BUILDING A CULTURE OF ACCOUNTABILITY
Steve LeFever, CFE
Profit Mastery
Chairman
Mark Liston, CFE
Glass Doctor
President
Greg Esgar
Massage Envy
CFO
Tim Purcey
Comfort Keepers
COO
FOUR DISTINCT WAYS TO
IMPROVE ORGANIZATIONAL
PERFORMANCE
YOUR MODERATOR
Steve LeFever, CFE
Founder and Chairman
Profit Mastery
Seattle, WA
PANELISTS
Mark Liston, President, CFE – Glass Doctor
Greg Esgar, CFO – Massage Envy
Tim Purcey, COO – Comfort Keepers
BUSINESS PERFORMANCE…
Management is doing things right...
Leadership is doing the right things.
Considerations in
Business Performance and Profitability…
BUSINESS PERFORMANCE…
• The “success road” is littered with failures
• Profile of the business owner
• 80% of businesses fail
WHY?
Measure…
Monitor Financial Position
What Gets Measured, Gets Managed
and
What Gets Managed, Gets Done!
Monitor Financial Position
Three Primary Considerations…
Accountability and
Performance is a
three-legged stool
• Education – establishing the foundation
• Benchmarking – creating the yardstick
• Performance Groups – providing the
accountability and discipline
The three gentlemen you’ll meet
today have all “done it”...
Not perfectly...
but they’re here —
And they’re still standing
And their networks are significantly
better because of their efforts
AND...
Although their stories are very different...
Their experiences, each in their own
way, are remarkably similar
Let’s meet Mr. Mark Liston...
MARK LISTON, PRESIDENT, CFE – GLASS DOCTOR
MARK LISTON, PRESIDENT, CFE – GLASS DOCTOR
Overview of company
• Established in 1962
• Began franchising in 1977
• Became part of Dwyer Group, Inc. in 1998
• Sold to private equity in 2004
• Dwyer Group has more than 1,700 units
• Glass Doctor has 190 franchisees in the US
and Canada with 300 locations
MARK LISTON, PRESIDENT, CFE – GLASS DOCTOR
• How to transfer accountability to the
franchisees
• Identifying your key people and teaching
them how to work together
• Performance groups make benchmarking
actionable
• Franchisees can build stronger, more
motivated teams!
Systems
Analysis
114 Areas!
YOUR DREAM TEAM
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Mark Borchin
Jon LaLanne
Gene Porter
Neil Hall
Garry Jones
Tom Ashley
Brad Roberson
Colt Easley
Bryce Stahlke
Jim Bernstein
Dave Kozlowski
George Strauch
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Matt Kelly
Larry Patterson
Ed Sieber
Jeff Bogdanski
Bob Boehm & Kelly
Larson
Cary Hooper
Justin Eimers
Mike Scorzo
Mike & Mary Ellen
Jones
Dave Hawthorne
Bryan Yarborough
RANK
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ITEM
Phone Handling
Know Your Numbers
Local Advertising/Marketing
Tone, Attitude, Lead by example
Business Plan/Goal Setting/Budget
Full Service Offering
Image/Brand Support
SWAT/MPG
Proactive Dispatching
Outside Sales Rep
Cross Trained Staff
Office Flow
Consistent/ Ongoing Training
Timely Closeout/Invoicing
THE DOCTORS OF THE CLINIC
• 8 Franchisees who make up 19.8% of the
volume
– Goal of 50% growth per year
• 2 more groups followed after hearing results
• All three groups have a Glass Doctor
Franchise Consultant working with them
• Calls each week
– Voted chairperson for group
•Tim Jokl – Chair, Indianapolis
•Colt Easley – Denver
•Brad Roberson – Brookhaven / Jackson, MS
•Vern Steiner – Millersburg, OH
•Neil Hall – Amarillo
•Jerry Doyal – NW Louisiana
•Mike Shanahan – Austin
•Gene Porter – Clovis (NM) & Lubbock (TX)
•David Herrli – Elkhart (IN)
THE “A TEAM”
•Wayne Gaudette, Chair – Raleigh
•Holly Nieman – Hot Springs (AR)
•Ron & Jane Maxey – Northwest IN
•Matt Nicklaus – Inland Empire (CA)
•Ed Cape – Virginia Beach
•Jeff Bogdanski – Greenville (SC)
GREG ESGAR, CFO – MASSAGE ENVY
THE MASSAGE ENVY BRAND
• Founded in 2002 (Scottsdale, AZ)
• First franchise awarded in 2003 (Phoenix, AZ)
• Massage Envy Spa opens in 2007 providing
therapeutic facials along with massage
• Established an exclusive partnership with global
skincare leader Murad® in 2008
• Today:
• 848 Open Clinics
• 594 Massage Envy Spas
• 1,111 Total awarded franchises
• Acquired by Roark Capital Group in late 2012
THE MASSAGE ENVY MODEL
• Professional, convenient, affordable
• Membership model
• Recurring revenue
• Offerings deliver greater value to the
consumer
• Competitive national pricing structure
• 43 regional developer groups nationwide
• 73% of franchisees are multi-unit owners
BRAND GROWTH
• Over 1.3M members nationwide
• 103 new clinics opened in 2012
• 16.15 million services were performed in 2012
• 50 millionth massage performed
• 1 millionth facial performed
• Opened in Hawaii in 2012
• Opening in Alaska next month – 47 states!
• In 2012, on average, the network was
performing 300,000 services per week
BRAND GROWTH
• World’s largest employer of
licensed/registered massage therapists
• Only nine units have closed in the brand’s
ten year history
• National Finance Program: Massage Envy
is one of only 30 franchises selected for this
national program that provides
development capital to new and existing
franchises
UNIT LEVEL PROFITABILITY
• Average unit volume is $1.2 million
• Unit level profitability is an inherited culture
cultivated by PROFIT COACHING from
Massage Envy Corporate
• Culture of sharing relevant data
• Profit coaching occurs at three levels:
– Regional developer
– Franchisee
– Clinic
UNIT LEVEL PROFITABILITY
• Data Sources
Financial
Membership
Data
Unit POS
OSR Feed
Legal
CRM Database
Data Warehouse/
Report Portal
Customer
Service
Marketing
Corporate
Region
Franchisee
Clinic
ADDRESSING UNIT PROFITABILITY
• Profit centric leadership is a core pillar to
organization
• Profit coaches
Forward thinking
• Provide limited data enabling franchisees
to FOCUS on relevant data
• Provide multi-level comparisons; region to
region, clinic to clinic
ADDRESSING UNIT PROFITABILITY
• Metrics are available 24/7 via a
proprietary intranet accessible by RDs
and Franchisees
• Profit forecasting and planning occurs
prior to a clinic opening as well as
recurring review once open
UNIT LEVEL PROFITABILITY
• Methods of Profit Coaching
– Collect clinic P & Ls via a network portal and
layer results through a consistent template
– Create reports and rank through Key
Performance Summary
ADDRESSING UNIT PROFITABILITY
• Methods of Profit Coaching
– Share network metrics (price points, region
stats, results by vintage, etc.) through the
report portal and at the Massage Envy
Annual Franchise Conference
– Health Meters were created for Regional
Developers to monitor clinic performance
(triage system: green, yellow, red)
– Created a Profitability Committee through
the National Franchise Advisory Board
RESULTS OF PROFIT COACHING
• EBITDA increases year-over-year
• Double digit same store growth
• Goal setting is aimed at increased revenue
and business growth
• Provides insight into the business - catalysts
and deterrents for profit growth
• Encourages franchisee to focus on what’s
important
• Creates a competitive environment
• Provides a clear vision for the future
TIM PURCEY, COO – CK FRANCHISING, INC.
BUILDING A CULTURE OF ACCOUNTABILITY
• Comfort Keepers
– Profile
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2nd largest franchise in the Home Care Industry
As of Fiscal Year Ended Aug 31, 2012 644 Units
High degree of MUO’s
1 of 60 (Last Count) competitors
High franchisee satisfaction
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Founded 1998
Began Franchising in 1999
Private Equity owned from 2003- 2009
Strategically owned since 2009
– History
– Structure and ownership
• We are a wholly owned subsidiary of Sodexo
BUILDING A CULTURE OF ACCOUNTABILITY
• Process
– Peer groups
– Coaching
• Personalize
– Vision
– Success
• Power
– Measurement
– Influence
BUILDING A CULTURE OF ACCOUNTABILITY
• Franchisor responsibility
– Create the opportunity
– Create the tools
– Sell the franchisees on the value
– Participate from the top
• Franchisee responsibility
– Commit the time
– Follow the process
– Dedicate the resources
– Do the work
BUILDING A CULTURE OF ACCOUNTABILITY
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Engagement
Systems
KPI’s
Accountability
Strategic Disengagement
Wealth Building
COACHING
• Characteristics
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• Tactics
Franchisor Managed
Coach
Individual
Tactical
Operational
– Assessment
– Training
– Follow-up
• Areas Covered (Tactical)
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Finance
Operations
Sales
Marketing
PEER GROUPS
• Characteristics
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Franchisor Facilitated
Peer
Groups
Strategic
Fiscal
• Tactics
– Education
– Benchmarking
– Accountability
• Areas Covered (Strategic)
– Growth
– Profitability
– Wealth building
CONTACTS
• Steve LeFever: [email protected]
• Greg Esgar: [email protected]
• Mark Liston: [email protected]
• Tim Purcey: [email protected]
DRIVING UNIT PROFITABILITY
It’s a Journey
From Profit Mystery…
To Profit Mastery
Just do it!