#Clockedin with Jordan Edwards

#253 - Good, Better, Best: Life Lessons from a Business Legend

• Jordan Edwards • Season 6 • Episode 253

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Bob Gappa has built one of the most influential franchise consulting firms in the world, working with over 1,650 franchisors across 14 countries during his remarkable 50-year career. His fundamental insight? We've got the purpose of business all wrong.

"The purpose of a business is to get and keep customers," Gappa explains, challenging the profit-first mindset dominating boardrooms worldwide. This perspective shift transforms how successful businesses operate, from compensation structures to customer service approaches. Most revealing is his observation that the employees with the greatest impact on customer satisfaction—those on the front lines—are typically the lowest paid in the organization.

Drawing from his experiences reorganizing operations for Catholic bishops post-Vatican II to helping Middle Eastern businesses expand through franchising, Gappa shares wisdom applicable to entrepreneurs at any stage. He advocates for focusing on predictive analytics rather than lagging indicators like profit and loss statements, tracking metrics like customer acquisition, retention, and frequency that truly forecast business health.

Gappa's personal journey includes a pivotal moment when, down to his last $75 during a recession, he invested in a small newspaper ad rather than a night out. That single decision led to a quarter-million-dollar contract that launched his franchising career. "Being close to bankruptcy caused my success," he reflects, highlighting how persistence through adversity often precedes breakthrough.

For today's business leaders, Gappa distills his half-century of experience into actionable advice: clarify core beliefs between partners, understand the fundamental difference between creating the future (CEO's role) and making it happen (COO's role), and recognize that comfort is the enemy of growth. Most importantly, he urges finding something greater than yourself to excel at—something that improves others' lives while bringing you fulfillment. Discover more about transforming your business approach at mgmt2000.com.

To Learn more about Bob: 

Linkedin: https://www.linkedin.com/in/robert-gappa-cfe-62aa6310

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Email: Jordan@Edwards.Consulting

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Linkedin: https://www.linkedin.com/in/jordanedwards5/



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Complimentary Edwards Consulting Session: https://calendly.com/jordan-edwardsconsulting/30min

Speaker 1:

Hey, what's going on, guys? We've got a special guest here today. Today's guest has built one of the most influential franchise consulting firms in the world Management 2000. He's worked with 1,650 franchisors in 14 countries over 50 years. He's helped founders become CEOs. It's Bob Gappa. He's here to break down how the right mindset, systems and people can turn a small business into a nationwide empire. Bob, we're so excited to have you on the Hashtag LockedIn podcast. What is the reason, purpose and result of any business?

Speaker 2:

Well, the reason for a business is economic performance and rather than say profit or whatever, it's economic performance. And economic performance always has to do with the purpose of a business. There's only one purpose for a business and people get this so wrong. Purpose for a business and people get this so wrong. Uh, when I give keynote addresses and uh, for business people, the first slide I put up is what is it as a business person that you want more than anything else of? You want more of, and nobody says the word that they should say that's customers. They want more customers.

Speaker 1:

They all say money and's customers. They want more customers.

Speaker 2:

They all say money and profit and you go. Well, where does that come from? And they look like the little dog in the window bobbing up and down. They don't know the answer. They don't know that customers are the purpose of business to get and keep a customer. Now the result of a business is that that customer is satisfied. Yes.

Speaker 2:

And I think that the Rolling Stones song I Get no Satisfaction is because people don't really know that the result of a business is a satisfied customer and a lot of people think customers get in the way of what they do customer and a lot of people think customers get in the way of what they do.

Speaker 1:

Uh, yeah, I mean it's. It's. It's truly awesome that you bring that perspective because, you're absolutely right, there's so many people that are looking at this in the completely wrong way, and that's why, when, when we actually met at the uh, the loyalty brands conference and you were explaining to us how to learn, how to take all the information in and we had that project, it made me sit there and think I'm doing everything backwards. So what do you see a lot of these new business owners doing, or even conditioned, seasoned ones doing, where they're really just missing the ball or maybe they're making a mistake on it really just missing the ball, or maybe they're making a mistake on it.

Speaker 2:

Well, they really think that the purpose and the result of business is money and profit, and so they want to cut expenses, for instance, and pay people the least amount they can possibly pay them, and usually the people who are paid the least have the biggest impact on the company really uh and and and.

Speaker 2:

What they're trying to do, though, is make money and profit, not customers, because if, if you look at at the acquisition cost of a customer and then you look at retention, percentages and frequency, retention and frequency and word of mouth promotion of that company are all around the least paid person, making that person feel like they should come back here. No-transcript, because those are the metrics that are called predictive analytics. Most people pay attention to lagging metrics they get their P&L 90, 30, 60 days after that particular period is closed, but the predictive analytics to follow are more important, like new customer acquisition, new customer retention, new customer frequency, existing customer retention, existing customer frequency and employee turnover and employee satisfaction and customer satisfaction are the metrics you want to track.

Speaker 1:

Interesting. So we're all looking at it backwards, we're all doing it incorrect.

Speaker 2:

If people had read or got exposed to Peter Drucker, who really he is a national gem, a global gem that we don't pay much attention to because he's too simplistic in his approach. Yeah. And one of his jobs, one of his first jobs in America was to reorganize General Motors. Oh, wow. And so he said to them if you want to sell more cars, you have to go out and ask the customers what they're going to use it for. And he said then design a car that they want to buy.

Speaker 1:

So work backwards? Yeah, instead of trying to create a product and bring it to market, it's go ask everyone what they're interested in.

Speaker 2:

And so Covey. Stephen Covey took that Drucker principle and turned it into begin, with the end in mind. Yes.

Speaker 2:

And look at the big rocks and the medium rocks and the small rocks. And so when you're growing a business at Loyalty Brands, we have three what are called strategic imperatives. In other words, nothing's more important than these three things. You have to either open locations, whether you're franchised or not, or you have to grow the business if you don't want more locations, but you have to grow. The second thing you have to do is have happy, satisfied employees who look forward to coming to work. And the third thing is you have to have fanatical fans, and so the way that you treat the employee is going to affect the way they treat the guest, and the way they treat the guest determines if the guest comes back or not. And so why wouldn't you pay those people more than almost anybody else in the company? Yes.

Speaker 2:

And so in any business, it's almost 100% the case the people that have the greatest impact on the future of your company are the least paid people. Whether it's a flight attendant or it really doesn't matter, because it's Even the people at the drive-thru, exactly, and people don't.

Speaker 2:

Yeah, or the Starbucks person, the barista, these people that, these are the people delivering the brand. If you hit these metrics, the person who's designing this offer to the team members has already done the work and they know that they can afford this. If you increase the number of new customers and the retention and the frequency and the satisfaction, you can get up to half your paycheck that year in bonus.

Speaker 1:

Oh wow, that's a great idea.

Speaker 2:

And it's affordable if they do that.

Speaker 1:

Because it's incentivized, and then they know why they're there Instead of being like I have to do another shift. And now you have another 15-year-old, 16-year-old, running an ice cream shop Exactly when they're doing all the scooping. But if they're incentivized to go hey, if I can get these people to come back because we have a tracking mechanism these are now all wins, Absolutely.

Speaker 2:

And you have to tie the personal goal of that team member to the incentive. You have to say to them what is it that you'd like to buy? If you could make X amount of money and then 50% of that as a bonus, what would you like to buy? And so you get them motivated that at the end, the result is going to be not the metrics. The result is what they can now buy.

Speaker 1:

Because now they see themselves going let's use the high schooler for example yeah, I'm gonna buy myself a car or if you're a guy, you want to get an old truck yeah, whatever it is, yeah whatever it is.

Speaker 1:

Whatever it is but it gets the people excited about coming to work. And now it's not. I'm just a scooper at the ice cream shop, but now I'm a person on a mission here and I'm really identifying with customer service. So, Bob, you have had so much experience 1600 plus franchisors. Where did this journey begin for you? Was it sunshine and rainbows? Did you get handed accounts left and right? How did this journey start for you?

Speaker 2:

Well, the business journey started with my being the only non-cleric in the Catholic Church. That was a consultant to the 235 Catholic bishops in the United States after Vatican II, and they were reorganizing the way that they treated their customers, and so they dropped Latin, they turned the altar around, they had guitars come in. You didn't have to genuflect. There were all kinds of changes because nobody was coming to church anymore Really, and so they had to reorganize the operating system to make it more satisfying to the customers. So they came in because you can look at religion as a business, because the business is salvation.

Speaker 2:

Yeah, business is salvation, and so what we're trying to do is create an opportunity for people to feel good about being saved, and what we want to do in a secular business is figure out what our business is and then say we need more and more customers to come in here. And one of the first people who grasped the concept of customer as the end result was Sewell Cadillac in Dallas. He wrote a book maybe 20, 25 years ago where back then, when he wrote that book, he said that the average customer buys 25 cars from us over a lifetime. That the average customer buys 25 cars from us over a lifetime and they spend in those dollars about $500,000 with him and he's still in business today in Dallas.

Speaker 1:

Instead of it thinking, oh, we're just going to get one sale, maybe we can mark them Exactly. It makes a huge difference. You're going to treat the people differently if you know they're going to come back 25 times.

Speaker 2:

Well, as Drucker said, there are only three questions you need to answer to be successful. Who are our customers? What do they value? How do we enhance what they value? That's how you build your operating system.

Speaker 1:

Yeah, I love that. And how do you think about results for a lot of these people over? Or are the people the special ingredient there, or is it the systems, because you've seen so many different franchises? What kind of is holding people back or holding some of these franchisors back?

Speaker 2:

Well, what's holding franchisors back in franchising is that almost every franchise company was founded by somebody who never worked for a real company, and a real company understands that management is a science. It's not just the way I do things around here, and that leadership is an art.

Speaker 2:

Yes, and that leading people is not a simple thing, especially in today's environment, where people want to be engaged and they want to be involved in decisions that affect them and they want to know what the end result is that they're paid for. You would be actually, I think, surprised if you whenever let's just say that every time you spend money in a place, you personally, you ask that person what they're paid for. You'll be shocked at the answer. Most people give you an activity. Yes.

Speaker 2:

And the simplest example of this is if you have a file clerk who's got a bunch of files and their job is to file those files and you say to them what are you paid for? They will say to file these documents, when in fact they're paid so the documents can be found. That's the result of filing and that's the case. And the most generic answer to somebody who is face-to-face with a customer on what they're paid for is to create an experience for you, the customer, the guest, that makes you want to come back here or to one of our other locations.

Speaker 1:

Makes sense.

Speaker 2:

And, and, and, and today, what we want today, and I don't know if you've noticed this, but more and more we don't want to talk to any human beings anymore. And so if you think of amazon, uh, amazon, you've never talked to anybody anymore, unless you've got a reason to, and then you can call their customer line. But but, they make it easy to buy. They're not selling things, they're letting you buy stuff, and that's a very interesting change in in in the world. Uh, and qbc is the same thing. They, they don't. They don't sell you anything, they just show you stuff to buy.

Speaker 1:

Yes, and people are starting to realize that it doesn't. People will buy on their own, they just need the possibility to buy.

Speaker 2:

You have to make it easy. So on Amazon, 24-7, 365, you can buy as much as you want. Yeah. And the other thing is in today's world, what you have to ask yourself is do I make it easy for people to buy from us?

Speaker 1:

And if you don't have a pay link, you don't make it easy you don't make it easy.

Speaker 2:

For instance, one of our clients right now is a $1.6 billion company in the distribution business and they now have people come in at two o'clock in the afternoon to load the trucks that are going to go out at 4am to deliver products to their customers at eight o'clock when the store opens oh, wow and they never did that before but they had to to make it easier for the customers because otherwise they'll go with other people it's very inconvenient for them to do that

Speaker 2:

for sure and most people don't do what's inconvenient for them yes but? But to win today, what you have to do is make it easy for the customer to buy from you by asking the questions who are our customers? What do they value? How can we enhance what they value?

Speaker 1:

yeah, I'm sorry.

Speaker 2:

It makes a lot of sense because the better questions we ask, the better results we're going to have and actually when you say it makes a lot of sense because the better questions we ask, the better results we're going to have, and actually when you say it makes a lot of sense in both spellings S-E-N-S-E and C-E-N-T-S.

Speaker 1:

That's awesome. That's awesome. So for you, has there ever been a time where you struggled with some of these concepts or you might have had a rough start or a rough challenge in business, because you've been around since, I believe, 1981 yeah, that's 45 years, 44 years. Most people never make it in business more than like five years.

Speaker 2:

So I know and to answer your question.

Speaker 2:

The concepts have never been doubted. The environment in which you do business sometimes makes you do a recession. Businesses don't want to hire consultants You'd think they would but they don't because money is so tight. They're sure not going to spend it on a consultant. And so there were three or four times when there was a recession, when it got really tight whether or not we'd exist. Recession when it got really tight, whether or not we'd exist. And I remember the first time was when I was in business, about five years or so and maybe less, and a huge recession hit in the early and mid 80s and I was in Houston and here's the way I knew it was bad. Back in those days, pre-digital, people actually used the yellow pages to find you. And the year before the recession in the yellow pages in the Houston phone book there were 21 pages of three columns each under management consultant Okay, after the recession there were seven pages.

Speaker 1:

Oh, wow.

Speaker 2:

And at one point I had $75 left. Oh, my God.

Speaker 2:

And I thought let's go to a steakhouse and get drunk or let's spend it in the Houston Business Journal. So I called the Houston Business Journal and I said how big of an ad can I get for 75 bucks? And they told me and I said I'll take it and I put in the ad three free days of consulting call. One person called and, to make a very long story short, that turned into an engagement that got us into a partnership with them. The person who called and it resulted in my going into franchising, which I've been in the rest of my life, and that was a quarter million dollar contract. We got the two of us when we worked together after that $75 ad. And I'm here because I was close to bankruptcy and put that ad in and he called, otherwise we never would have got to know each other. So being close to bankruptcy caused my success.

Speaker 1:

I love it and it's such an eye-opener for all of us because we sit here and think I'm going to make it or I'm not going to make it. We're going to do this and people don't realize that there's so many ebbs and flows in business and it's not always easy, but it's who can survive the longest and that's why I love that you shared that story with us, bob.

Speaker 2:

I mean, what you have to do is realize, if you're in business for yourself and I got this from other people, not me there's 10 words that have two letters each. If it is to be, it is to be me, you've got to make it happen, and you have to be so committed to what you're doing that you absolutely know that you don't want to work for somebody else, and that is the motivation that makes you successful is persistence. Absolutely.

Speaker 2:

You want to be in business for yourself and your motivation is to have fun improving lives, not changing lives, because sometimes that can be negative. But improving a life can't be negative yeah and so, uh, I I always want to start uh conversations with people that become our client with what are your personal goals and what's really important to you.

Speaker 1:

And most people are probably so caught off guard by that.

Speaker 2:

Yeah, it's interesting that you say that, because I think people who are really successful know the answer to that. When they're 10 years old they may not be able to articulate it like they do when they're 50, but I think they know Absolutely. I'll give you an example If you're in Cub Scouts and Boy Scouts, you're learning at a very young age to be of service to others.

Speaker 3:

Yes, at a very young age to be of service to others.

Speaker 2:

Yes, you're learning at a very young age that the way to get results is use process, that systems are important, that working with others on a team is important, and whether it's in Boy Scouts and Cub Scouts or whether it's in Little League or whether no matter what it's in little league or whether no matter what it's in the sooner you can get a youngster involved in teamwork, the chances of them going stray off some other path is minimized really it's interesting.

Speaker 1:

it's really interesting. The other thing that I was thinking about was how do you feel about this idea of comfort, because a lot of people are just trying to get comfortable. They don't want to work hard, they're not excited. You see it a lot with my generation. What do you think about all that? Do you think it's dangerous or it's good?

Speaker 2:

that. Do you think it's dangerous or it's good or well? I think that that that if, if somebody knows where they want to be at a certain point in life and they reach that point and they can be happy the rest of their life doing just that, I think that that's wonderful. But once they do that, they aren't going to be able to get anything else. And so comfort is the enemy of growth, it's the enemy of change, and there aren't many people who can remain comfortable their entire life because we live, because being a human being, assuming that we evolve or are as the same as the planet we live on, the planet we live on is full of storms and earthquakes and famine. And if you look at most human beings' life, we all experience earthquakes and famine. And then we have wonderful things and we have spring and fall and harvest.

Speaker 2:

But the point is that being a human being and going through life and is really having to understand that one of the most important skills is how you react to something, not how you make something happen. But most decisions are in reaction to something, not in acting. I mean, if you just go through every single day of your life and just pick one and you say how many times today did I act to make something happen and how many times did I react to somebody else or something else? And, like right now, out in the driveway, my windows are down in my car and it's predicting a 40 chance of rain. Okay, so if I look out the window and it starts to rain, I have to go out and close my car windows so I reacted.

Speaker 1:

There's a ton of reactions I'm reacting to your questions absolutely, and I was just thinking about that as you were saying that. It made me realize the amount of times where opportunity comes your way and you're reacting. Most of us have a default reaction of opportunity and we say no, which might be the right thing or the wrong thing, but there's many times in people's lives where maybe saying yes would make it a better opportunity Absolutely.

Speaker 2:

And the word opportunity. If I, if I could change a couple of things in school, I would find a way to create the opportunity to teach people how to think about opportunities.

Speaker 1:

So let's run the school right now. How would you run opportunities? How would you think? How should people be thinking about them?

Speaker 2:

I'll give you an example. Okay, so let's talk about the difference between a CEO and a COO. Absolutely.

Speaker 2:

Okay. So if you ask most people what a CEO does and what a COO does, they'll go. I don't know. O does they'll go, I don't know. And so I've decided a very simplistic answer. The job of a CEO is create the future. The job of a COO is make the future happen. So most CEOs come from operations, so they're used to making things happen. How do I make it more efficient? How do I make it more effective? Now they're a CEO and their job is to look for opportunities, and they've never done that. Well, how do you know an opportunity? They're usually 10 or 12 facing you every day that you don't recognize because you don't know how to look for an opportunity. And so you've met John Hewitt. Yes.

Speaker 2:

John Hewitt is the consummate opportunist. He'll try 10 things and see if five work.

Speaker 1:

Because he's okay with failure.

Speaker 2:

Well, failure is the best way to succeed.

Speaker 1:

So these are reframes that are so helpful for the audience and people listening that it's not that your first time you're going to try something. It's going to work. It's okay to fail. That's why I'm excited to have you on, bob, because the audience can sit here and realize wait, I'm looking at the world the wrong way. There's a much healthier way to look at this you know I was.

Speaker 2:

I was listening yesterday to the podcast you had with the lawyer from houston, oh, yes, uh, and he said the same thing yeah on the podcast is that the most important thing in success in his life was learning from failure.

Speaker 2:

Yes, and he would say I, I talked to the jurors. Uh, I invite them to my office so I can learn what they liked and didn't like about the presentation I gave, and that's how I get better. Absolutely, uh. And because if, if think about this a minute, if we knew, I think, if 99% of us knew what we needed to do to get better we'd do it.

Speaker 1:

I believe the same thing.

Speaker 2:

But we don't know how to get better, and my mother who lived to be 103, had a saying that she gave me when I was very small, and it went like this Good, better, best. Never let it rest till the good is better and the better is best. And then the best becomes good. So, good, better, best. Never let it rest till the good is better and the better is best. So you're always looking for ways to improve your craft. Yes, and that's something that when you spot it, no matter what the age of the person is, when you spot that, you watch that that man or woman is going to be a success.

Speaker 1:

Because they can spot the opportunities and see the iterations and see how to get better at things yeah, because they're.

Speaker 2:

they're never satisfied with where they are, and I always say I always think of the olympics, where the difference between the first, second and third place in almost anything is sometimes a fraction of a second these days. Yes, and how disappointing it must be to be second or third, even though you're happier, at least second or third. Yeah. But, but, in, in, in. In our culture being second is dramatically not as cool as being first you're absolutely right and people.

Speaker 1:

But the thing is, when most people the challenge I've been thinking and this is something I've been thinking about recently is that a lot of uh, a lot of things I've been seeing. One person wants to think literally where it's yes or no. So it's like you run a podcast, yes or no, and then it's yes or no. So it's like you run a podcast, yes or no. And then it's like are you good at podcasting? Yes, they're good or no, they're not. When in reality there's a huge scale, like you're explaining, and to get to that 99.99% area where you're at the very end and you are the best of the best, that could be thousands of hours difference than the person who's in second place. It's so many more hours that are required to be the best and people don't realize that.

Speaker 2:

And in business. It's amazing how many business owners never ask their team members on the front line. They never sit down with them on the front line and ask them what are we doing that gets in the way of the customer being more satisfied. And at this point, one of the publications I look at and read is Nation's Restaurant News, because a lot of our clients franchise in the food business and in every issue of Nation's Restaurant News they list the publicly traded companies and how they're doing. And in casual dining, chili's currently is the only restaurant chain in that segment that's growing.

Speaker 1:

Why do you think that is?

Speaker 2:

Well, thank you for asking that softball to me. I watched an interview with the new CEO of Chili's new, in the sense of three years. The new CEO of Chili's new in the sense of three years.

Speaker 2:

And this was when and this is they're interviewing him and saying why is Chili's the only restaurant chain that's growing? And he said well, I'll tell you what I did when I came in, I went to every single restaurant and sat down with all the teams and I said what are we doing that's getting in the way of making it easy for customers to come back and to be here? And he said we found out by just listening that we were doing stupid stuff. It's like the old story about why do we cut the end off the meatloaf. He said because our great-great-grandmother did. He'd say well, why did she cut it off? And she said because it wouldn't fit in the pan.

Speaker 3:

Absolutely, grandmother, did you'd say, well, why did she cut it off?

Speaker 2:

and she said because it wouldn't fit in the pan absolutely. And so, five generations later, we still cut the end off the meatloaf. Well, it's stupid. Yeah, it was, it was what she needed to do, but we don't have to, and so if you stop doing that, it has a positive effect. And so he said we, we changed. We changed many, many things and started many, many things that. And then we started talking to the customers and what they wanted and what would make them happy and what roadblocks we put in their way. And all of a sudden, two or three years later, we're growing and no one else is.

Speaker 1:

I actually I heard about this. I don't know if you've heard about their new dish, the triple dipper.

Speaker 2:

Oh, yes, well, I go there and get it.

Speaker 1:

So I didn't realize this. But I was in Key West last weekend and I was talking to some buddies and he's like dude, have you heard about Chili's? I'm like what do you mean? Of course I know Chili's and he's like no, chili's is like hot. They're different because they have the triple dipper and it's like 20 bucks and you get like 10 things. People are over the moon about it. They're like we must get triple dippers and it's. It's captivating and then it allows for the social media and the different areas. But you're absolutely right, I didn't even think about Chili's. I talked about it last weekend. You brought it up. The newspapers are bringing it up. It's incredible what you can do and how you can change if you just talk to your customers and see how can we serve you guys better.

Speaker 2:

And your team members.

Speaker 1:

Yes.

Speaker 2:

They know what we're doing. That's stupid. Absolutely. And again you're most likely dealing with the people who get paid the least yes to create revenue, to, to get and keep customers. Uh, and it's, you know, it's absolutely amazing, and if you here's another thing that if you haven't heard this, you're not going to believe it, because it shouldn't be believable- yeah. But you can actually verify this with AI and Google. Okay.

Speaker 2:

The drive-thru Chick-fil-A's yes. The ones with drive-thrus. What do you think the average unit volume is of a drive-through? But keep in mind before you guess, mcdonald's is now at about $4 million in revenue average. Okay. Yeah. Burger King is about half that. So now we have, and they're both about the same footprint right.

Speaker 1:

Yeah, they are.

Speaker 2:

And so they both have drive-throughs. One does $4 million, one does four million, one does eight really now put this in perspective. You've been to cheesecake right yes cheesecakes average unit volume for that huge restaurant with that massive menu and that massive kitchen 10 million Chick-fil-A does eight and you could put 10 Chick-fil-A's inside of a Cheesecake Factory.

Speaker 1:

Oh, my goodness.

Speaker 2:

Now they do that because they have a culture that makes the guest want to come back. It's frequency that drives 8 million.

Speaker 1:

I mean, you see, if someone has Chick-fil-A, they mostly have it every day- but they only open six days, you know.

Speaker 2:

So it for mcdonald's to do eight, eight million. Their customers need to come back one more time a year yeah yeah, that's incredible it's it's frequency and retention and word of mouth that are critical, and and so back to the three strategic imperatives. If I open the location, I have to make sure that the team members are happy and satisfied, because they're going to create the experience that makes the guest want to come back frequently and tell their neighbors go to Chili's. You can't believe it. They have a triple dimmer.

Speaker 1:

It does make all the difference. And the thing that you're bringing up that I really enjoy is a lot of I don't know if a lot of people think about it is the frequency you don't think about that customer and how to keep that customer and how to keep wanting them to come back, because it's easier to keep a customer Like it's easier to keep an employee than go to find a new one Cause then you got to train them, you got to bring them in, you got to show them the culture. So I know we got, I know we got some time left, but with the, with all of the different industries you've been in, first of all, how'd you even go to 14 different countries? How have you found work in different countries? Cause most people are so closed off. So how did that happen for you?

Speaker 2:

Well, it's word of mouth, Really, you know so, if you work with a company and it's a large company and they're international and they have, in franchising, a master license, yes. So they'll give a country a master license to be really the franchisor in that country. Yes, so they'll give a country a master license to be the really the franchisor in that country. Yes. And, and and. So I started out by by having an office in Canada myself. Okay.

Speaker 2:

And so then I got involved in in Canadian companies who might be from Great Britain, and so then you're over in Great Britain and I got to the Middle East by a lawyer that I knew from the first year. He got out of law school and he focused on franchising and he got me a client in Saudi Arabia.

Speaker 1:

Really.

Speaker 2:

And they've been a client ever since 2008. Oh, wow.

Speaker 2:

And I've been over there four times, maybe for 90 days or four months at a time. And then somebody came to me from Dubai and he said I want to be a partner of yours, I want you to bring your intellectual property over to Dubai and I want to be a partner of yours, I want you to bring your intellectual property over to Dubai and I want to be your partner. And he was already entrenched in the Middle East, in UAE, because he had been in charge of Ford Motor Company sales in the Middle East. Oh wow. So he left Ford and started his own company and wanted, and so we became partners and I brought him our intellectual property and he brought us all of his contacts from being involved in Ford and that's how I got to the Middle East and the rest of it.

Speaker 1:

And how was that for you? Cause I know you've done different partnerships. How should someone think about a partnership? How should they look for one? Should people always be in partnerships, because I know there's a lot of different consultants who are solo. There's different business owners who feel the need that they need a mentor. How did you think about that?

Speaker 2:

I've never looked for a partner, and the only time that I the only two times I had one were people that came to me. Really. We started our Canadian office because the fellow that became the head of our office in Canada followed me around and went to all of our seminars and said my goal is for you to believe that I could run your office in Canada. And that was that. The guy in Dubai came to me. I didn't go to him, so I've never gone looking for a partner.

Speaker 1:

Yeah, that's interesting.

Speaker 2:

And you know you look for somebody who can do what you do. Who cares if it's as good or not? Who can do what you do. But they bring something else to the party too. Yes that you don't have absolutely uh. So in in both dubai and canada, both of those, both those gentlemen uh knew the market, which I didn't. They had contacts which you can't.

Speaker 1:

Yeah, you can't buy contact.

Speaker 2:

Even if someone gives you a list, you're still like they still don't know you yeah, so uh, and then and then, as long as you can continue to satisfy your client, the word of mouth in franchising is pretty incredible and uh, and it's what I've been very fortunate to. By the way, I was shocked the other day. Really, I hadn't looked at this for a long time. There's an article online that I wrote on what is franchising. Yeah.

Speaker 2:

And I looked the other day and I think it's 7,000 or so, maybe 5,000 away from a half a million reads.

Speaker 1:

Oh my God, Especially in this fast paced environment where not a lot of people are reading, but people want to know what's going on. It just shows a tribute to who you are, and the knowledge that you're actually sharing shows a tribute to who you are and the knowledge that you're actually sharing.

Speaker 2:

Well, and so, for example, I'll give you an example of this because you are very familiar. You don't have to be in franchising to realize that franchising uses the following language Own your own franchise, own a franchise. Well, a franchise is a license agreement, and think about the oxymoron to own a license. Yeah. You can't own a license and you can own a business and operate it under a license agreement. You can own a car and operate it with a license from Arizona. Yeah but you own the car, but you don't own the license. Yes.

Speaker 2:

Okay, that's a plumber, that's a stockbroker, that's a doctor, that's a dentist, that's a plumber. They all have licenses, but they don't own the license. They own the truck, they own the tools, but not the license. But they don't own the license. They own the truck, they own the tools, but not the license. And so you say, well, does every license carry a fee with it? And you'd go, yeah, pretty much. When you get a driver's license, you pay a fee, right. Absolutely.

Speaker 2:

But what's the fee for? Because it doesn't buy anything? Well, obviously it's to pay for the costs involved in having you go through and be tested. Yeah.

Speaker 2:

Prove that you can get one. So in franchising people think how much did that franchise cost you? Well, it didn't cost you anything, but you paid $45,000. What was that for? Well, it cost money to get you, it costs money to close you, it costs money to train you, it costs money for lawyers and architectural design, and so the initial fee is really cost recovery. And then you say, okay, okay, what's the royalty? And you say, well, so the royalty is all the revenue you make when you're a franchisee comes from using the operating system of the franchisor yes, makes sense okay.

Speaker 2:

So if he, if he or she gives you a license, they want to share in the revenue because you're using their stuff. That's the royalty. The royalty is, very simply, revenue sharing.

Speaker 1:

Yeah, because they're giving you the system, they're giving you the stuff. The process should be easier with the brand behind you. That's right, the process should be easier with the brand behind you.

Speaker 2:

That's right, and so a franchisee doesn't pay a royalty. They just give the franchisor the money that the franchisor has said you're going to give me if you use my stuff. Yeah. Makes sense. But if they think that they pay a, if they think that they're paying a franchise or their money, they're going to think that the money should come back to them in some way it's like it's.

Speaker 2:

it's like if I, if, if I buy a car from you and I bring it back to get it serviced that's kind of what franchisees think is going on the royalty I give you should come back to me in some way, when in fact it doesn't have to. But once again, this can all be summed up in another question that we can talk about is the difference between beliefs and how beliefs can really screw up a relationship or how they can make it very powerful.

Speaker 1:

Yeah, I think our mindset can be very. It can force us to like for example, I have a friend and he's a good friend but for some reason I've been viewing him as very annoying recently. So now I'm viewing him through this annoying lens. Every time he texts me, he goes do you want to do this, do you want to do this? I'm like this guy. He doesn't stop. Meanwhile I'm viewing it as the friend lens. Oh, I really like I appreciate him reaching out to me instead of him being like I have this frame that he's cause I have this belief and I need to change that belief cause he's one of my best friends. So I got to fix this, or it's not going to work out, but it's these little things where we start to realize like a lot of it's in our, a lot of it's our mindset and how we digest information, how we think about information.

Speaker 2:

Well, okay, so good point. Here's two examples. Okay, I'll do one in franchising, I'll do one in driving, if I think that my $45,000 bought me a franchise. Yeah. Now I'm an owner, right you should be, because I bought this with my money, right, yeah, as a yeah matter of fact the franchisor probably told me it was mine. Yeah, okay, so now I'm an owner of this franchise, right? Yeah well, how many times can you tell somebody who owns something what to do with it?

Speaker 1:

Never, never, not really.

Speaker 2:

Never. So here I am, I'm the franchisor, you're my franchisee and you think you own the franchise. So I'm telling you this is mandatory. So here's what happens In my brain I own the franchise, franchise. And then I'm telling you this is mandatory. So it goes through my brain and comes out highly recommended because my belief I own it washes mandatory and it comes out highly recommended and I just choose not to do it yeah because I own it. You can't tell me what to do.

Speaker 2:

I own this yeah and that's what causes a lot of issues in franchising. So if we go to a driver, okay. So uh, I live an hour away from the tucson airport and sometimes I have to be at the the stoplight to get out of where I live onto a busy highway. At 5 am it's not busy. Yeah.

Speaker 2:

And I'm sitting there and sitting there and I'm going sitting at this light is stupid. The reasons the light is here are not here. No one's here. Light is here are not here, no one's here. So I pull out and there was a highway patrolman sitting up the road who now caught me running a red light. So he comes up next to my car and I start saying to him look the conditions, for that was stupid. Look the conditions for that was stupid. I don't think I should get a ticket. And he said well, you agreed to follow the rules and you didn't, and the consequence of your not following the rule, when I saw you do it is $100, fine. And so I start I, when I go off on my road with my ticket, I start cursing him yeah, when he was just a messenger for giving me a ticket exactly, and he's just the messenger, he's the one delivering it, and it's my belief that I could be an anarchist.

Speaker 2:

I could do whatever I wanted, even though I was obligated. Yes. I agreed to what I just violated, and so I should accept the consequence.

Speaker 1:

Absolutely, absolutely. No, it makes total sense. I know we got a couple more minutes, so I just want to get these last couple questions in. What is one leadership lesson you? You teach ceos who want to expand and who want to grow. What is like one of the major lessons, and you might have touched on it already, but what is one of the major things?

Speaker 2:

so frame this for me. I'm I'm. What's my job, I'm a franchisor yeah and yeah, yeah, you'm a franchisor.

Speaker 1:

Yeah, yeah, you're a franchisor and you want to grow.

Speaker 2:

Okay, okay. Well, the most important thing is the way that I want to say this, so it comes out positively. I have to make sure that my candidate understands what franchising is and what the essence of our business is before they become a franchisee.

Speaker 1:

So you're saying that the agreement between the franchisor and the franchisee is a lot more? It's not so much. Hey, we're just going to fill out this paperwork. It's not just a formality, it's hey. We need to both understand what we see franchising is and we need to both agree on that.

Speaker 2:

Yeah, and so core beliefs and concepts need to be in place.

Speaker 1:

And established. Okay, that makes a lot of sense. And then the last question I have is I'm 29 years old. What is a piece of advice you would give to someone else who is 29 in this day and age, as times have changed a lot? But what is a piece of advice you would give to someone else who is 29 in this day and age, as times have changed a lot? But what is a piece of advice you would give?

Speaker 2:

I would say, to figure out something that you can do that's greater than yourself, and get really good at it all the rest of your life and you'll have fun improving other people's lives and in that process you'll improve your own.

Speaker 1:

Ah, you're the man, Bob. Thank you so much for coming on. Where can people learn more about you? Where can they learn more about Management 2000?

Speaker 2:

Well, they can learn more about Management 2000 at mgmt2000.com.

Speaker 1:

Awesome, thank you. You bet.

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Jordan Edwards

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