Have you ever thought about how a non-profit might use franchising? Or how franchising can make a positive social impact in your local community, the country, or maybe the world? Our guest today, Dr. Ben Litalien, is a Social Franchising expert and he shares some of his insights on non-profit and social franchising in our interview.
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LINKS FROM THE EPISODE:
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ABOUT OUR GUEST:
With over 20-years of experience in the franchising space, he is a trusted advisor to various organizations, including IKEA, RE/MAX, and Direct Energy. Today, he is the founder of Franchise Well, a consulting practice dedicated to the improvement and enhancement of franchising. He is also an adjunct professor at Georgetown University and the University of Maryland. Dr. Ben is often the go-to speaker in this space and has been referenced as a franchise expert by the Wall Street Journal, USAToday, and Entrepreneur Magazine.
ABOUT BIG SKY FRANCHISE TEAM:
This episode is powered by Big Sky Franchise Team. If you are ready to talk about franchising your business you can schedule your free, no-obligation, franchise consultation online at: https://bigskyfranchiseteam.com/ or by calling Big Sky Franchise Team at: 855-824-4759.
Tom DuFore, Big Sky Franchise Team (00:00):
You’ve worked hard to build your business. And now it’s time to grow. Welcome to the Multiply Your Success Podcast. I’m your host, Tom DuFore, CEO of Big Sky Franchise Team and a serial entrepreneur.
Tom DuFore, Big Sky Franchise Team (00:13):
The purpose of our podcast is to give you a weekly dose of inspiration and education to help you multiply your success. As we open today, have you ever thought about how a nonprofit might use franchising or maybe how franchising in your business can make a positive social impact in your local community, the country, or maybe even the world?
Tom DuFore, Big Sky Franchise Team (00:38):
Well, our guest today, Dr. Ben Litalien is a social franchising expert and he shares some of his insights on nonprofit and social franchising in our interview. So let’s go ahead and jump right into it.
Dr. Ben Litalien, FranchiseWell (00:52):
Yeah. Great, Tom. Thanks for having me. Looking forward to it. Ben Litalien, Franchise Well started in 2009, offering consulting services in franchise sector.
Dr. Ben Litalien, FranchiseWell (01:06):
And we’re based out of Fredericksburg, Virginia, actually home office. So really ahead of the curve on the work from home world that we’re living in today.
Dr. Ben Litalien, FranchiseWell (01:19):
But we’ve had the pleasure of consulting with a very wide variety of clients over the years. As large as Ikea or Re/Max and UPS Store and others.
Tom DuFore, Big Sky Franchise Team (01:33):
Sure. Great. Well, and how did you get into the franchising business? It’s always interesting, spending really my whole career in franchising. I always love of hearing how people get into franchising.
Dr. Ben Litalien, FranchiseWell (01:46):
Yeah, well, today there are a good number of people who choose to go into franchising, which is great. That’s maturity of the industry.
Dr. Ben Litalien, FranchiseWell (01:57):
When I was early into franchising, we wouldn’t allow people to call it an industry, but it clearly is today. Back in the late 80s, I worked for a company that was sold to Quaker Oats Company out of Chicago.
Dr. Ben Litalien, FranchiseWell (02:14):
And I flew up there, interviewed, and they offered me the opportunity to move my family from Texas to Chicago. As you can imagine that’s quite a culture shock and wife and I just said, “No, I don’t think so. We’re not going to move to Chicago.”
Dr. Ben Litalien, FranchiseWell (02:30):
So met a guy, family friend who introduced me to a local attorney in Houston, who had invested in a concept. And I really liked the underlying business model. It was an automotive paint touch up concept called Flying Colors.
Dr. Ben Litalien, FranchiseWell (02:48):
And I am still into restoring muscle cars and whatnot. And so I was really into cars and that kind of thing. So I agreed to meet with him and find out what was going on.
Dr. Ben Litalien, FranchiseWell (03:01):
And he said, “Look, my niece, her husband had this technology to touch up cars and so I invested in it. They used the franchise model to expand it and I don’t know, something went wrong, but they’re all gone now. They’ve left me holding the bag and I don’t know anything about the business. I don’t know anything about franchising and I just need somebody to come in and figure this out and make this thing successful. And if you do, you can have the business. Like a mouse caught in a trap. I don’t even want the cheese just get me out of the trap.”
Dr. Ben Litalien, FranchiseWell (03:41):
And being, 27 or eight, whatever it was. My wife had a great job with great benefits. I’m like, “Hey, if you’re going to go try and do something, man, this is the time to do it.” Right.
Dr. Ben Litalien, FranchiseWell (03:53):
So I took it on and literally drove to Waco from Houston to meet with Don Dwyer. I thought, “I need to figure out franchising.” And so I drove up there, knocked on his door. He graciously welcomed me in and we sat for two hours and he explained franchising to me and what a sage, we became very good friends and actually did some fun things together.
Dr. Ben Litalien, FranchiseWell (04:23):
But based on his input I met with the franchisees to figure out what’s going on here, figured out what their issues were and said, “Look, just give me a little time and I will address these issues and we’ll get this thing on track where it was supposed to be.”
Dr. Ben Litalien, FranchiseWell (04:41):
And we did. We did a turnaround, we got it going. The franchisees got excited. We started selling franchises and started growing. And over a three year period, we went to 22 states, three Canadian provinces and I fell in love with franchising. I fell in love with franchisees. I fell in love with the multiplier and we’ll talk about that later, maybe.
Dr. Ben Litalien, FranchiseWell (05:04):
But I began to really realize the power of the franchise model and it’s really in the franchise or understanding they’re in the franchise business and the franchisees are in the underlying business.
Dr. Ben Litalien, FranchiseWell (05:20):
And even in my consulting over the last two decades or whatever, so many franchisors are trapped in the underlying business and it leads them down the wrong path and they make lots of mistakes that they don’t want to. And they are not even knowingly doing it in some cases.
Dr. Ben Litalien, FranchiseWell (05:38):
But any case, that’s how I got into franchise. I basically took over a failed concept in a franchise business and figured out how to turn it around and grow it successfully.
Tom DuFore, Big Sky Franchise Team (05:53):
That’s amazing. Well, what a wise move to seek and go meet with Dwyer and great decision certainly to make that effort and go seek some good counsel and the fact that he listened.
Tom DuFore, Big Sky Franchise Team (06:09):
He’s definitely one of the most well known personalities and people in franchising in the world. So what an opportunity.
Dr. Ben Litalien, FranchiseWell (06:20):
It’s actually funny you mentioned that because I called the IFA. I thought, “There’s a trade association.” So I reached out to the IFA and said, “Hey, I’m taking over this company. I need to understand franchising, how does it work?”
Dr. Ben Litalien, FranchiseWell (06:35):
And they said, “Well, we don’t really have an education program.” At that time there were no franchisees, there were no suppliers, it was just franchisors, kind of a good old boys club.
Dr. Ben Litalien, FranchiseWell (06:45):
And they were like, “Well, you should go talk to Don up in Waco.” And I knew of Rainbow International at the time. But it wasn’t the world we live in today. I had to literally get in my car and drive up there to go see if he would meet with me.
Dr. Ben Litalien, FranchiseWell (06:59):
I just decided I’ll just hang out until the guy meets with me. But you’re right, it was an amazing blessing. He was a very faithful man and was very gracious with his time and was very helpful. Not just then, but as we continued on in development, but yeah, that was a pivotal point for sure in my franchise journey.
Tom DuFore, Big Sky Franchise Team (07:26):
Yeah. Well, it sounds like after you get your taste of franchise, it seems like most of us in the space that have been around and in it for a long time, you get a taste and you don’t want to leave. You want to stay in franchising.
Dr. Ben Litalien, FranchiseWell (07:39):
Yeah. Whether you want to or not sometimes. In the program at Georgetown that I teach, I’ve had over 1000 graduates on the program from all over the world and every different kind of concept.
Dr. Ben Litalien, FranchiseWell (07:52):
And that is a very true thing that you might not have planned to go into franchising but once you get there, there’s something about it that it is very difficult.
Dr. Ben Litalien, FranchiseWell (08:04):
I recently had an individual who had graduated from the program and for whatever reason, they ended up going out of franchising, had an opportunity and they took it and didn’t work out. And man, they were like, “I got to get back in franchising.” It does take over your life.
Tom DuFore, Big Sky Franchise Team (08:23):
Yeah. So you’ve got your consulting business now that you’re running, you’re also teaching. So talk a little bit about what you’re teaching and franchising?
Dr. Ben Litalien, FranchiseWell (08:36):
Yeah. So as I kind of got into franchising from that original company, he ended up selling the company to the largest competitor, which was kind of eye opening.
Dr. Ben Litalien, FranchiseWell (08:49):
I kind of went into franchising and taking over that company. I’d still be doing it today. I was all in. My total focus, all consuming. And then somebody said, “Well, here’s what I’ll pay you for it.” And I was like, “Man, I got to find something else to do. This is amazing.”
Dr. Ben Litalien, FranchiseWell (09:08):
The value put on a franchise company is different than a non franchise company. So I then parlayed that if you will, to look for another entrepreneur who had a concept that needed to be franchised and 130 mall food court franchises in three years.
Dr. Ben Litalien, FranchiseWell (09:25):
And what I’m trying to say is that as I began unraveling and living in the franchise space, I began to realize just how little information there is about it, how much education that no school’s teaching it at the time, very few consultants in the space at the time, you certainly didn’t learn franchising in your undergraduate.
Dr. Ben Litalien, FranchiseWell (09:48):
There was one paragraph in a management book that said, “McDonald’s uses a franchise model.” It just wasn’t highly regarded as a powerful, acceptable business model in the late 80s, early 90s, it was still kind of this bootstrapping, Wild West kind of approach that wasn’t well documented or understood in my opinion.
Dr. Ben Litalien, FranchiseWell (10:13):
And so I became a student of the franchise model and I started digging and trying to learn what drives this model? What makes it tick?
Dr. Ben Litalien, FranchiseWell (10:24):
And I’ll tell you the pivot point, I was doing my executive MBA at the University of Houston. And in that program at the beginning of each semester, they would bring you this bag for full of books for the next set of classes.
Dr. Ben Litalien, FranchiseWell (10:40):
And in the bag was this book called The Fifth Discipline by Peter Senge. S-E-N-G-E. And it’s required reading, blah, blah, blah. So, I start reading it. And at that time, I’m just fully engrossed in what is the franchise model? And how does it work? And what are the principles that underpin it? And trying to define these things. And there was no kind of go-to place to get these kind of answers.
Dr. Ben Litalien, FranchiseWell (11:08):
As I start reading The Fifth Discipline, which is about systems thinking, which is a very documented, very well structured management theory. At the time in the mid 90s, when that came out, there were a lot of management cookbooks coming out.
Dr. Ben Litalien, FranchiseWell (11:27):
With Peters and Waterman In Search of Excellence and other things. And I found them to be okay, but this was just completely captivating. It truly helped me understand franchising. Franchising is a system of systems, a training system, a development system, an operational system, a marketing system.
Dr. Ben Litalien, FranchiseWell (11:52):
And yet when those are put in silos, franchising does not work well. It does not create the outcome that you want, which is rapid growth. With systems thinking where those different components, although they’re fully developed systems in their own right, they have to be fully interconnected with the other systems.
Dr. Ben Litalien, FranchiseWell (12:17):
And as I began to unfold systems thinking and systems theory and relate it to franchising, it really became clear how to define it and how to describe it in a way that people could understand and utilize. And it’s been the basis of my teaching and my consulting ever since.
Dr. Ben Litalien, FranchiseWell (12:42):
So can’t stress enough how pivotal that particular book was and that theory. So, the teaching started because as I was going through finishing my MBA and reading that book, and really starting to articulate in my own mind, what the model of franchising is, was a dinner party of nonprofit executives.
Dr. Ben Litalien, FranchiseWell (13:07):
And one of the spouses of one of the executives was the head of New Business Programming for Georgetown University, basically certificate programs. And at that time there were a few programs for CPAs, for example, and project management and things.
Dr. Ben Litalien, FranchiseWell (13:29):
And his wife says, “Well, weren’t you saying you’re looking for new programs for the school. Why don’t you talk to Ben? He’s like some expert in franchising or whatever.”
Dr. Ben Litalien, FranchiseWell (13:40):
So it started a conversation about, is there an education program in franchising? And we looked across the landscape and there wasn’t much out there, really nothing at a major university, nothing structured and nothing founded on the model of franchising.
Dr. Ben Litalien, FranchiseWell (13:56):
Mostly it was people who had worked in franchising, sharing their ideas about how it worked and what worked for them. But what does sandwiches have to do with oil changes, right?
Dr. Ben Litalien, FranchiseWell (14:08):
The perspective was really from the underlying business perspective. What worked for me in franchising was all in one category, but there was nobody teaching it from a theoretical perspective of what is franchising? What is the model?
Dr. Ben Litalien, FranchiseWell (14:21):
And so that was in, geez 2010, I launched the original Franchise Management Certificate Program at Georgetown University. And so, gosh, it’s been what? 11 years now. Graduates from all over the world. 30% of the attendees are from outside the US.
Dr. Ben Litalien, FranchiseWell (14:44):
And so this got me really into focusing and researching. Well, that led me to think about getting my doctorate focused on franchising. So I did. I went to University of Maryland and I finished my Doctor of Management degree program in December of 2012. So I’m a Doctor of Management. My dissertation was on the theory of social franchising.
Dr. Ben Litalien, FranchiseWell (15:13):
So a lot of the research that I did in that program was first and foremost, every peer review journal article, or published research on franchising I read. So sadly that doesn’t amount to a lot when you think about other management theories and whatnot, but that was quite exhaustive, but very fascinating.
Dr. Ben Litalien, FranchiseWell (15:37):
But then looking at that nonprofit management and corporate social responsibility, I use triangulation to evolve a theory of social franchising, which has led me to work with dozens and dozens of nonprofit organizations to create strategies for how they can use franchising to support their mission.
Dr. Ben Litalien, FranchiseWell (16:02):
Probably most influentially it was working with Galen and Randy Welsch and creating and scaling Jibu. J-I-B-U. It just came out in Stanford’s Social Innovation Review, a whole expose on Jibu.
Dr. Ben Litalien, FranchiseWell (16:22):
Over the last, whatever it is, eight years has expanded to like eight countries in east Africa with like 2,800 franchisees and sustainable in multiple markets. And it’s really, I think, the best current example of a social franchise on the planet today.
Dr. Ben Litalien, FranchiseWell (16:43):
So anyway, lots of opportunities working with companies around this idea of franchising, can it do more? Or does it have a higher calling maybe than just taking a business concept and scaling it quickly?
Dr. Ben Litalien, FranchiseWell (17:00):
It certainly has proven itself to do that, but both Franchise Well, my consulting, is franchising for the betterment of society. So that’s how I kind of choose my concepts and my clients, but also the social franchise work that I’m doing came out of that research, so.
Tom DuFore, Big Sky Franchise Team (17:21):
Yeah, no, and that’s really interesting. And that’s something we don’t hear a whole lot about just in general, about this idea of social, especially social franchising.
Tom DuFore, Big Sky Franchise Team (17:32):
So, one of the reasons I wanted to have a chance to interview you on the show and the program here is just to talk a little bit about social franchising and what that actually means? Do I have to be a nonprofit in order to do it? Can I do this in my for-profit business? How does that work?
Dr. Ben Litalien, FranchiseWell (17:51):
Yeah, no, I appreciate the interest. I do find at any venue where I’m interacting with people that there is a tremendous amount of interest in this notion of social franchising.
Dr. Ben Litalien, FranchiseWell (18:05):
So, first of all, I would just say that a social franchise is a nonprofit owned franchise business. So the Goodwill, for example, if they were to put a subway franchise in one of their retail locations, that would be a social franchise, nonprofit owned, franchise business.
Dr. Ben Litalien, FranchiseWell (18:29):
I have many clients that are nonprofits that own UPS Stores, that’s turned out to be a really good fit for clients that are serving disabled population for example, who are working with them, they want to work in community, they don’t want to work in a shelter workshop and having a job in a UPS Store, it was so touching.
Dr. Ben Litalien, FranchiseWell (18:51):
I asked this one adult that I met at one of our first UPS Stores. I said, “What do you like about working here?” And he said, “When I tell people where I work, they know where I’m talking about.” Right?
Dr. Ben Litalien, FranchiseWell (19:07):
He’s used to working as a custodian in a building at night or something, right. Because the jobs for people with disabilities. Over 10% of the disabled population is unemployed. It’s huge, but they want to work in community.
Dr. Ben Litalien, FranchiseWell (19:24):
And he says, “People know when I tell them I work at the UPS Store.” They’re like, “Oh, that’s cool.” And it gives them a sense of like, “I’m part of this, not on the sideline,” and powerful. So a social franchise is a nonprofit that owns a franchise business.
Dr. Ben Litalien, FranchiseWell (19:42):
A social franchising is a nonprofit that scales their business if you will, or their concept using the franchise model. And people don’t really know this or understand it, but Goodwill operates just like McDonald’s, they charge an upfront fee.
Dr. Ben Litalien, FranchiseWell (20:05):
They charge an ongoing fee based on all the sales at your retail stores. It’s a three billion dollar organization with 3000 retail locations, it’s as big as any franchise on the planet yet they’re exempt from the FTC rule because the FTC doesn’t consider what they do an ongoing commercial endeavor.
Dr. Ben Litalien, FranchiseWell (20:32):
And so they don’t have to have a FTC, but they’re doing everything. They’re using the franchise model, just like we’re using it. But YMCA, there are many nonprofits that scale using the franchise model. We’re just not familiar with it in the franchise community because they’re not using an FDD and not under the FTC purview so fascinating arena.
Dr. Ben Litalien, FranchiseWell (20:58):
I think with Millennials in franchising sector now in record numbers, we are going to see more and more social franchise activity. Because there are concepts out there now that are coming into the space that are wellness oriented or health and medical oriented that certainly could fall in that category.
Dr. Ben Litalien, FranchiseWell (21:22):
I think we’re just on the front end of seeing some really amazing concept scale using franchising that are going to have a dramatic impact on society.
Tom DuFore, Big Sky Franchise Team (21:34):
Yeah. I definitely see some initial interest in that wave, in that coming wave. I see that as well. I agree with you. I definitely see that’s coming.
Tom DuFore, Big Sky Franchise Team (21:48):
One thing that I’d be interested in, just your thoughts on the idea, of if I’m in franchising or I’m new into franchising, or maybe an established franchisor, what’s a way for me to maybe get involved with one of these nonprofits? How have you seen companies go about and do that?
Dr. Ben Litalien, FranchiseWell (22:13):
Yeah. Great. No, I think that there’s a number of things. So one, every franchisor should be thinking, multiply your success, right? How can a franchisor multiply in this way?
Dr. Ben Litalien, FranchiseWell (22:28):
So, franchisor should be thinking about what the brand as a composite could be doing to make a difference in the world. Right? Fred DeLuca was a client for many years and became good friends.
Dr. Ben Litalien, FranchiseWell (22:45):
And as the founder of Subway, he candidly never saw Subway becoming this unbelievable franchise size. He had very modest goals originally. And I remember sitting in his office one day, they had like 10,000 locations. And he is reading me this letter about Jared basically, and thinking about does this make any sense? Should we really start thinking about what we do is create a fresh product? And that catapulted him into another 10,000 locations.
Dr. Ben Litalien, FranchiseWell (23:23):
But I talked to him later on in his life. I said, “Have you ever thought about rallying your entire brand around ending something?” A childhood disease or like the Gates Foundation, committed to ending malaria. Franchise systems are powerful, purposeful networks, how do we leverage them? Right.
Dr. Ben Litalien, FranchiseWell (23:45):
And I’ve worked with several franchise systems to pull their network together, to focus on something that’s important to the network. Something’s important to their customers. I don’t know if you’re familiar with The Cleaning Authority, but I was on their board for a few years.
Dr. Ben Litalien, FranchiseWell (24:02):
And we rallied franchisees together and really started focusing on feeding people in our local communities. And they started down a path, a cares program, Cleaning Authority Cares of gathering pantry items at the franchisee level, literally maids coming to the home and saying, “We’re collecting for a pantry here locally. Can I leave this bag with you? And I’ll pick it up next week when I’m here to clean.”
Dr. Ben Litalien, FranchiseWell (24:32):
And the number of tons of food that was gathered from a system of under 200 franchisees, it was overwhelming. At their convention they showed an image of how many times it would’ve wrapped around the world, the amount of food they collected.
Dr. Ben Litalien, FranchiseWell (24:50):
And it was a way that a franchisor with a network could connect with their community in such a powerful way. Now, my wife is a client and I didn’t tell her about it. And so they came to the door and then they said, “Oh, we have this bag.” She said, “Oh yeah.” And she said, “Give me another one.” And they’re like, “Okay.”
Dr. Ben Litalien, FranchiseWell (25:10):
They’re assuming she was going to fill two. No, she took it to the next door neighbor and said, “Hey, our maid service is collecting. Would you like to fill a bag?” That’s connecting in a whole different way with your community than just sending out a valpak like, “Hey, we do maid service.”
Dr. Ben Litalien, FranchiseWell (25:28):
I can tell you that that neighbor, if she was going to use a maid service, that’d be the only one she’d even consider. Right. So this is an easy way for franchisors to take their brand and their network and to get together and say, “Hey, what do we care about as a system? And then what can we do make a difference?”
Dr. Ben Litalien, FranchiseWell (25:48):
And, oh my God, can imagine amount of power we could release if system after system would rally around trying to make a difference in their local community?
Dr. Ben Litalien, FranchiseWell (25:58):
Franchising, it doesn’t matter how big it gets, it’s a social construct. It’s a local construct and giving franchisees the opportunity to participate in something that makes a difference in their community is powerful on lots of ways. So that’s one.
Dr. Ben Litalien, FranchiseWell (26:14):
Another example is Engineering for Kids. We formed a foundation Engineering for Kids Foundation and that 501c3 gave us the opportunity for franchisees to go in the local community and to look for sponsors because the STEM education program that they offer generally goes to middle and upper income kids, not Title One schools.
Dr. Ben Litalien, FranchiseWell (26:41):
But those kids need STEM education as well. So they were able to use the foundation to gain sponsors that would support running programs in Title One schools. Taking it to kids who otherwise would not have the opportunity to participate, powerful.
Dr. Ben Litalien, FranchiseWell (26:57):
And then this is a couple of examples of how franchisors could truly, if they just put some time into thinking about how they could interact in their local community and make a difference, social franchising could really scale quickly.
Tom DuFore, Big Sky Franchise Team (27:13):
Yeah. And it’s a great point. It’s my favorite thing about franchising. I have a lot of favorite things, but my favorite is the tie into the local community with the local owner and the local community.
Tom DuFore, Big Sky Franchise Team (27:27):
It might be a national or a regional or an international brand, but it’s owned by someone who’s probably living in that community. Their kids go to the same schools, they go to church together, whatever, they’re ingrained in that community there.
Tom DuFore, Big Sky Franchise Team (27:42):
And to your point, I love the example of the local food bank. How many local food banks benefited from that? And all the people it’s able to support, it’s incredible.
Dr. Ben Litalien, FranchiseWell (27:53):
Yeah. The number of articles written in the local community was overwhelming. It was like almost every franchisee had an article. And it was not stimulated by them. They didn’t go looking for it. It was the food bank calling up and saying, “Hey, look what these people did. This is amazing.”
Dr. Ben Litalien, FranchiseWell (28:12):
It was really cool. And it’s funny, because I have Rob the CEO over there in the Georgetown program, I have an all star cast of guest speakers, unbelievable. Guys like Rob Weddle, the CEO of Authority Brands, they’re a powerhouse. Right.
Dr. Ben Litalien, FranchiseWell (28:31):
But he comes as a guest speaker and talks about that program, right. Under the social franchise section because it’s so inspiring and it wasn’t difficult to do, it was a commitment, it was changing our minds a little bit.
Dr. Ben Litalien, FranchiseWell (28:46):
A word I love and I share a lot called metanoia, Greek word that means shift of mind. I thought this way before and now I think this way. We just need more social thinking in our franchise leadership and we would be able to do some of these things, so.
Tom DuFore, Big Sky Franchise Team (29:02):
Well, it’s well said and I appreciate the of work you’re doing and have done and continue to do because it’s significant. And I appreciate it. And thanks for sharing that with our audience.
Tom DuFore, Big Sky Franchise Team (29:15):
Well, as a great transition point here, before you go, I’d love to make sure we ask you the same questions we ask every guest. And the first question is about a miss and have you had a miss or two along your successful journey here and maybe something you learned from it?
Dr. Ben Litalien, FranchiseWell (29:34):
Yeah. As I thought about that, the first thing that came to mind was I have had the very fortunate opportunity to work with a very broad array of franchisors over the last 30 years now.
Dr. Ben Litalien, FranchiseWell (29:53):
And so I’ve gotten to get inside and see what a lot of people never get to see, right. So a week ago I was in Denver for three days with 25 executives from Snap-on Tools. And they’re a huge franchise system, very successful, what a powerful brand, right?
Dr. Ben Litalien, FranchiseWell (30:13):
And I’m three days with this group just diving into franchise and the franchise model and whatever. And as we went around the room, 12 years, 24 years, 18 years, the legacy of being with that same brand for a long time.
Dr. Ben Litalien, FranchiseWell (30:33):
The miss that I think about is that very first franchise Flying Colors. Why didn’t I just stay there and take it to mega size? Or [inaudible 00:30:44] cafe, man, I loved it. It was so ahead of his time I think, but why didn’t I just stay and take it to mega scale?
Dr. Ben Litalien, FranchiseWell (30:52):
I worked with Re/Max, Dave Leonard, he’s a guy that came up with a concept, used franchising and scaled it to mega size. I got to spend time with Fred DeLuca who came up with a concept and I look at everything I know now and think, “Man, I wish I could have built a mega brand. It’s so iconic.”
Dr. Ben Litalien, FranchiseWell (31:14):
And I’ve gotten to work with so many. I remember sitting with Bill Rosenberg at a table once at the IFA, just sitting there having a conversation with this guy who did one thing and just blew it out.
Dr. Ben Litalien, FranchiseWell (31:29):
And so for me, the biggest miss, I think about it all the time as I’m working with entrepreneurs or building concepts and growing systems, I think, “Man, that would’ve been cool to have stayed with something and taken it fully to scale.” So.
Tom DuFore, Big Sky Franchise Team (31:46):
Yeah. Yeah, no, I appreciate that. Thank you. Thank you. And what about a make? You’ve shared a lot of great stories already, but is there anything that stands out in your mind?
Dr. Ben Litalien, FranchiseWell (31:58):
Yeah, I say the one that really catapulted my understanding of the power of the franchise model. I had sold, I think the fourth franchise that I had developed and built, and again, I never planned on selling any of these companies. It just happened.
Dr. Ben Litalien, FranchiseWell (32:17):
But as I was looking for another concept to franchise, Exxon and Mobil had merged, and Exxon had inherited, if you will, this convenience store franchise that Mobil had called On the Run and they had about 120 dealers in the Mobil network. And a dealer had one or maybe two locations, but basically owner operator.
Dr. Ben Litalien, FranchiseWell (32:45):
But Exxon was built on distributors. Their average distributor had like 70 convenience stores. So totally different culture, environment. And for a couple of years, they tried to get the Exxon distributors to participate in the Mobil On the Run franchise concept.
Dr. Ben Litalien, FranchiseWell (33:05):
And so the guy that had became the president of retailer, whatever, called me and said, “Hey, we can’t figure this franchise thing out. I know you know franchising. Can you help us?” I was like, “Wow, this’ll be fun.”
Dr. Ben Litalien, FranchiseWell (33:18):
I hadn’t thought about going into consulting at that time. I was looking for another concept to grow in franchising. So I went up to Virginia to talk to them about this and we have all these meetings and talk about it.
Dr. Ben Litalien, FranchiseWell (33:32):
And he’s like, “When can you start?” And I was like, “Start what?” And he’s like, “Well, you need to move here and take over franchise.” I was like, “I’m not going to move to Virginia. What are you talking about? My wife’s from Texas, all three kids are born in Texas. There’s rules about taking people out of Texas.”
Dr. Ben Litalien, FranchiseWell (33:53):
But anyway, long story short, he convinces me that I got to do this. So we literally pack up the family, move to Virginia. And I created a new model that resulted in 1000 franchises in four and a half years.
Dr. Ben Litalien, FranchiseWell (34:13):
Won the Convenience Store of The Year Award and on and on and on. It just was a phenomenal experience. Now, granted, they had an unlimited budget. He told me, “Look, you can’t outspend us. Whatever you need. The outcome will be worth it. Just do whatever you got to do,” so that was helpful.
Dr. Ben Litalien, FranchiseWell (34:33):
But basically created a model just for distributors separate from which I called the regional developer Mob. And designed it and developed it specifically for them and gave them the economic incentive to participate.
Dr. Ben Litalien, FranchiseWell (34:53):
And it was just amazingly fun to go along for a ride. And you look at some of the brands that are out there that have done like 1000 units in five years, like, Five Guys or Orange Theory. What an amazing ride.
Dr. Ben Litalien, FranchiseWell (35:09):
And yet from that I realized I didn’t want to work for ExxonMobil for the rest of my career either. Right. It’s like, I’m not a corporate guy. I’m not a company, man. I’m something else. I don’t what maybe I am. But too entrepreneurial, too ADD, I don’t know.
Dr. Ben Litalien, FranchiseWell (35:28):
And that’s when basically decided to start Franchise Well and move into the teaching and consulting space. So that was a huge make that I’m very proud of and really glad I had the opportunity to do.
Tom DuFore, Big Sky Franchise Team (35:43):
Yeah. Oh, that’s amazing. I love that. And I definitely relate a little bit. Had an opportunity to be part of a regional brand growing nationally. When you’re in that, you know something special’s going on, and then when you look back, you say, “Wow, that was really, really incredible.”
Dr. Ben Litalien, FranchiseWell (36:03):
Yeah. It’s awesome.
Tom DuFore, Big Sky Franchise Team (36:05):
Well, this question which we ask, the next one’s about a multiplier. And has there been a multiplier you’ve used in your career or in growth that you’d like to talk about?
Dr. Ben Litalien, FranchiseWell (36:20):
I’ll tell you The Fifth Discipline, reading that book. I don’t think we’d be having this conversation. I think my life would’ve taken a whole different trajectory had I not read that book.
Dr. Ben Litalien, FranchiseWell (36:34):
Every company I’ve had, everybody had to read that book. We talked about it because if you have not read that book, it’s hard for me to imagine what your understanding of the franchise model is and how it should work. It’s that impactful.
Dr. Ben Litalien, FranchiseWell (36:56):
Every class I’ve ever taught, every group, I go to the Philippines and I do CFE courses. I go to Europe and do courses for the BNI Master Franchise Network. I’ve taught all over the world, six continents, franchising, and no one do I fail to introduce that book to.
Dr. Ben Litalien, FranchiseWell (37:17):
And by far, I think I can count on one or maybe my two hands, the number of people that have actually read it that I’ve encountered working in franchising. And so I think for many that’s the multiplier.
Dr. Ben Litalien, FranchiseWell (37:30):
If you don’t do anything else, man, reading that book will help you frame in what franchising really is as a business model. It’s a system of systems and understanding that, you are going to extract much more value using it.
Tom DuFore, Big Sky Franchise Team (37:46):
Yeah, no, that’s a great point. Great point. I love that. And I think back to hearing you describe that. For me that moment was when I read The E-Myth and talking about systems and processes, and what if you had 1000 of these or 10,000, how would you run your local business differently?
Tom DuFore, Big Sky Franchise Team (38:06):
And that was like that mind shift that you described where it was like, “Ah, I see this is all clicking. It makes sense.” Well, the last question we like to ask everyone is what does success mean to you?
Dr. Ben Litalien, FranchiseWell (38:23):
Success for me was to create a life where I get to spend time with the people I want to spend time with, doing things that I love and feel I’m good at and going down the path of having Franchise Well, having my wife and my two daughters work with me every day.
Dr. Ben Litalien, FranchiseWell (38:44):
And that also have attracted consultants that I think are incredibly talented and have a common mindset, gives us an amazing opportunity to work with some incredible people and to evolve some incredible concepts and you get up every day looking forward to whatever’s on the docket because of the people that you’re with and the work that you’re doing makes a difference. So that’s how I would describe success.
Tom DuFore, Big Sky Franchise Team (39:17):
As we draw to a conclusion here. Is there anything you are maybe hoping to share that you didn’t have a chance to say?
Dr. Ben Litalien, FranchiseWell (39:24):
Yeah. I appreciate what you’re doing, Tom. I think we need more and I’m happy to see more happening in the franchise space around sharing.
Dr. Ben Litalien, FranchiseWell (39:35):
When I first got on franchising, franchisors were fairly exclusive. They kind of kept to themselves. We would meet at the franchise convention, but no franchisees were allowed and suppliers were limited.
Dr. Ben Litalien, FranchiseWell (39:48):
And it just wasn’t very diverse and not sharing. We’re in the franchise business, we’re not competitors, our franchisee, we may have competitors underlying, right. But franchisors, the openness now that’s taking place, the sharing, comradery, programs like yours where people are learning and hearing other viewpoints and hopefully very valuable information. I really appreciate and I’m thankful for seeing that starting to come to light.
Dr. Ben Litalien, FranchiseWell (40:23):
Education wise, we’re seeing a lot of good initiatives. Dr. John Hayes down at Palm Beach Atlantic with their franchise program educating. Now, the next generation coming right out of college with a degree with some franchise foundation. At University of Louisville the programs that Young now is sponsoring there to promote franchise education.
Dr. Ben Litalien, FranchiseWell (40:55):
Just for a long time, I feel felt like kind of a little bit on an island with the Georgetown program, there just wasn’t much out there that I would say that was highly regarded or that had a basis in academia.
Dr. Ben Litalien, FranchiseWell (41:11):
It was all just kind of ad hoc and experiential, which that’s not bad, but it’s not complete. And so just really happy to see. If you make your living in the franchise sector, you owe it to yourself to be a lifelong student of the franchise model. The better you understand it, the more value you’re going to extract no matter what role you play in your organization.
Dr. Ben Litalien, FranchiseWell (41:36):
Appreciate you doing this, Tom, and creating this voice for franchising. And you’ve had some amazing folks on here and you’re sharing a lot of good things with the network in the community, so I appreciate it.
Tom DuFore, Big Sky Franchise Team (41:48):
Dr. Ben, thank you so much again for being a guest on the show. So grateful for your time and for you sharing your insight with us today.
Tom DuFore, Big Sky Franchise Team (41:56):
So let’s go ahead and jump into our three key take aways. Take away number one is when Dr. Ben shared that franchisors oftentimes are trapped in the operation of their main business and forget that they’re in the franchising business. And I know that’s a something that I see frequently with franchisors and clients we’ve worked with as well.
Tom DuFore, Big Sky Franchise Team (42:17):
Take away number two, franchising is a system of systems, a system of systems, and he talks about it being a training system, development system, operational system marketing system, and how all of these systems work together that cannot operate in a silo.
Tom DuFore, Big Sky Franchise Team (42:35):
And he talked about how his aha moment of recognizing that came many years ago when he read the book The Fifth Discipline. If you haven’t read it, it’s a fantastic book by the way.
Tom DuFore, Big Sky Franchise Team (42:46):
And take away number three, is that the better you understand franchising, the more value that you can extract no matter what your job or your role is in franchising. So the better you understand franchising, the more value you can extract. So continue learning.
Tom DuFore, Big Sky Franchise Team (43:02):
And now it’s time for today’s win-win. So today’s win-win is that franchisors should be thinking about what the brand, as a whole composite, can be doing to make a difference in the world.
Tom DuFore, Big Sky Franchise Team (43:20):
Maybe another way to say that is through a question, what are ways your franchise system can make an impact on your local community in a positive impact?
Tom DuFore, Big Sky Franchise Team (43:30):
And Dr. Ben shared a lot of different stories and examples of clients he’s worked with that have done food drives and giving back. It’s really great. And so that’s the episode today, folks.
Tom DuFore, Big Sky Franchise Team (43:43):
Please make sure you like and subscribe to the podcast and give us a review. And remember if you or anyone you know might be ready to franchise their business or take their franchise company to the next level. Please connect with us with Big Sky Franchise team.com. Thanks for tuning in and look forward to having you back next week.