IN IT FOR THE EMPLOYEE RETENTION IS A KEY COMPONENT TO ANY HEALTHY FRANCHISE OPERATION. SO HOW 00 YOU MAINTAIN A SATISFIEO STAFF? WE SPOKE TO COMPANY OWNERS ANO EMPLOYMENT EXPERTS WHO HAVE LEARNED THE SECRETS BEHINO WORKER LONGEVITY ANO THE LONG-TERM BUSINESS SUCCESS THAT COMES WITH IT you fell asleep in a corner booth at one of the 23 Lion's Choice roast beef restaurants in the St. Louis area for, say, a decade, you might wake up to ^ some familiar faces. While most quick- service restaurants have annual turnover rates of 60 percent or higher, according to the People Report Workforce Index, the average tenure of the associ- ate managers at Lion's Choice is six years. What's more, the average assistant manager has been on duty for 12 years, and the average general manager for a whopping 17. In fact. Lion's Choice has an em- ployee who has been with the family-owned com- pany since it launched in 1967. And a few years ago there was no turnover at all at one of the franchise's 15 company-owned restaurants. 8oi Entrepreneur February 2013 Sitting tight; Jim Tobias of Lion's Choice. Employee retention and loyalty is Group, agrees. "We have something I call the holy grail of the franchise world— the customer-retention formula," he says. indeed, it's a huge goal for almost every "Employee satisfaction drives customer type of business. But keeping employees satisfaction. Customer satisfaction drives around, especially in low-skilled jobs, customer retention. Happy employees is difficult and can seem like a waste equals happy customers. Never in the of money and energy. Not so, says Mel history of business has a disgruntled Kleiman (and just about every other employee delivered delightful service." management guru out there). The found- Despite the logic of that formula, er of Humetrics, a Sugar Land, Texas, when things go wrong, it's usually consulting firm specializing in recruiting employees who bear the brunt of cost- and retention, believes employee loyalty cutting. In recent months several high- is at the core of every good company. profile franchisors, angry about new "Employee retainment is probably more government policies on healthcare, have important today than it's ever been," he announced plans to reduce wages, cut says. "People are doing more with less, hours, cancel employee benefits and raise so great employees are critical. The way prices for consumers. And while many you treat employees determines the way business owners can sympathize, most employees treat customers." see that strategy as self-destructive. Sales productivity expert John Boyens, "I think franchisees are often frus- co-founder and president of the Nash- trated by employees, and some under- says. "Some think turnover is expected ville, Tenn.-based sales and management stand the relationship between employ- and churn through employees. When consulting and trainingfirmBoyens ees and sales better than others," Boyens things go bad, one of the biggest cuts The next revolution in chiropractic care" -John Leonesio, CEO The Joint The Joint is led by John Leonesio, Founder and former CEO of the highly successful Massage Envy Franchise concept. His team of nationally recognized operations and marketing professionals m\\ guide and support you in building your business. THE ADVANTAGE OF A SUCCESSFUL FRANCHISE The Joint offers the opportunity to start, grow and profit using a highly successful, all cash business model: • RECURRING MEMBERSHIP MODEL • NO INSURANCE •HIGH PATIENT VOLUME • LOWER PATIENT PER VISIT COST THAN TRADITIONAL INSURANCE CO-PAYS ' NO APPOINTMENTS AND CONVENIENT HOURS LOW OVERHEAD TURNKEY SYSTEMS PROVEN MARKETING APPROACH ...the c±)iropractic place i •* Find and Like us at For additional information on franchise opportunities visit thejoint.com or contact Facebook.com/thejointchiro Chad Everts (email@example.com) at 480-245-5960 © 2012 The toint Corp 82; Entrepreneur February 2013 CULTURE OF RESPECT At Lion's Choice, Jim Tobias, a second- generation owner, is committed to treating his employees well. Sometimes that means spending more upfront on training, hourly wages and benefits, but he is convinced he gets it all back in return. "I think a lot of larger restaurant chains are concerned with showing good numbers every quarter, and they try to squeeze as much as they can out of every employee. That's great for them in the short term, but terrible in the long run," he explains. "I've had so many employees that have played that game before coming to Lion's Choice. They love the fact that they know what they're in for here." What they find at Lion's Choice is a culture of respect. That begins with man- right off the bat is to reduce training people don't get bonuses, or the share of agers, who aren't forced to work crazy and development. But that's one of the their healthcare costs go up. That's when overtime hours, as is common at many key motivators to help people grow. Or you have employee turnover." fast-food outlets. GMs are scheduled for Wood Refinishing Franchise Opportunity Entrepreneur^ N-HANCE WOOD RENEWAL IS THE # 1 CHOICE for refinishing hardwood floors, FRANCHISE cabinets, furniture, and other wood surfaces. With an N-Hance business, you'll offer customers something no one else can: beautifully restored cabinets and floors at a fraction of the cost and with No Dust. No Mess. No Odor.® Get more information about becoming an N-Hance franchise nhancefranchise.com or call 866-642-6231 February 2013 Entrepreneur ¡83 What's the Proof of a Great Franchise? 47.5 hours per week and never have to exceed that. Flexibility is the rule: If they have to leave 30 minutes early to pick kids up from school or run a personal er- When owners rand, they aren't chastised. Lion's Choice also employs three swing managers who can fill in so that GMs can take vaca- buy more tions without worrying that their store will collapse while they're away. stores! "Scheduling is the biggest thing you can do to keep employees happy," Tobias says. "You have to respect that your More than 1/3 of our franchisees have purchased employees have a life outside work. We gdçlitional stores over the last 3 years! want the workday to be sustainable. We Don, Multi-unit Franchise Owner don't want them to sprint through work, telling themselves, 'Just stick it out an- BatteriesPlus.-Î: other month.' We want them to feel that what they're doing today is something they can handle years into the future." Work for yourself but not by yourself. Tobias believes the spirit of respect Join the nation's largest and fastest-growing he instills in his managers trickles down battery and light bulb franchise. to hourly employees as well. "They have more respect for the business, since we 1-866-687-1103 • BatteriesPlus.com/Franchising give them a truly professional manager running each shift," he says. "Since we go over and above to give them that, they give us more in return." SUNCOAST DECOR 1.877.328.8482 Tobias offers health and life insur- ance to full-time employees at com- pany-owned stores. But Lion's Choice franchisees have the freedom to design their own benefits packages. "We don't require franchisees to do the same as we do, hut we're in the same marketplace, and there's a lot of interaction between franchise stores and corporate," he If you are looking for a Business thats got explains. "Because of that, our franchi- Incredible growth potential and will generate sees know that if they offer benefits too amazing revenues, then look no further!! much different from ours, they're going All our products have the "WOVV" factor and all to lose people who will come to work for our products are Manufactured in the USA "Yes in the USA" the corporate stores. We don't need to We are the leading manufacturer in the multi- force the issue." million dollar design business, for 3D Walls. All But he admits that if his company our products are made for interior and exterior begins expanding outside the St. Louis use. area, it may not be able to offer the As Distributor you will not firid a more exciting and dynamic business same perks. "When franchisees open opportunity that offers unlimited earning potential and excellent growth potential. in remote markets, it could be a whole different game plan," he says. "It could Regional Distribution Area's-starting at $19,900.00-$75,000 be hard for a franchisee with one store International Distribution -Available upon Request to offer medical insurance." But fringe benefits aren't the only For more information: www.suncoastdecor.com or call us today for a FREE way to encourage loyalty and longevity. SAMPLE & Brochure: 877-328-8482 Humetrics' Kleiman says that a great boss and co-workers, interesting work 84; Entrepreneur February 2013 and a family-friendly environment have been shown to trump extra cash for INTENSITY"SECURITY most employees. Feelings of competence and satisfaction are often a function of training—the more in-control and involved employees feel in the job, the more likely they are to stick with it. Secure Yeur (ppartunit( That's something Lori Lowell, who INTENSITY SECURITY is growing in owns eight Gold's Gym locations in one of the world's largest markets. Virginia and Wisconsin, likes to empha- size. Since she can't be on-site every day, Security is a trillion dollar market. it's imperative for her to have highly Our leading Security dealerships trained employees who are as invested provide outstanding revenue in the business as she is. "We want to give our employees enough training so opportunities with our affordable they can stay a long time and grow and Security products. When you are feel valued," she says. "We can't give our an INTENSITY SECURITY dealer members good experiences unless our employees have good experiences. We you will grow your revenue by want them to wake up in the morning helping people be protected! and want to go to work." Break and Enter Window Films HIRING POWER Ballistic Window Films The key to employee retention is to be Auto Ballistic Window Films very particular about recruitment, then Full Training and Support to train new hires in operations to the Affordable Business and Home highest level necessary. "We need to CCTV Systems empower our employees. We all need to Innovative Security Fencing breathe the same, we all need to know Unique Automobile CCTV how we like to operate, what our culture Engineering and Technical is all about," Lowell says. "It takes time Support 24/7 and energy and money to do that and Financial Support Available to make sure they perform. You have to Full Advertising Program be careful. Turnover is tragic; it's a huge Website, Social Media and Online Shopping Cart waste of time and money." Turnover is inevitable, however, if you don't start out with the right employees. Exclusive Dealerships Kleiman likes to cite the founder of Wal- New Available , Mart: "Sam Walton used to say the most important decision a business owner makes is who they allow through the door to take care of customers." But identifying qualified employees who may be in it for the long haul starting from LIFE Z4, WELL PROTECTED takes more than posting a job opening online. "The biggest problem is that Linked i i )| amazon.com You companies go looking for employees in the wrong place," Kleiman says. "They look in the easy pools without any big fish. They're looking for people who are looking for jobs." Contact Intensity Security at C'^Q ^1*1% i D lu"f UU"4 email: sales@lntensitySecurity.com -4094 Instead, he suggests taking a more www.INTENSITYSECURITY proactive approach: headhunting great COm/contact.html managers who are already employed February 203.3 Entrepreneur ¡85 Feeling queasy about a franchise investment? and keeping an eye out for closures or better, so you just leave them in the job. layoffs among the competition in order Mediocrity is a slow death." to pursue the best talent. Even a small Sales productivity expert Boyens franchisee should be actively recruiting, believes franchisees are particularly not waiting for résumés to be slipped under the door. "The worst person to hire is not a bad employee; it's an OK employee," susceptible to this. "When you go back to the beginning, to when they started operating on bootstraps and scratched together all the money they has Your Kleiman says. "Why? If you get a bad could get, they usually started with employee, you figure out pretty quickly friends and family working for them," he says. "It's a difficult sit- uation to have employees 57-years of results based on bloodlines and not experience or skill. NYSE listed (AAN) You can't afford to hire 2000 stores talent, and have a ten- dency to settle for what throughout North you can pay for rather America than what you need." A category leading Finding a way to create a culture of satisfied Franchise 500® employees from the get- business go may pay off faster than business owners imagine. "Research shows that repeat customers spend, on average, 67 percent more than new custom- ers," Boyens says. "Em- ployees driving customer satisfaction is so impor- tant. If you have happy customers, they have a tendency to buy more." Tobias of Lion's Choice agrees. "If you treat your employees like numbers, as an expense, it's tempt- For safe and effective ing to cut them when investment relief, contact things get tough," he says. "But if you and your Greg Tanner, Aaron s managers know them, National Director - know their kids, notice Franchisina, when an employee buys a new car and actually "EMPLOYEE SATISFACTION care about them, you see DRIVES CUSTOMER them as an asset, not an expense. If you take SATISEACTION." —JOHN BOYENS, BOYENS GROUP take good care of the good care of them, they'll 676-402-3629 they're bad and get rid of them. If you customer—and you." ® aaronstrancliise.com hire someone who is OK, then at least JASON DALEY BASED IN MADISON, Minimum net worth $500,000 they're OK, and you have too many WIS., IS A FREQUENT CONTRIBUTOR . .i- ; ©2013 Aaron's Inc. All Rights Reserved, things to do besides finding someone TO ENTREPRENEUR. 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