costs for the servers bringing the food to my seat, I’m pretty sure that the theater owner netted a heck of a lot more from me than they might have in the past.

The Alamo overall is an interesting model. There are fewer seats in the theater but that really only reduces the take from admissions. My guess is that the concession net more than makes up for the fact that there are fewer bodies in the seats. Of course, my Alamo also has 10 theaters under one roof, ranging from 50 to 100 seats. What I like about this from a business perspective is how they’ve rethought the business model and focused on the part of the business that makes an owner money. The concessions are a significant upgrade. There are craft beers, top-shelf cocktails, and even a vegan menu. Sure there is popcorn but it’s served with real clarified butter. It’s also a bottomless bowl. There is also an herb popcorn that is tossed with that same butter and fresh herbs. Do I give a second thought to paying $8.50 for it? Nope – it’s delicious. So are the sandwiches, pizzas, and salads. $45 on drinks and food? Even at a 20% margin, my concession purchases yield the business owner as much as my previous bill might have been in total.

Any business can learn from what the Alamo and other theaters are doing as they transform their business models in the face of unlimited streaming options. It’s the Wille Sutton Rule – go where the money is.

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November 13, 2019 · 9:50 am

Why This Brand?

When you have over 500 different brands that you represent, the reality is that you can’t know each and every one of them to the same degree. As I’ve been speaking to people interested in changing their lives for the better, I’ve come to have a list of “go-to” brands in each of the major categories. How these brands got on this list is, I think, instructive for every business.

I was actually speaking about this topic to a development director at one of the brands who reached out. Her first question was about the commission structure. We consultants get paid by the franchisors based on people signing franchise agreements and not by the candidates. I gather that for some consultants that how much of a commission they can make influences their choice of which brands to put forward. Point number one: while it’s obvious that the brands are my customers since they pay me, it’s impossible to work in a situation where the candidate’s interests diverge from the brand’s. In my mind, therefore, the commission is a non-factor. I can’t expect to earn anything in a situation where I hand off an unqualified candidate to a brand. My point is that in any sales situation, every stakeholder’s interests must be considered and subordinating what’s right for one party to a potential higher commission isn’t going to work.

One thing that influences my choice of brands a lot is the amount and quality of information the brand provides. You would not believe how little information I have about some of these franchises, several of which are businesses I don’t quite understand. In some cases, all I have is bare-bones information about costs and royalties and a link to the consumer website – not even a “want a franchise?” page which I have to find on my own. Where some brands give us presentations, folders, one-sheets, and research, others give us nothing. You can guess which brands get pitched. Point number two: don’t send your troops into battle without arming them properly.

The next thing I consider is responsiveness. In many cases, getting the candidate engaged enough to want to speak to a franchisor is a time-consuming effort. Once they are ready to go, I want someone at the franchisor who will be as proactive as I have been to get the candidate this far.  Once I’ve made an introduction, I expect the brand to reach out within a day, hopefully within an hour or two. Point number three: if you’re not going to work as hard on making a sale as others engaged in the process, you need to know that there are other businesses out there who will. Be responsive. Return phone calls and emails in a timely manner.

Finally, I also consider communication. Some brands tell me every time they have an interaction with my candidate. Others have been radio-silent. You can guess which type I prefer. It’s very hard to over-communicate in any business.

Those are things I consider when choosing partners. Anything I’ve missed that you think is critical?

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Filed under Consulting, Franchises, Helpful Hints

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October 18, 2019 · 2:45 pm

The Sides

This Foodie Friday, I want to discuss what is a sometimes-overlooked ingredient in a successful meal – the sides. I’ve got a friend who shows up for dinner every so often and the question is never “what are you making?” but “what are the sides?” That got me to thinking.

You probably haven’t given much thought to the role that side dishes play. First of all, they can help balance out the nutrition of your meal. I’ll plead guilty to being very “main” focused (you can read that as “protein”). Making a smart choice about serving a seasonal veggie or a salad or a roasted root puree of some sort can support the main dish in a way that actually improves it. Think mashed potatoes and meatloaf, for example. Many really good sides require very little work and can be prepped and assembled while the main is cooking.

There is actually research that bears out the importance of side dishes to restaurant diners. A research company published a report in 2013 called…

The Starters, Small Plates & Sides Consumer Trend Report, which details the importance of side dishes in the consumer’s choice of entree. 36% of consumers stated they selected an entree based upon the accompanying sides, and 46% stated they were less likely to order an entree if it came with an accompanying side they disliked. In addition, about 45% of consumers prefer familiar sides over unfamiliar sides. Sides can make or break an entree.

So there you go. Of course, the same is very true in business. Every team has its “mains” but every team also needs its sides. I have rarely found any star manager in business who also didn’t surround him- or herself with a phenomenal bunch of people that might not have been stars themselves but served to make the entire team better. These folks – analysts, accountants, and others – are the ones who usually aren’t front and center but who make the business successful, just as the sides make the main shine and the meal a success.

Our job as managers, much like that of a skilled chef, is to figure out the accompanying sides. I’ve sat with many clients who point out after some business development star has come to pitch them that the “star” isn’t going to work on their business day to day. It will be the “sides”. The smart clients always asked about that, often wanting to meet the people who would be on the account day to day. I know I usually asked about that as well when I got pitched by an outside firm. If the sides weren’t very good, I’d usually pass on the rest of the “meal.”

Don’t ignore your team’s sides. You’re only as good as they are!

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