Ever wonder how franchising magic happens across different industries? Prepare to be enlightened as Donnie Carr, the CEO of Christian Brothers Automotive, and James Dwiggins, the innovative CEO of Next Home, pull back the curtain on their successful business models. From the tactile world of automotive repair to the evolving landscape of residential real estate, these titans of industry break down how they support franchisees, ensure customer satisfaction, and cultivate company cultures that thrive, whether brick-and-mortar or virtual.
We're not just talking shop; we're delving into the heart of what makes a franchise tick. Discover the importance of a supportive 'buddy network' for franchisees and how listening—truly listening—to customer feedback can propel a business forward. We dissect the building of bonds in remote operations, the impact of authentic corporate culture, and the power of a problem-solving mindset. And if you've ever wondered how to make transparency in business operations your ace in the hole, this discussion is your playbook.
Wrap up with a masterclass in franchisee training and expectations. It's about quality, not quantity, and finding franchisees who resonate with your brand's core values. We look at the finesse of tailoring education through Learning Management Systems and the impact of strict training adherence on maintaining brand integrity. As the curtain falls, you'll walk away with an understanding of how perceived value can tip the scales in your financial favor—straight from the leaders who have turned this principle into an art form.
We don't just talk about operations, we help you refine them. Check out how FranWise can help your business!
Ever wonder how franchising magic happens across different industries? Prepare to be enlightened as Donnie Carr, the CEO of Christian Brothers Automotive, and James Dwiggins, the innovative CEO of Next Home, pull back the curtain on their successful business models. From the tactile world of automotive repair to the evolving landscape of residential real estate, these titans of industry break down how they support franchisees, ensure customer satisfaction, and cultivate company cultures that thrive, whether brick-and-mortar or virtual.
We're not just talking shop; we're delving into the heart of what makes a franchise tick. Discover the importance of a supportive 'buddy network' for franchisees and how listening—truly listening—to customer feedback can propel a business forward. We dissect the building of bonds in remote operations, the impact of authentic corporate culture, and the power of a problem-solving mindset. And if you've ever wondered how to make transparency in business operations your ace in the hole, this discussion is your playbook.
Wrap up with a masterclass in franchisee training and expectations. It's about quality, not quantity, and finding franchisees who resonate with your brand's core values. We look at the finesse of tailoring education through Learning Management Systems and the impact of strict training adherence on maintaining brand integrity. As the curtain falls, you'll walk away with an understanding of how perceived value can tip the scales in your financial favor—straight from the leaders who have turned this principle into an art form.
We don't just talk about operations, we help you refine them. Check out how FranWise can help your business!
Franwise presents What's Your F'ing Business, a podcast about franchising. Here's your host Mary Ann O'Connell.
Mary Ann O'Connell:Hey everybody, welcome back to another edition of What's Your F'ing Business, a podcast about franchising, and in this podcast we like to talk to leaders in the field who are doing innovative things that can help your brand expand and grow ethically and sustainably, and this is an interesting conversation. We have two return guests today. I have Donnie Carr, who's the CEO of Christian Brothers Automotive, and James Dwiggins, who is the CEO of Next Home. These are two very successful brands that have a completely different approach to franchising and support, but they're both successful, and about two months ago we started a conversation at Franchise Business Reviews Operations Summit, but we only had 30 minutes of stage time, so we thought we would give this the time it's due to talk about. One size does not fit all in franchise support, so join me in welcoming Donnie Carr and James Dwaygans. Happy New Year, guys.
Donnie Carr:Happy New Year. Thanks for having us again, Mary Ann. I do think it's important, since this is only being heard, that they know how tall James is, so I just want to follow up on this. James, how tall are you? He's never going to let that one down.
James Dwiggans:I'm six foot seven. That's why I'm actually sitting on a midget chair, so the camera fits my.
Mary Ann O'Connell:It's actually seeing my face correctly. So thank you, Donnie, for clarifying my height.
Donnie Carr:And James with
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--tw-border-spacing-y: 0; --tw-translate-x: 0; --tw-translate-y: 0; --tw-rotate: 0; --tw-skew-x: 0; --tw-skew-y: 0; --tw-scale-x: 1; --tw-scale-y: 1; --tw-pan-x: ; --tw-pan-y: ; --tw-pinch-zoom: ; --tw-scroll-snap-strictness: proximity; --tw-ordinal: ; --tw-slashed-zero: ; --tw-numeric-figure: ; --tw-numeric-spacing: ; --tw-numeric-fraction: ; --tw-ring-inset: ; --tw-ring-offset-width: 0px; --tw-ring-offset-color: #fff; --tw-ring-color: rgba(59,130,246,0. 5); --tw-ring-offset-shadow: 0 0 #0000; --tw-ring-shadow: 0 0 #0000; --tw-shadow: 0 0 #0000; --tw-shadow-colored: 0 0 #0000; --tw-blur: ; --tw-brightness: ; --tw-contrast: ; --tw-grayscale: ; --tw-hue-rotate: ; --tw-invert: ; --tw-saturate: ; --tw-sepia: ; --tw-drop-shadow: ; --tw-backdrop-blur: ; --tw-backdrop-brightness: ; --tw-backdrop-contrast: ; --tw-backdrop-grayscale: ; --tw-backdrop-hue-rotate: ; --tw-backdrop-invert: ; --tw-backdrop-opacity: ; --tw-backdrop-saturate: ; --tw-backdrop-sepia: ;">feet</span><span data-v-ddf6351a="" class="transcript-element" data-mindex="5" data-eindex="15" data-key="515. 111. 654" style="--tw-border-spacing-x: 0; --tw-border-spacing-y: 0; --tw-translate-x: 0; --tw-translate-y: 0; --tw-rotate: 0; --tw-skew-x: 0; --tw-skew-y: 0; --tw-scale-x: 1; --tw-scale-y: 1; --tw-pan-x: ; --tw-pan-y: ; --tw-pinch-zoom: ; --tw-scroll-snap-strictness: proximity; --tw-ordinal: ; --tw-slashed-zero: ; --tw-numeric-figure: ; --tw-numeric-spacing: ; --tw-numeric-fraction: ; --tw-ring-inset: ; --tw-ring-offset-width: 0px; --tw-ring-offset-color: #fff; --tw-ring-color: rgba(59,130,246,0. 5); --tw-ring-offset-shadow: 0 0 #0000; --tw-ring-shadow: 0 0 #0000; --tw-shadow: 0 0 #0000; --tw-shadow-colored: 0 0 #0000; --tw-blur: ; --tw-brightness: ; --tw-contrast: ; --tw-grayscale: ; --tw-hue-rotate: ; --tw-invert: ; --tw-saturate: ; --tw-sepia: ; --tw-drop-shadow: ; --tw-backdrop-blur: ; --tw-backdrop-brightness: ; --tw-backdrop-contrast: ; --tw-backdrop-grayscale: ; --tw-backdrop-hue-rotate: ; --tw-backdrop-invert: ; --tw-backdrop-opacity: ; --tw-backdrop-saturate: ; --tw-backdrop-sepia: ;">.</span><span data-v-ddf6351a="" class="transcript-element" data-mindex="5" data-eindex="16" data-key="516 111. 654" style="--tw-border-spacing-x: 0; --tw-border-spacing-y: 0; --tw-translate-x: 0; --tw-translate-y: 0; --tw-rotate: 0; --tw-skew-x: 0; --tw-skew-y: 0; --tw-scale-x: 1; --tw-scale-y: 1; --tw-pan-x: ; --tw-pan-y: ; --tw-pinch-zoom: ; --tw-scroll-snap-strictness: proximity; --tw-ordinal: ; --tw-slashed-zero: ; --tw-numeric-figure: ; --tw-numeric-spacing: ; --tw-numeric-fraction: ; --tw-ring-inset: ; --tw-ring-offset-width: 0px; --tw-ring-offset-color: #fff; --tw-ring-color: rgba(59,130,246,0. 5); --tw-ring-offset-shadow: 0 0 #0000; --tw-ring-shadow: 0 0 #0000; --tw-shadow: 0 0 #0000; --tw-shadow-colored: 0 0 #0000; --tw-blur: ; --tw-brightness: ; --tw-contrast: ; --tw-grayscale: ; --tw-hue-rotate: ; --tw-invert: ; --tw-saturate: ; --tw-sepia: ; --tw-drop-shadow: ; --tw-backdrop-blur: ; --tw-backdrop-brightness: ; --tw-backdrop-contrast: ; --tw-backdrop-grayscale: ; --tw-backdrop-hue-rotate: ; --tw-backdrop-invert: ; --tw-backdrop-opacity: ; --tw-backdrop-saturate: ; --tw-backdrop-sepia: ;"> </span>on't touch the ground right now, because I can raise my chair enough to be seen properly in the camera. Alrighty Well, height not being the main thing we're going to discuss today, let's start with the audience and explain your two concepts. So, donnie, why don't you go first and explain what Christian Brothers Automotive is, how long you've been there, number of units, that kind of thing?
Donnie Carr:Absolutely so. Christian Brothers started in 1982, we have been franchising since 1996. We have about 280 locations in 30 states here in the United States of America. We are full service automotive repairs, so we do everything from oil changes to engine replacements. The only thing we don't do is body repair. But we're trying to give you that high end experience. Where you come in, you are in control of your vehicle and what it needs. We want to guide you through that process.
Mary Ann O'Connell:In your system do you have mostly single unit operators or multi unit operators?
Donnie Carr:The large majority are single unit operators.
Mary Ann O'Connell:That's a lot of people to support. James, why don't you tell the audience about Next Home?
James Dwiggans:Yeah. So Next Home started in 2014,. We started franchising in 2015. To date, we have about 630 locations across 49 states, all in the US of A, although we are starting to expand into Canada this year. I can say this year now. So, yeah, we're a young company. I would say we're kind of in our mid-level growth now, not a startup anymore, and we've expanded pretty quickly across the US.
James Dwiggans:Some things that are a little bit different about our model we're in residential real estate. It's pretty clear on that. We sell roughly at least in this 2023, roughly 29,000 homes a year. Very big organization, do about 11 billion in volume and have just over 5,000 agents across our organization. We're a little bit different in that we allow our franchisees to be both a brick and mortar or a virtual location.
James Dwiggans:Obviously, with COVID and everything that happened over the past few years, a lot of people no longer need to go to the office and especially in residential real estate, where our sales force is in the field, there's been a pretty significant shift away from large overhead and moving towards more towards virtual locations. I'd say probably 25% of our offices are virtual now. They meet up at a coffee shop or they have lunch. They do fun things together, but not everybody has a desk in the office, and it's certainly what I think will be the future of our business. But we've been doing that since we franchised in 2015,. So we were one of the first to allow a virtual franchise operation.
Mary Ann O'Connell:And you as a franchisor are also virtual, correct?
James Dwiggans:We are. We weren't. We had a corporate facility paying the high lease rates to everybody out there until 2020. We went virtual and so we had at that time about 42 people on our corporate staff that were managing the franchise. We all went virtual and since then our staff has moved all over the US. I think our corporate team now is in six states across the US and we, because we're in California.
James Dwiggans:Yes, we kept being opened and closed for two years because of COVID and just different policies. I don't want to get into that, but basically we never really got back to the office and then we just got to the point where we're like we don't even why. What do we need this for? I'm not going to like we love our people. It's one of our big things. We love our people and so we're not going to make them move back from Florida and Texas and North Carolina and where everybody moved.
James Dwiggans:So we decided to shut it down and so we run our entire franchise operation remotely. It has its pros and cons, I'm sure we'll talk about that, but it certainly, from a morale perspective of people not having to sit in traffic for an hour to two hours each way to come to headquarters. It's certainly built morale that way. The culture is a little bit harder to pull together when you're not in person. But certainly from a business perspective, we shaved 360,000 off of our P&L from an overhead and we put that into staff and other things that are more effective with our use of funds.
Mary Ann O'Connell:So 360,000 good reasons to do that. Donnie, your concept is brick and mortar, and so is your office, correct?
Donnie Carr:Yeah, so our office is brick and mortar. We actually we just remodeled the downstairs so we went full in. We have about 160 team members. 90% of them are in office, but we did move to a Tuesday through Thursday in office, monday and Friday at home. So it's a much more flexible schedule for our staff, which we've seen a lot of benefits from. You know, if they want to take a longer weekend or do some of those things, they can travel a little more. So it's been good for us. We also do a lot of in-office training, so having a physical space is really helpful for us.
Mary Ann O'Connell:That's what I was going to ask because, plus, being in Texas, you didn't have the opening and closing as often as we did here in California.
James Dwiggans:Rub it in. Why don't you?
Mary Ann O'Connell:Yeah, hey, I'm in California too. I ended up closing my office and moving it back to the house. It just seemed ridiculous. But you just talked about training and, james, you hit on a key point about building culture. So jump in on that. How does it affect your training? Let's start with that, donnie, and then James. Let's talk about training and culture, all right. So, donnie, how does it affect? What kind of training are you doing?
Donnie Carr:So we have a myriad of training. So we have in-office training and we train everyone from the franchisee, we train their front office staff, and then we also offer training for our technicians. We have in-house training for all of those people as well, as we have virtual training. We have an LMS, a learning management system called WISETALE, that we use. We also do regional training, so we have it in all of the different avenues. We do quarterly Zoom calls on different topics as well, and so we do a lot of different versions of training, but we do do a decent amount of training here at our home office.
Donnie Carr:You probably have, I'd say, easily 800 people come through our home office to be trained on an annual basis and, I think, from a cultural perspective. So that's one of the things that we learned during COVID is because pre-COVID there was a lot of can you guys just do this virtually? Can you guys and guys do this virtually? And we said you know? And so we did all of our training virtually and we realized our franchise. He's realizing. Their team members said they missed something when they would come to the home office. Cause one of the really neat things that happens when they come to the home office is they realize they're part of something that's so much bigger than that one shop. And then also it's fun, because I would say half our executive team spends time not necessarily a lot of time, but 30 minutes spending with our technicians or our service managers and letting them know what we're about as an organization, and they get to feel loved on like we want them to love on our guests, and so it's something that it's tough to convey through a virtual call.
Mary Ann O'Connell:I tend to agree with that. But that's when I switched over to the franchise or side from franchisee. I started as a trainer and I know how important it was that week that our franchisees were in. It really built bonds. They we knew them better, they knew us better and it took it was easier to get through some hard times. But, james, you had some tough times in 2023 as the bank rates went high interest rates. So how does the virtual training affect what you're doing?
James Dwiggans:Well, I mean, when you're virtual, people don't know that you're drinking alcohol all day, especially during 2023 with bank rates being that high. So, okay, joking aside, look, I mean Donnie actually nailed it because, if I think back of one of the reasons why our company still today but I mean, I'll be honest, it's not the same. When we used to do our in-office, we required our franchisees to come out for a week and they had to be in our corporate facility. They spent time with every single corporate staff member. At some point we threw a party in our office, had it catered and let everybody mingle. And he's right, like the bond that you create with your members, they see it so much greater than you can't. You can't actually every time I've ever tried to explain this on a podcast or something it's hard to describe. Until you're in a room belly to belly with somebody for a week, you create a bond. That's just different. That's probably the thing that sucks the most about being virtual is that I can't say much else other than just building bonds between your corporate staff and your member is the benefit of it. It's a cost benefit analysis in our scenario of does that make sense? Can we still be competitive. We to your point.
James Dwiggans:2022, the middle to end of 2022 and 2023 were seriously some of the hardest times in residential real estate in this country. It was worse nobody even knows these numbers, but the amount of home sales was less than in 2008. So, like for context, it was arguably one of the worst real estate markets in probably the last 20 to 30 years, and so you know. I think what Donnie said was really valid in that it's something we're trying to figure out of. How do we create that connection with our members when we're virtual and there's? It's hard. We haven't really figured out, because your corporate office is like your thing, like it's decorated your way. You can't necessarily just go host everybody in a hotel for a week. I mean, those are. That's the downside of the decision you know that we made. The upside is this is a very competitive business in residential real estate. We have a lot of problems in our industry right now and I think that, as a business owner, you have to constantly look at how do you make sure your product's competitive, how do you make sure that your fee structure's competitive, how do you make sure that you're still being profitable? And you weigh those things out in an arsenal. We still. We went down that road of virtual because it just made it made financial sense, not necessarily a cultural sense.
James Dwiggans:But to counter that, you know we are in very similar to Donnie. We do a tremendous amount of training. We have an LMS system. Everybody knows what that is. We ours is Thinkific, we do.
James Dwiggans:We have a coaching program we launched where we have actual members that became certified coaches and they coach other franchisees, both agents and brokers. We call it the Academy. That's been really successful. They actually do, ironically, a lot of our training now because we find that I call it the mom and dad effect. You know, like if mom and dad tell you something you don't listen, but if it's one of your peers you listen. So we found that, but focusing on it's called the Academy that when we have our members teach it has such a different effect than when quote unquote corporate is teaching. Now it's a service. They the way we designed that was our franchisees can sign up on a monthly fee and then have access to everything that's in the Academy and then they can also pay for one-on-one coaching from the members. So they can.
James Dwiggans:You know, I want a couple hours a month to help me figure out my systems, whatever it might be. We do all the same stuff at corporate. Ironically, like most of the things that we do is the same, but people tend to want to have a peer do that. We also did.
James Dwiggans:Something that I would encourage everyone to do is we created a buddy network from the launch of our company. So when somebody comes in, we have identified early like they were a former franchisee from this company. So we go, okay, let's pair them up with four other franchise owners who were in the same shoes that they were immediately, so they have this buddy network out of the gate. We also find that when they have their peers to talk to, they're more successful because they'll call them and be like hey, I'm like really struggling. I don't want to call corporate and sound like an idiot. So I want to ask you and like that's just that little extra comfort zone, but we just what? I think that I think that more than anything we do, this isn't actually a complex business, like it really isn't Yours, or franchising in general.
James Dwiggans:I'm, you know honestly, both of it, and this is going to be a generalized statement, but the reason I say it is we just do a tremendous amount of listening, a lot less talking. We listen to what our people are saying. We the reason why we do the franchise business review survey. Candidly, the rankings are great and we love the rankings, but that's not why we do it. We do it because we want to actually read the 230 page document and we skip all the positives, which we shouldn't do, but we do, and we go all the negatives and then we sit down, which is literally going to happen on Thursday and Friday of this week. My whole corporate team flies out. We do a two day strap planning session and I and one of the things that we go through for two hours is that document and we read every single thing our customers are saying that they're not happy about. We figure out are there things that we can fix If they're complaining about training. What we dig deeper. Why I say it's not complicated is we.
James Dwiggans:I think people just lose sight on the fact that if there is a problem and you can be the solution to that problem, people are willing to pay you for that solution. It's just how things operate. So just all the training that you do should be based upon what your members are telling you finding solutions for that, whether it's virtual. Or you know Donnie's business, which obviously has to do with breaking more. I mean it's repairing. You know it's repairing an automotive, right. So you can't do that virtually. Yet We'll see Donnie's got the newest AI app where it does everything for you without a human, by the way. So you know, I don't know if that makes any sense, but to me it's just. There's just. You just have to pay a lot more attention and just listen and find solutions to that and you'll build a great company just by listening to your customer.
Mary Ann O'Connell:So how do you use the FBR results?
Donnie Carr:We love the FBR results. I love them and I hate them, as James said. Like I know, as soon as the teams see them, they're going to read all of them, and mostly the negative ones. And probably because, similar to James team, our team cares, like they genuinely care, they want to do a great job and because of that, even though our scores are good, we're above average. But it's like it's one of these wonderful things where the scores great but the responses and the comments are kind of a beating. But it's good for us because it reminds you that you're not perfect or reminds you that you got a lot of work to do.
Donnie Carr:And I agree, you know, as James was talking about culture, you know, whether you do it in person or virtually, one of the things that's most important is just how you respond.
Donnie Carr:I think when they come to you with a question or a concern or a frustration or an unfair whatever it is, how you respond is what creates the culture, because if you respond with kindness, with being equitable, with having good perspective of not just your side but their side, and you respond that way consistently, that's what builds great culture. And being in person, yeah, it absolutely can help, but more importantly is how you treat those people on the other side and you make sure that this is a business where we're all winning as much as possible and not just one of us is, and so I would say that I mean. Our team spent a lot of time with the FBR. We have what we call many good to great say. Each department has their own and they'll take that. That's a big part of the end of the year is. They'll take those comments and those responses and that's how they'll create their goals and some of the focus items that they have coming into this year and what we're gonna do better.
James Dwiggans:You know, what's interesting is when Donnie's talking here, what I'm realizing is we actually have very I don't know Donnie that well, but I can tell just from his leadership we have similar perspectives. I'm willing to bet most of Donnie's people that he hires they look for what I call a servant heart. It's human beings that it's not even about your resume as much as like how do you actually give a shit about other people, to put it bluntly? And you can train a lot of the other stuff, but you can't train that Like. People either have a caring need to wanna help people or they don't, and I'm willing to bet that that's a hiring practice that they look for when they hire.
James Dwiggans:We do the same exact thing. The first thing we look for is is this person the type of person that is gonna give back? Do they care? Do they want to genuinely help other human beings? Then we can train all the other stuff around that. But you either have that as a human or you don't. And for me, like, what he just said is so accurate in that there is two sides to the story. You may be right, but how the person experiences that conversation and how they experience that connection between you and your support team can completely change the result of the outcome. Even if they're wrong, they'll be like wow, I really felt good about that situation where I found out I was wrong. But that's. I think one of the major things that companies fail at is they can have the best product, but if they've got people that don't care, it will never succeed.
Mary Ann O'Connell:So I think so much of that is based on respect.
Mary Ann O'Connell:First of all, I do think the brands that are most successful have that formula that you're talking about, james, where the field staff who I think have the hardest jobs in franchising they come from heart, they really the best ones want their franchisees to succeed and, if anything, that in my opinion, if there's anything that gets us in trouble with joint employment and such, it's that they try too hard and sometimes step over a few lines, but it's that caring and you used an important word a few minutes ago, james, which was you listen to them.
Mary Ann O'Connell:So I think if you care and you're respectful and you listen, that's a winning combination. I was training a franchise or brand a couple of years ago on how to deliver training effectively and I realized that their franchisees had no idea how much it cost. They had not read the FDD, they didn't understand how much it cost to become a franchisee and that when I asked them how many of you could afford to buy one of your own franchises, none of them could, and I said so. Somebody was really good at something before to accumulate the wealth to do this. Respect that they may not know how to do their specific task right now, but they'll learn it. But respect who you're dealing with, and I think listening, respect and caring are the key factors.
James Dwiggans:The other one I'll add in. There is and this is like a lesson for America it's okay to apologize and be wrong, like there's a concept. You can be like you know what, like we were wrong, and you know what's crazy. When you say it to somebody, it's amazing how fast it de-escalates Because they're expecting you to just be defensive and point the finger at someone else, which is literally what our country does now. And instead of just being like you know what we screwed up, I'm really, really sorry. What can we do to make this right and earn your trust back? Holy shit, there's a concept and, by the way, when people hear that they're just they're not gonna be, they're not gonna get mad at you more, they're so like you just took the guard down. They're like well, thank you for saying that. And you immediately start the trust building again.
James Dwiggans:And so we what I think is important is and even we get away from this sometimes because we're trying to build a level of service but I think the important part is to let your team have room to fail and let them grow from it. Like you can't scold them all the time. They have to have some space to be able to learn. It's how we've all learned in our lives and also being open and honest and vulnerable about it and be like you know what I goofed and I won't do it again. Here's the process I put in place to make sure it doesn't happen. But what can I do to earn your trust back? Like your customer will love you for that, like they will love you for those conversations. But we've created a culture of fear in a lot of ways in the way companies are run. I would encourage anyone to think about when you're hiring people. Give them some space to learn, give them some space to be themselves and your client will appreciate that. But we just find that that's an easy way to also continue to build that culture, even virtually, just by picking up the phone instead of sending an email Like use the device it was intended to be used for and have a conversation with somebody.
James Dwiggans:I'll tell you another one to throw out there. I'm trying to. We're really contemplating using Zoom more. The reason is it's easy to do. If my phone calls are very like impersonal, you're a little bit more, it's a little bit better than email, but it's still. You're not visual when you're visual like you can't, you can't be a keyboard warrior when you have somebody on the other line of Zoom. So I think that's a. I think that's an interesting thing that we're starting to think about is like do we get our customers on Zoom with all of our team members? There's more of a one-on-one. Some people don't like that and we have to work through it, but there's certainly a concept there of creating more of a connection when there's a visual aspect to it.
Mary Ann O'Connell:How much do you use Zoom?
Donnie Carr:We use Zoom quite a bit. I mean we have peer group meetings on Zoom. I would say the majority of our coaching calls are probably most are phone calls. The one-on-ones are phone calls. Internally we use Slack, which on a Monday or Friday when I'm working from home, I am doing a video call with my team members before I am sending them a note, a written note. I will say I love what James shared about letting people fail, because I don't think one of the things that I realized is sometimes the best opportunity to build a relationship and to build that foundation is when something has gone wrong. Right, because if you wanna create a moment of trust building, it's when something hasn't gone away it should, and how you respond to react to that. Because when everything goes the way it should all the time, that's what it is, but when something goes wrong, they know who you are at your core and how you're gonna respond to that.
Donnie Carr:And the other thing that I love what he said is letting people fail is because one of my largest pet peeves is when the only people that are allowed to fail is the leader. Like it just doesn't make sense to me. It's like why is that guy or gal allowed to fail but nobody else is? And I think you gotta let your team fail, because that's when you learn and that's how you grow as a person is through those failures, through those shortcomings, and you've now figured out the wrong way to do something right. Thomas Edison he failed at creating a light bulb a thousand times, but he said I just know how not to create a light bulb a thousand different ways.
Mary Ann O'Connell:So I also think it's when your systems improve, because when we've done something wrong, that sometimes an indication that time or circumstances have changed and maybe there's something you need to change in your system. I like to go back. When I was running customer service, would go back every quarter and look at the call logs that came in and if I saw that we were repeating the same mistakes over and over again, it wasn't their fault. It was obviously something we were doing wrong on our side. It was our process no longer served our money. Mailer franchisees. So I also think that wrong and I love James. You said earlier that when you look at your franchisee satisfaction surveys, you start with the bad reviews. That's kind of like me buying anything on Amazon I skip all the good stuff. I want to hear who's complaining about things because you can learn so much from that, but it takes a tough skin to do that.
James Dwiggans:Or a group of people that want to be better and then it's not, as I mean, look, don't be clear. We still look at the good stuff, like we start the meetings on a positive. We just don't spend as much time on that. We spend more time on the negative. But we've also, in our company's example, we've done really well on these surveys because we've just our culture has been built around it. So our negative list is not large, but it's also. Sometimes there's stuff in there you just can't fix. Like there's things in there that somebody doesn't understand the process, which is a comment I'm gonna make and I was leading towards. If they. There's a lot of stuff that comes across in these reviews where your first response is Betas, don't get it, we can't do it that way, that's not possible, it's not how our business operates. And then you instinctually go let's just move on because we can't fix that. I actually would encourage everyone to think about that for a second and go. That may all be true and it's an opportunity to teach. So your members gonna continue to think that unless they understand that it doesn't operate that way. I'll give you a prime example of this that I'm sure there's other people that will listen to this. That will resonate. So we're at.
James Dwiggans:You know residential real estate. We have big conferences. We host very large conferences in our company. It's part of sort of how residential real estate works. Got a bunch of salespeople. We gotta make sure we make them feel good about what they've done. So every year we have an annual conference. Next year or this year it'll be in Las Vegas. You know we have over a thousand people that come and it's a three day event and it's huge.
James Dwiggans:They always inevitably and I shouldn't say all but a large portion of people think the ticket price is expensive. And we always get it's like why is it so expensive? It's $800 to attend a three day event. Now, if you've never run a conference before and for those of you listening know that that's like that's not expensive at all they don't actually understand the cost.
James Dwiggans:And we got I got sick and tired of these conversations where people were complaining well, why don't I have dinner all three nights for $800? And I'm like, oh my God, it's Las Vegas, it's unionized. Like, don't even start me on the amount of costs. I said you know what? Here's what we're gonna do In our annual meeting. I put them all in the room I said here's the P&L people this is what it costs to run this thing. They didn't realize that it was like $1.2 million to actually host an event for three days and that, by the way, your ticket price only covered 60% of the cost, that it was sponsorship. And then I did a whole conversation about y'all. Better love on those sponsors that are here that are paying to be here, because without them your $800 ticket goes to $1,600, you know, my point was you don't know what you don't know.
James Dwiggans:So I personally approach things from how do we be more transparent, which is the word I was getting at. I think the more transparent you are with the way things operate and just show people this stuff, then they have more ability to learn and understand. For example, most of your comment you made earlier, nobody reads the FDD, like I hate to say that, but they don't. We, no matter how many times you want to do an FDD review or explain everything to them, we all know that they've skimmed it. They think most franchisees think the franchise or is rich. And people are always come up to me like when are you gonna get a private jet? I'm like we did like 13 million in gross revenue Ain't happening ever in this lifetime, right? So you?
James Dwiggans:My point is also I sit down and show them the P&L every year, not just the conference P&L. Here's what we made, here's the staffing hires, here's what we put to product and services. This is what we've spent our revenue on. This is the amount of money that we made. And what happens is those conversations stop. They're like I didn't, I didn't realize the franchise doesn't make that much money and I'll usually say we can make more, I'll double the fees if you all want.
James Dwiggans:But like, if you want to keep things the way they are, like let's have some context to it, because despite them sending you, send them the FDD, they don't read the financials, only like really sophisticated investors do. But the in our business, the average person doesn't read this stuff. Honestly, I'm not even sure they even know how to read a P&L. So, like it's for us, we look at it as an education perspective. And what happens again with transparency is you bring them and align them around what you're doing as a company, because man, people will make a lot of assumptions really fast about everything without any knowledge. Welcome to America. So Donnie's laughing because he knows I'm right, like it's this. This is what we all do. We make so many damn assumptions about everything without having any education at all about it. But if we don't educate people, they'll conclude whatever they want about your organization.
Mary Ann O'Connell:So and generally something negative. Donnie, you are laughing, but what do you want to add to that?
Donnie Carr:No, I think James's point is very fair. I think you got to educate people, you got to show them. The information Conferences are ridiculously expensive. I don't disagree with that. But yeah, like because if you don't tell them or teach them and I think his point about how you can get frustrated about those comments and say like we just can't do that but then you have- to look at what can we have done better where they're not feeling that way.
Donnie Carr:How could we have educated them on those things? And sometimes it's it's it's harder and sometimes it's easier. I will say one of the things that we have to remind ourselves of when we do read them is sometimes the loudest voices do come from the cheapest seats, and it's just. It's just a hey like how many people are complaining about this? Okay, it's so hard to say, okay, it's five and we have 240 franchisees. Okay, we don't need to make a decision based on what five franchisees are saying.
James Dwiggans:Totally, but when?
Donnie Carr:there's a theme and you're seeing it throughout. That's when you really need to make changes. That's when you need to. Well, man, we had a lot of people saying some version of this. Okay, let's, let's make it better.
James Dwiggans:There's always going to be some. There's going to be people Donnie's points totally valid and thank you for adding context to that. There's going to be some people that are always going to be loud about stuff and there's lots of other franchises they can work for too. I'm not afraid to tell people that we're not a good fit and let's just find a. Let's find an off ramp, because we're headed this way and you view the direction differently and that's okay. Like we just maybe. We're just not a good fit. So totally valid comment, by the way.
Mary Ann O'Connell:I'm going to switch things up a little bit and ask you both. We're talking about the difference between the virtual businesses and the brick and mortar and supporting them. We've talked about training. But how are you handling these days, especially after COVID restrictions are lifted? Being in the field, I know with brick and mortar, donnie, you're going to have to do some sort of brand standards visit. But how do both companies work with that outreach in the field? Donnie, I'm going to start with you.
Donnie Carr:Yeah, I'll jump first so we do have at a minimum. You're going to get one visit from your coach every year when you're brand new. You're going to probably get at least three visits in that first year of business. We also have met in something two years ago with where every single one of our team members here at the home office, no matter what your role is, is going to go spend a day working in one of our shops. And that's to help two things.
Donnie Carr:One, give our team members perspective of, hey, their job is not easy, it is not fun. People aren't excited. To be out getting their car fixed right and then to it helps build that relationship right where hey. That's one more touch with our home office where they can realize we're here for them, we care, we're going to buy the team breakfast, we're going to shuttle guests, we're going to clean the bathroom, whatever it needs to happen. But that's something that we implemented where hey, so you should have at least two people from the home office in your store at some point in time every year. And then we also started doing secret shoppers, which our franchisees were excited about as well, of once a quarter what they get perspective from a guest and what that experience looks like as well.
Mary Ann O'Connell:So you're using a third party for that and what's your ratio of field staff to franchisees? So if you have 240 franchisees, what are you looking at in coaches and support?
Donnie Carr:At least 100 of our home office team members are coaches and support.
Mary Ann O'Connell:Wow so, james, how do you approach it?
James Dwiggans:We're not model, to be clear. So you know we're not going to get in deep into it, but we operate just in a different, in a different capacity. With the size of our network it is impossible for us to be in every single office every year, is not? There's there's offices we genuinely will never actually go physically see. We have a team of agents. There's five of them. They operate remotely. There's no office to physically see. That doesn't mean we won't see them, I just meant there's not. We're not going to go travel around every location and, you know, check out the wallpaper. It doesn't fit in our business model. We so we do inspections Whenever our franchisees come up for renewal. So, in terms of clarity, we have one five year contracts sounds like I said, the model is very different. We're we're having inspections where they send us photos of things. We want to look at their furniture, we want to see stuff.
James Dwiggans:We do regional events. So that's been a big thing that we've we've spun up in. The coaching network that we launched is also part of organizing that, and we've also been focusing on having our franchisees pull six or seven of them together. We have locations in the same city, based upon our model, and so they'll work together on hosting an event corporate. Almost always we have somebody from our corporate staff that attends, usually speaks to some type of training, and so we'll spend time with them. Then we'll go to dinner. We'll do lots of stuff. So between the cost so we do it this way so between the conference physically that we we require our franchisees to attend it, they will pay a fee whether they attend or not, so that's a requirement for them to come to our annual event. I would never, by the way, change that. If anybody's ever thought about it, implement it. If you ever have an event you want people to show up, charge them the fee one way or the other. Usually they'll come and they'd always thank us, by the way, for forcing them to do it, because they walk away from like meeting new people and re-energizing themselves. We do a franchise owner summit Later in the year. That is not required, but we have two-thirds of our franchisees will come to that.
James Dwiggans:We do regional events. We do town halls. I do a purse, I do a town hall. It starts this week. There's 19 of them that we do across the regions. I'll host that in the in the first quarter before our conference. Then my chief strategy officer host one in the summer. So we're touch points on that perspective. So between seeing them at regional events, seeing them at conference, seeing them a summit and then doing these virtual town halls were at a very high touch point, either virtually or physically With with the franchisees. But, to answer your question, there's probably 200 locations we never actually physically been to.
Mary Ann O'Connell:So that's interesting. You were talking earlier, james, about using more zoom or some sort of video conferencing. How are you blending, donnie, right now? How are you blending your in-person Training, your being in the field and then using things like video conferences?
Donnie Carr:I would say so you're gonna have. We'll see you so two times in your store, we'll see you again in our annual convention and then if you want to come through the home office for some additional training thing, there's that, I would say, the blend of zoom. Yeah, so I would say it's probably, we're probably close to 50 50 on in-person versus virtual, the percentage and what. What gets tricky about that is the. Is the LMS right, because there's so many classes and so many things on there and I know James talked about that need software that they use. Where it's, it's like a zoom call but someone's just kind of hosting it, but it's, it's pre-recorded, right yeah the webinar.
Donnie Carr:So I it's tough to kind of say which percentage, because those LMS classes that are always available and always have the opportunity to be taken Is not necessarily being hosted by some of the home office, but we've created the content. We're updating it on a regular basis. Yeah.
Mary Ann O'Connell:You just said something that sparked for me that they can or they don't have to take every class. It seemed to me for such a long time, when I would read FDD's and yes, I actually do read them there would be it's going to be a week, and Then my clients would call and say well, how long do you think training should be? Training takes as long as training takes, depending on the complexity of your business, but I do love having LMS programs, which allows continual learning for those who want it. That it's there as a great tool for the employers to have their, their employees get up to speed. And now you're not worried about I'm Taking these franchisees out of their potential business environment for five, seven, ten, however many days, but I'm still getting them the education they need. So I applaud you both for using LMS that way.
Donnie Carr:Yeah, and then also just to just to clarify, mary Ann, our Pre-opening is very different, right, there's? There's a very set schedule, that's eight weeks, that's in store, in office, all those other things, but post that. That's when things become a lot more. You learn a true path.
James Dwiggans:Yeah, and we do the same, mary, and we do the same. Even zoom was we're not doing physically. They're required to attend four days of training Via zoom and we we gotten really good about breaking it up and giving them space to go check their email, but we we have things like you have to have your camera turned on the whole time, like we've learned. Otherwise people don't. They're not listening, they're doing something else. If an instructor and we've done it if instructors like they weren't present, they weren't listening, we go.
James Dwiggans:You haven't complied with the rules of our FDD and our contract. You haven't completed the orientation program. You have to go back through it again. I've terminated a franchise for not completing orientation because we know that they're just going to be a complete disaster for us. They're not paying attention. You know out of the gate they're going to be a horrible franchisee. So, even if you do it via zoom, there are ways to make sure that they're fully attentive and we are very clear with them. Phones off, your paying attention, you're engaged. If your camera's not on, you'll be disqualified. You have to go through it again.
Mary Ann O'Connell:So bravo, because I find and I don't know if you ever see this, donnie, I don't remember when training starts prior to their opening, but I've worked with brands where I have franchisees in a room for a while till their phone rings and they're out talking to their contractors and you know, there, or they're trying to do an interview for a new staff member before they open, thinking that well, I'm not going to run this business. I have employees who are going to run it and I love the idea that you're saying phones off, I'm looking at you, you can't walk away, you have to stay engaged.
James Dwiggans:Yeah, I mean we're like we let people go use the bathroom. I'm gonna like that bad, but you know like that.
James Dwiggans:But the idea is if you're off the screen for more than like, yeah, like if you're off screen for more than five minutes, like we start to, we start to question and, like I said, we've done it. We've had a franchisee who just never showed up and was not present. We're like you're terminated by, so we just don't want to deal with that because they're not engaged already out of the gate. We don't want them carrying our flag.
Mary Ann O'Connell:So yeah, that's a. That's a brave position to take, but I think the the necessary, but it's but it's not actually like.
James Dwiggans:If you think about it like, it's not. I I have. We have had no issue telling someone this is a You're a franchisee, we're a franchisor, but you are representative of the brand You're. You're literally Carrying our business model that we've spent a tremendous amount of time building. We have a fiduciary responsibility to the other 630 offices to make sure that the people that are carrying the same flag are doing it appropriately.
James Dwiggans:You weren't present from the beginning. You're not following what we've asked you to do. We've outlined our terms very clearly. We've explained it to you on multiple phone calls. You bought the franchise. You're not following it. You're not a good fit, bye Like.
James Dwiggans:There's plenty of other operations that are that are less Stringing, but we don't want someone ruining the thing that we've built and our franchisees. By the way, they don't see that as a negative. I think sometimes franchisors are worried about that impression. I would encourage you to tell them that you have gotten rid of franchisees that they are Acutely aware of already, have not been following the rules, have been hurting the brand, and they will applaud you Because usually they know more about it than even you do. At the franchise or level. We have zero issue telling people that, and we find that most of our franchisees are appreciative the fact that we have brand standards and uphold it, and I think that's a Maybe. There's a learning lesson there too. Ignore the money. Focus on how they're gonna represent your culture, because that short-term benefit could be a real long-term problem for you Financially if you've got a bad franchisee out there absolutely, yeah, we're.
Donnie Carr:We're proud of the fact that less than 2% of the people that apply for a Christian Mose automotive get one. Yeah, like we wait, but the the bar to entry is extremely high and and they are absolutely not our employees. But like, when you think about at that same level, like would you hire someone to be on your team that's not even gonna show up to orientation or training, that's not like.
Donnie Carr:I don't know, I'm not gonna pay them, like they're not gonna be on my team, and so why would I? Why would I change the rules or the bar or the barrier Just because they're giving me some money? This is a. This is I mean, whether it's five years for James or 15 years is our first term. I don't want a long-term relationship where you can't even put the effort in to begin with To be a part of this brand, so like I think that's the thing that oftentimes people get confused. It's like, hey, well, you could be at 750 locations in three years if you just, you know, would just lower that bar. I'm like, no thanks, I mean my. My favorite comparison is the Ritz Carlton. It is a world-renowned brand with just over a hundred locations, and so I'm Christian Mose doesn't need 500 or a thousand locations. We'd love that, but we don't need it Because that's not where. Chasing is the number. We're chasing the quality of the product.
Mary Ann O'Connell:Well, james I think you said it so well just before forget about don't focus on the money, because if you have the right franchisees in place, it's going to happen, and if you're not, diverted, taking care of the ones that really aren't buying into the brand I worked for. I've said this on this podcast before, but I worked for a brand and the CEO's answer Was we can help you out or we can help you out. You choose.
James Dwiggans:Yeah, it's a great line.
Mary Ann O'Connell:And we could sit down and work with them or we could find a way for them to exit with dignity and grace and maybe even a little money in their pocket. And but you have to be someone. I listen to so many development folks in franchising who Live and die by the number of deals they've done every year. And that number goes up and up and up and it's it's harder to find those Unicorns. And so when one isn't a unicorn and sneaks into the corral, you got to get rid of them.
James Dwiggans:You know the other comment that Donnie made, which I absolutely love, and we try to teach this a lot in our industry. You know a little bit Carlton by the great example, love those places. I think what's interesting, though, is and people forget that, in absence of value, all you have is cost, and what I love about what Donnie just said was he's not trying to be the cheapest or the least expensive to sell 750 franchises he's got. They've set a tone and standard of what they want, and this is the comment that I think people forget about all the time. Your Americans are.
James Dwiggans:I was kind of ragging on our country because I like to some part of it, but, like the also, the other thing about us is that we actually are willing to spend money on, on premium things that we find value in. Americans are really good at that like we're willing to spend money on High-end cars and you know, donnie knows that a Honda Civic probably has more reliability than a Mercedes Benz, but people are willing to buy the Mercedes because they perceive it as being more valuable and like it's more luxurious and and what my? What I think is great about that comment is you don't have to be the cheapest, you can actually be the most expensive or middle of the road or whatever you want. As long as you're articulating value Very clearly to somebody, they will pay for that service. It's possible to do and it's. It's something that's very common in in our business of residential real estate. You know, we've we're in this sort of race to the bottom in my opinion, and I constantly remind people that you can actually be.
James Dwiggans:You can be a realtor that charges more and if you can show why People will pay you for it because they want that experience. It's an infrequent transaction people do two to three times in their life and they're actually looking for expert representation. And I and it's funny because when I think about cars and I'm like a big car guy I actually it drives me nuts if I have to go get something fixed twice, because to me time is money. I'd rather pay a premium to have a mechanic or somebody who I know is gonna actually fix the damn thing the first time. And so, like I think there's just a lesson there and what he just said, that you know how do you want your, your service level to be? People will pay for premium service Like I wholeheartedly believe in that and also your product it can be. It doesn't have to be the cheapest. You can do something really well and people will pay for it.
Donnie Carr:I think there's a. There's a fun story if you all have heard of Yeti coolers, all of that right.
James Dwiggans:Love them. Well, I saw you hold up. They were actually going to go out of business.
Donnie Carr:And right before they went out of business they raised all their prices significantly and then they became very popular Because it was this more expensive, fancier item. And so the James's point is they actually were at a lower cost point we're on their way out of business and then they raised their prices, which is actually what kept them in business, because it then was looked at as a premium thing and people wanted more. But you do have to have the quality right. You can't just raise your prices and give the same level of service. But James is absolutely right that people are willing to pay for something that's fixed right the first time or doesn't break or, you know, has that white glove service when you're selling or buying at home or or getting buying a car or getting it fixed.
Mary Ann O'Connell:Or buying a franchise, guys. I mean your fee structures can, if you can justify it, if your validation is good, that your Existing franchisees are talking about the value that they get from being in that franchise system, it's the same thing it carries from your consumer to your franchisees, absolutely so what else are your secret sauces, guys? I Mean.
James Dwiggans:I'll throw one last comment in. I said I think we've kind of covered the gamut at this point, but figure out a way To get your customer when I was saying customer, your franchisee To be your microphone. Like, how do you get them to go out and just shout from the rooftops that this is the most amazing company that I'm part of, and I think, if last I checked, I want to say 30% of our new business comes from referral in our company there, and so I'll add the psychology to this for seconds. Everybody gets the point of what I'm trying to make. We're in a business where everybody works with each other.
James Dwiggans:Realtors work with each other and they compete with each other. It's a very weird business. You have to be friends with them, but you're also competing with them for deals. So getting them to go out and talk about joining the same company that they're at, even if they're not working in the same brokerage, is a is a Difficult task because you're inviting your competition in essentially. So I think that one of the things to always continue to think about is how do you have your franchisee Be more of a spokesperson for your organization? But you know, video testimonials is one thing, but maybe come up with some type of plan where they're Involved in helping new franchisees on board in some way or they're out Recruiting people to the company and there's some type of financial incentive. There's nothing wrong with that. People like money, finding ways to really make them your, your, your, you know, your advocate. It goes so much further in the franchise sales process Because they came in already hearing from a franchisee going I love this company and I've checked them all out and this is who you need to be at. Like your conversations and time to To close shortens up Significantly versus them then having to call around.
James Dwiggans:I just I think there's something to be said about Really focusing on getting your franchisee more involved in the growth of your organization. I think is a is a huge thing and just as an example, like we're, we're looking at lots of things whether there's opportunity for Our franchisees to have ownership in the franchise. How does it make it more incentivized to continue to grow it. Those are things that we're looking at in the future. But I think that we miss. We bring on at the industry tend to. It tends to operate top of funnel and your top of funnel can be increased and the time to close can be shortened when you figure out how to use your existing base to broaden that. So that'd be my final sort of parting words.
Mary Ann O'Connell:Thank you, good ones. How about for you, donnie?
Donnie Carr:Yeah, I would say. I mean, I think that's great. I love utilizing your franchisees. We we use ours in lots of different ways.
Donnie Carr:I think the other thing I think is important is when you're going through that sales process and when they're becoming a franchise, is to be as open book as you possibly can. One of the things that I sell to say to every one of our franchisees that comes to discovery day is this is not easy, this is not always fun, this is going to be a lot of work, but we want you coming into this process eyes wide open, like we don't want you getting six months, 18 months down the road and saying I didn't know about that and so those things that we talked about earlier, those FBR comments where I didn't know that or I didn't realize that or why don't you do it? This way is man, be as open book as you possibly can. Show them all your good, but show them all your bad. I love.
Donnie Carr:The question is what can Christian dollars do better? Because I love telling about all the things that we fall short on and that we're working on, because it's a lot of things, and so I think it's really important to start there with your franchisees and just. It needs to be less of a sales process and more of a real discovery process and they think when they Keep right you that check and they start that training process, there shouldn't be a whole lot of new information that they didn't know about previously. We have one of the most detailed item 19s that is out there and that's for reasons because we want full transparency With with our candidates.
Mary Ann O'Connell:And that's why you're only accepting 2%.
Mary Ann O'Connell:I think that's terrific. Well, gentlemen, we are coming up on the top of this hour and I Really appreciate you coming back together and sharing the information and showing that, no matter how diverse we are In what we're offering Excuse me in what our models are, there's still some core principles that are at stake for making a franchise work and work well for all the Stakeholders in it. I want to thank you both for sharing your time, sharing your wisdom, your humor and your perspective, because the more we can listen to each other, the more we learn, the better the whole Industry gets, and we can keep some people off our backs that way. So thank you very much. I hope you both have a fabulous new year and, for my audience members, as we normally say, if you have a Brand whose story needs to be told, reach out. If you know of a brand and you want to know more about it, you can contact us at info at Fran wise dot net. Thanks for listening and we look forward to hearing from you before our next episode.
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