What's Your F'ing Business?®
What's Your F'ing Business?®
Aligning Vision and Values in Franchising: Insights from Rob Flanagan CEO of Hounds Town USA
Join us for an enlightening conversation with Rob Flanagan, CEO and cultural co-founder of Hounds Town USA, as he shares the secrets behind the brand's unique approach to doggy daycare and boarding. Discover how a former NYC Police Department canine unit member, Mike Gould, crafted a dog management philosophy that views the world through a dog's eyes, revolutionizing franchise operations and capturing the interest of franchisees. This episode promises insights into Houndstown's journey from humble beginnings and Rob's pivotal meeting with co-founder Jackie Bondanza.
Explore the critical components of franchising as Rob sheds light on the importance of financial health and cultural alignment. Whether you're a seasoned franchisee or new to the game, understanding the financial intricacies before diving into the franchise world is crucial. Rob emphasizes the role of a skilled financial team in guiding growth while maintaining cultural integrity, especially when private equity comes into play. This discussion offers a roadmap for refining brand vocabulary and establishing a strong brand standards manual, ensuring new franchisees align with the company's values and vision.
As we look toward the future, Rob shares Hounds Town's strategic growth plans, highlighting the significance of aligning with the right partners and integrating franchise recruitment across departments. The vision of every dog in America having access to Hounds Town services drives infrastructure development and marketing efforts. Gain valuable insights on navigating franchise networking, the importance of setting realistic expectations, and the collaborative spirit within the franchising community. Rob's contributions and the creative team behind "What's your F-ing Business" round out this engaging episode, leaving us inspired for the journey ahead.
We don't just talk about operations, we help you refine them. Check out how FranWise can help your business!
Fran Weiss presents what's your F-ing Business A podcast about franchising. Here's your host, Marianne O'Connell.
Speaker 2:Hey everybody, welcome back to another episode of what's your F-ing Business, a podcast about franchising, and here we get to speak about all things operational compliance, what's driving franchise success? I'm Marianne O'Connell, I'm your host and I am the founder of FranWise Franchise Consulting. We have a great guest today it's. You know, when you meet those people in your professional journey and on the first phone call, you know you click, you know you're thinking the same way. Well, that's our guest today.
Speaker 2:I don't know if he says that about me, but I felt that with him and we first worked together at a brand, a different brand than he's at today, and I had the best experience putting manuals together for this brand. And we've been talking about getting him on the podcast and you know things fall out of your head until I saw him at the Franchise Business Review Op Summit a few weeks ago and he delivered one of the best closing presentations I've ever seen. So I am so happy to bring to all of you the CEO and cultural co-founder of Houndstown USA, rob Flanagan. Hi, rob. Founder of Houndstown USA, rob Flanagan.
Speaker 3:Hi Rob. Well, just to set it off, when we first met, I felt the exact same way. It'd be horrible to say I didn't, but I truly, truly did, and I completely agree with you. Franchising is such an amazing support group, as much as it is a business approach, and you've truly been one of my mentors, guiding lights, and have always aligned with your philosophy towards franchising. I couldn't be more excited to be on this podcast.
Speaker 2:Thank you, it's nice when it works out that way, and a tip of the hat to Renee Israel, who introduced the two of us.
Speaker 3:Yes, yes.
Speaker 2:So, rob, we mentioned the brand is Houndstown USA and not everybody knows the brand, so can you explain to our audience what is Houndstown USA?
Speaker 3:So Houndstown is a doggy daycare and boarding concept. We also do spa services. What really differentiates us, differentiates us from the pack, no pun intended.
Speaker 3:Or pun intended is really our dog management approach and so our first founder, mike Gould, is a brilliant, has that founder mind but he actually sees the world. The way dogs see the world it's amazing, and he was one of the founding members of the New York City Police Department canine units and he really kind of clicked with dogs and after he retired he opened up the first Houndstown in Long Island and what really kind of set the brand apart was that he created all the dog management approaches to what dogs really need and how they see the world, not how humans think dogs need to see the world. So we have five play areas so that we can create really specialized packs that would mimic how a dog would create a pack in the wild if they were out there creating their own packs. We design our facility around how dogs see the world and then the way that we manage the packs is all based on being and from that philosophy.
Speaker 2:Yeah, because I've worked with a couple of the doggy daycare brands and you don't anthropomorphize the dogs.
Speaker 3:No.
Speaker 2:The dogs are the dogs and the humans are the humans I mean. So I don't see sofas, I don't see fake fire hydrants and things. I still remember the rules about how I'm allowed to go in and out of a play area to keep the dogs from getting out. How does that affect franchise operations and who you attract as?
Speaker 3:a franchisee. Yeah, it simplifies a lot of our operations. It's one of the reasons we have such a strong unit economics, because the labor component of what we need to do is more streamlined. We really kind of stress to our franchisees that once you learn the dog management approach, the business is incredibly simple because it's really about just kind of managing the dogs and I love the simplicity, not a knock on any other brands. I've been part of complicated brands and it is certainly a breath of fresh air where the business model itself is relatively straightforward.
Speaker 2:And for those listening, I want to guarantee you those tails are still wagging at 100 miles an hour and the dogs are happy.
Speaker 3:They really are, because we're not getting into the pack and disrupting it, and so everything we really train is around the pack mentality, and how do you manage that?
Speaker 2:You know, as a cat owner, you could never have this for cats, because cats just don't care, go away. Yeah, so where you were brought in specifically to help turn this around, where was, or what was, the state of Houndstown, usa, when you came in, and what do you feel were the key pieces you brought to change it?
Speaker 3:Yeah. So the second founder, jackie Bondanza. She came in, I think it was 2013, 14. She came in as a customer and she saw the potential and then partnered with Mike to really start getting into the franchise space. And I met Jackie at IFA I want to say 2018. That sounds about right.
Speaker 3:And it was a random dinner and she walked in. I never met her before, but we've all been to our first IFA Some of us it's hard to remember, but we've all been to our first IFA and it's intimidating. There's 5,000 people there, big brands, and she had the look of the first IFA on her face and I didn't know her and I just walked up to her and I said, hey, just so you know, there's 5,000 people here. Nobody knows what they're doing, myself included. We've just learned to fake it and I didn't know this at the time. But she really appreciated that and she said to herself I'm going to hire that man one day. I had no idea. We kind of just hit it off and I would say I consulted pro bono, if you could use the word consulting.
Speaker 3:I really hopped on a call with her once a quarter as she was kind of growing the franchise brand and it's like oh, here's what I think here's another way to think about it, think here's another way to think about it.
Speaker 3:And then in 2021, the brand had gotten to 18 locations and we started kind of having a conversation about maybe me coming aboard.
Speaker 3:And something that I really kind of positioned to early stage franchise brands is that importance of bringing in the people with the franchising experience to marry that with the founders that have the brand experience and I say you may not be able to afford to bring it in today, but if you want to guarantee that you're able to afford it in a year or two, you want to do it earlier. And so when I came in, really what I focus on because I learned franchising from a founder-led brand is really honoring and understanding the magic of what the founder brings to the brand and really kind of parsing out what makes that brand different from what could be seen as a sacred cow and then kind of identify the different hurdles that an emerging brand will inevitably go through from branding and marketing and systems and brand standards, manuals and all these things prioritize those and then kind of help bring in the franchise infrastructure to help that brand grow to the next level.
Speaker 3:You really had a very young crew when you brought me in Very beginning yes, yes, usually, and just kind of my niche, usually when I'm coming in, it's a smaller group of team members, usually quite a few from the corporate stores, maybe a director level person or a manager level person, and then I'm really kind of going deep into the day to day and then, as the brand grows, start bringing in, you know, higher level folks with five, 10 years of experience, versus two to three years.
Speaker 2:But I think you said something that's really key and I've often quoted Shelley Sun's book Grow Smart, risk Less that you're planning ahead and you're hiring the person not who's fitting your need today, but the one who's going to fit that three or five-year goal, and you've got to figure out how to get the funds to do that. And I met some of your new team at the Operation Summit. They're very impressive, thank you, and really hungry to learn even more, so I love seeing that.
Speaker 3:The point I'd use there and this may be helpful for the listeners is you want to hire to growth, not hire to cash, and that's really hard to do. Could you say?
Speaker 2:that again.
Speaker 3:Hire to growth, not hire to cash, and I'm not saying it's easy to do, but we sometimes forget that when you're hiring somebody, it takes three to six months to really get them onboarded and to learn the nuances of the new company and all those things. So you really want to identify hey, I need that seat. Let's just say I want to hire, I need, I'm going to need that person Q4 of 2025. That means I need to hire them in Q1 of 2025. And so how you're managing your cash and all those things become really, really critical to ensure you're building up your team ahead of the growth that will hopefully be coming.
Speaker 2:So you'd actually have to start your search, probably Q4 of 2024. Exactly To get people. So then your budget is already set. You know you're slotting that person in right.
Speaker 3:Yes.
Speaker 2:Okay, all right. What do you say, though, to a brand that really is cash poor? They understand the concept, but it's going to take them a while to accumulate that kind of cash. What would you recommend to a brand to do that in the interim?
Speaker 3:So where that really recommend to a brand to do that in the interim. So where that really keys into and this is the big conversation always in emerging and in franchising is don't fall into the trap of overselling to get cash, because all you're doing is adding more and it will eventually tip over, whether that's two years, four years or five years. So the first thing I, when I work with a founder, and this is a general out.
Speaker 3:It's a general statement. It's a general statement is, you know, after I'm kind of coming aboard whether it's fractional or in-house bringing in somebody with really amazing VP of finance, cfo type of skill sets so that we can create modeling financially of the growth that we're looking to achieve and how that ends up affecting things years down the line. So a brand could be like hey, I sold 20 units this year. Ok, how long does it take for those 20 to get open and what's the team you need to support those 20? So, yeah, you have a short term cash influx from the sale, but there's going to be a cost to opening that store and supporting that store over the next 10 years and you really want to model that out to make sure you're not tipping too heavy one way or the other.
Speaker 3:Just coming from the Emerging Brand Conference, a lot of the founders that I would speak to there is like hey, before you even really get into getting your FDD and trying to sell anything, let's really look at the capitalization that you have before you even start. And that can come from a lot of different ways. It depends on the brand. Maybe you have five corporate stores, six corporate stores. Okay, maybe there's some cash coming from those stores that can help fund this. Do you have access to capital that you're able to go get? You don't need it all at once, but over the next X amount of years. Let's really kind of make sure you're going to be able to do that. But if you only have one or two corporate stores are thrown off some capital but the founder's living off that capital, so there's only a little bit left and there's no ability to go get any other capital before you start franchising. You have to go solve that problem before you even get into trying to grow this brand.
Speaker 2:Well, that brings up an interesting point, that that should be a flag that you really shouldn't franchise, because if you're just able to live off these one or two units now, top off that you're taking 10 or 12. I just read an FDD the other day for a home service business where they are taking out 24% off the gross. If you couldn't afford to get that kind of money when you were running it on your own, how can you afford for that to be a franchise?
Speaker 3:yeah, and I think that's uh, it's such a great movement within the franchise industry. It's kind of understanding that we, we want, we all want to do this well, and it starts at the very beginning, when people are starting to franchise, and because the world is different than it was even when I started franchising. When I started, there was a way forward to have X amount of capital and then you start franchising and you could kind of piece it together. But in this day and age it's a lot harder and you do need an extra bit of capital, whichever way you get it, before you even get your FTD and start selling it, or it may mean that you need to grow slower over time.
Speaker 3:I'm kind of really going in the weeds, but that decision really is going to tie into your market. So, uh, if you're, I'll just pick something that's really popular. If you're the next sandwich shop, that's a very competitive space. Again, that's a race on real estate. That's a race for market share, um, versus maybe something that's a little bit more unique. There's going to be some people looking to rip you off over the next couple of years. But you can kind of you have to kind of evaluate it from these different perspectives.
Speaker 2:That's such a key thing and I've shared that with a lot of people who don't do business with me. I always think my business model is to talk people out of franchising, because there's a moral obligation. If you're going to take people who are refinancing their retirement fund to be your franchisee, you better have your act together. But I really want to sit down and make sure, do you know, you're not going to go out and sell a hundred in your first year? And if you are a sandwich shop, if you are dog, care not to denigrate what we're talking about here. It is not technology that someone's going to steal. You didn't invent it. You've refined it. So take your time and do it right. But let's get back to Hounstown, because you must have recognized so much of this in the brand. So where did you start in trying to turn this around? Because I know you made cultural changes just because we were changing some of the vocabulary we were using as we were writing the manuals.
Speaker 3:Yeah, so this is a question that we get a lot at Houndstown. We're proud of the question. It really does start with culture, and when I talk about culture, a lot of times it can be seen as this buzzword. Everybody talks about culture and how important it is, and that's all absolutely true, but what sometimes happens is that people then look at culture as this thing you have to go do, and the way I like to look at it is that culture is a part of your business, the same way operations, marketing, sales, finance, and it's really the driving point of all these things that you do, and it really needs to be closer to you than your very breath. It's everything. So when I first came in, part of that is every person that works at Houndstown has the title cultural co-founder, and what that means is that we are all creating this culture every single day, every minute of the day together.
Speaker 3:And then it's really kind of identifying what is our just cause. Why are we doing this? What's the purpose behind all of this? And that usually in franchising kind of connects between the brand's purpose and the franchising component of it. Because the franchising part of it is so critical? Because we are working with Americans who are usually putting in a good portion, if not all, of their life savings on the line because they have this dream they're looking to achieve. So let's kind of really get crystal clear about why we are doing this and encapsulate the franchise and the brand kind of purpose. Then now let's go into the strategies and the tactics.
Speaker 3:And you know not as it's a plug, but it's a legitimate one. But such an oversight that I often see with younger brands is not having a professionally done brand standards manual. The founder typically is like, oh, and they get like some random copy from some other brand they don't know, and they kind of put it in together and it's really almost more of an operations manual, which you also need, but it doesn't really lay out the standard of the brand. Hey, this is what makes us different. Hey, you franchisee have to do these things. It's sacrosanct. And then here are the best practices to get there. So when we worked here at Houndstown, I think I was hired in 21, and we did it in 22. We started it in late 21, if I remember correctly, because that is so critical of your foundation as you're looking to bring in other franchises.
Speaker 2:I think that's so important. You hear a lot about culture, culture, culture, and people write it on a page or put it on a graphic in the office, but they don't really live it and I think it makes a huge difference when you get them to live it. We've all experienced these days as some angst has been growing, just personal. We're not handling things as well as we used to, and I know that sometimes you might go into a store or a service and customers may have been unkind to an employee, but the employees snap too fast because they don't understand what's their role and that you can still not have to take the garbage but disarm somebody who's unhappy a different way, whether it's a coworker or a franchisee or a customer in that franchise organization.
Speaker 3:Yeah, it really brings it all together. And so now you're attracting franchisees that align with your purpose. They align with the values and how you do the business, and that's the other part I like to do and I'm kind of gearing this towards like an emerging brand in a way, but I also like to for any franchisees is laying out the stages that the brand is going to go through over the next five to 10 years, because typically it's all founder in the beginning and now you're getting other people coming in and systems are coming in, and it's identifying how this brand is going to evolve, but why it's going to serve all of us and why it's important to grow the franchise brand that way.
Speaker 2:Okay, I'm going to take this conversation on a big right turn here, do you find, though? Yes, it's going to grow and evolve, but some things will always turn around and set you back to the beginning, and this has been a question that's been bugging me for a few years which would be with the investments from private equity. Their raison d'etre is different than the founders was, and they may like the culture, but the culture might be a little expensive in that it might slow things down, it might make you a little too particular. Am I alone in seeing that, because I just keep thinking that's going to be an issue one of these days.
Speaker 3:Yeah, no, I think it's one of the biggest topics in franchising right now and there's a lot of people smarter than me speaking to it but the role of private equity that is in it and I think it is important for a founder to understand that there is not one answer for your brand and I think that's just coming back from emerging. It can feel like a firehose for a founder as they're starting because you hear it's like you have to do it this way. Well, there's actually a lot of different ways to do it. You need to find the way that works for your brand and so, if you are looking to raise capital through a private equity partner, set it up so that you're driving the decision, not that you have to go do it because you're running out of money, and if you don't go do it, you're in a really bad place. And now, if you can drive it and set up the time to do it correctly, make sure you're finding that partner that is also aligning with your culture and yes, cultures at times has a cost. Of course it does, but also look at the return on investment on it.
Speaker 3:So I think I'm very proud of is we've had very little turnover at Houndstown in three years? I'm sure we will, every brand does but we've had very, very little. That is a huge cost savings if you're just looking at it from a numbers perspective. Because you're not out there hiring, you're not out there having to retrain and kind of do all these different things that's private equity or an individual investor. That's aligning with your brand. It's no different than when you're looking to attract a franchisee to your brand. It's the same thing, just a different category.
Speaker 2:Interesting. And, by the way, don't downplay that you have had low turnover in three years. It means you're also selecting your franchisees well, because too many get in and the pitch was great and the dream was sold, but the reality wasn't. So it sounds like you've, and they leave, not for any fault of their own, not that the system doesn't work, it's just not a good fit. So if you're holding in most of your franchisees at this point, that's a great sign and, yes, there's always turnover.
Speaker 3:but for different reasons. It's ensuring that the franchise recruitment stage is tied into real estate, construction operations, marketing and finance. They all have to be part of the same orchestra. But too often, and especially not knocking it. But if you're using an outside sales organization, it's harder to get them all on the same page. But whether it's an outside sales organization or it's in-house, you as the founder or the person running the franchise brand have to really take and tie how all those things are coming together. So we really focus on making sure that people from our ops and marketing team are part of the recruitment process. So, gosh, you know, if we end up saying, hey, we do this, and they say we don't do that anymore, oh gosh, we got it.
Speaker 3:We got to change that messaging. Because the expectations we form in recruitment leads here, and the phrase I like to use is that there's a big difference between mismanaged expectations and a broken promise, and the franchisor will often just say, oh, we mismanaged that expectation, but to the franchisee they feel like a promise was broken. Well, that's harder to emotionally recover from versus a mismanaged expectation. It's a trust issue. It's a trust issue. So you really have to lean into that communication and understand that a person who's looking to buy the franchise. Yeah, they're in what's known as the glee stage. This is exciting. It's the dream. How they hear information is different than how an individual would hear that information at a different stage. So you have to really ensure you're communicating very, very clearly.
Speaker 2:So let's put this into practical application.
Speaker 3:You said when you went over to Hounstown, USA, there were 18 units 18, and we'll be close to 80 by the end of this year, that's so cool.
Speaker 2:So, how did you bring those 18 along? And here's where I'm going with the question. In the franchise sales process you're going to have validation. Are they validating what will be or what was? And then is there that mismanaged expectation with the prospective franchising.
Speaker 3:Yeah, so it's a layered answer.
Speaker 3:I'll try to make it as exciting as I can, so something that I like to try to do is, within that validation or peer review, is, have a cross section of your franchisee, so it's not just your old folks that have been open five plus years, it's also somebody who's been open three years, somebody who just opened a year ago, maybe even somebody opened up six months ago, so that the person who's looking at your brand can really kind of understand that cross-section.
Speaker 3:And then it's really working with anybody who is communicating anything during that process on what we want to say.
Speaker 3:I don't want you just saying, oh, everything's great, no, talk about a problem that you had with the brand, but most importantly, talk about how we resolved the problem, because there will be problems, there will be things that don't go as planned, there will be things where we're not on the same page.
Speaker 3:But what is really critical is being able to say, but here's how we resolved it, here's how we lived our values and here's how we kind of navigated those waters. So it's working with those folks. That kind of identify that and letting prospects know, hey, when you're talking to this person in peer review, that. And letting prospects know, hey, when you're talking to this person in peer review, they're speaking to this what it looks like at five or 10 years this person is going to speak to. What's it like to go through real estate and construction and all those different things, and we make sure that our folks that are on peer review are really knowledgeable of all the different things that we are putting into place so they can speak to. Oh, I didn't have that. I'm so glad the brand has put that in place.
Speaker 2:That's key. But here's what I know that a lot of our listeners are people who are contemplating or are new and emerging franchisors themselves. So if I had my 18 units open, I don't have that person who's just opened for six months. What do you do first? Do you put a slight pause in development while you engage those franchisees, or are you trying to build the airplane in the air?
Speaker 3:It all depends on the brand and so, in a way, I was set up for success and you can call it even luck. Is that the overall foundational elements that Jackie had put in place and again, this is a great messaging to other founders. She was very humble in her approach to franchising. I don't know what. I don't know Really leaned into IFA people that didn't know, and so the foundation when I came in was really solid.
Speaker 3:There have been brands I've come into where that foundation isn't as solid and, yes, in that situation I have certainly said we are either going to really scale back franchise recruitment, if not even pause it, so we're going to take a year, if not longer, to build up that infrastructure first so that we're ensuring that whatever we're putting out in the marketplace has that solid foundation. If you do have the solid foundation and, yeah, your franchisees that are validating you're young, that's okay. Just speak to where you are truthfully and then speak to what the growth plan is for the next three years. And I think that sometimes and I understand it for an emerging brand, let's say 15 units, the founders doing everything. They're not thinking three years ahead.
Speaker 2:So you're making it to next payroll? Yeah, they're just trying to get the day.
Speaker 3:So what can you do? I'm not saying it's easy, but being able to go to your franchisees and say this is our three year plan. It's going to change based on what happens, but as of today, this is where we want to be in one year, two years and three years. Here's how many units it looks like. Here's how we're looking to grow the average unit volume. Here's how we're looking to increase profitability. Here are the training systems we're looking to do and, just as important as the tactics, really communicate the context and the why behind why they're important, so that we can all be on the same page on the purpose of what we're doing.
Speaker 2:So these and I agree with everything you said Now I'm looking at how did you implement, what did you implement to get this amazing turnaround and sustained growth with the brand?
Speaker 3:Well for Houndstown. So I kind of mentioned earlier there's always these kind of 10 hurdles for an emerging brand and, to kind of keep it tight, it's usually around technology, the brand. So how is? How is the brand being represented externally? So the emerging brand is usually has market share in a core market but they haven't expanded out of there yet. How are you marketing it? So a lot of emerging brands have customer retention programs but they don't have acquisition programs and then training. So it kind of consolidated there. So Halstown has some really great things in place.
Speaker 3:But one area was brand. The brand was a little dated. It was created in 2000. It had been on Long Island. That was the motherland, it was the creme de la creme of Long Island. But we needed to go through what you can call a brand pivot or a brand evolution, whatever word you needed to use. But we needed to freshen up the brand evolution, whatever word you needed to use, but we needed to freshen up the brand. So that became one of our first initiatives so that could then be on our website and then help our stores open better, faster and quicker.
Speaker 3:The second area that we really needed to focus on was technology, the point of sale machine that was in place was a really good point of sale machine at the unit level, but we had no ability to get enterprise reporting out of it. We literally had to log into individual stores, pull reports out as a PDF and then copy it into an Excel spreadsheet. That's not scalable, no. So we had to go through and kind of find another point of sale machine, and I'll be the first one to hold up my hand and say that's hard, no matter how you do it and what you do. But as I'm learning for other brands, we moved a little quick on it. We didn't move slow enough and we had to kind of launch it quickly, which of course created some very understandable angst within the system and there were some things we could have done better there. But having to move into a more sophisticated technology platform was critical for us to be able to grow the way that we grew Today.
Speaker 2:That's so important. A quick aside if listeners, you're hearing a buzzing in the background. I think my office is being attacked by drones, so I'm not quite sure what that is. But yes, technology is a key piece and something else I think a lot of founders don't budget for, and I'm going to put a lot of the responsibility for some of this stuff on the supplier world. Don't make a deal or don't try and sell somebody that you know isn't ready to franchise. Tell them the truth and then they will be there when they are ready to franchise.
Speaker 3:Yeah, I love that you mentioned that. I'm going to throw this out. This is a big message I was attempting to kind of communicate. I get it. You're hearing all these different things that you need and you probably will need them, but know when you need them is just as important. So will you need an internet? Yes. Do you need it at store three? No. You can manage a lot of your things with a free Excel sheet, sharepoint, google Docs. Whatever you're doing, have that be part of your plan. But I see a lot of times they go get a very amazing technology platform that's very expensive and they bring it in so early and now that's money. It's a zero sum game. So that money you're spending on that technology could have gone to a head of marketing. So analyzing all those things is very critical to just knowing when you need to spend the money is just as important as what you spend the money on.
Speaker 2:There are so many options too, so many. Where do you see what's the vision now for the next five years for the brand?
Speaker 3:Yeah, so Houndstown. Our 10-year target is that every dog in America has access to Houndstown.
Speaker 2:And what I really I'm sorry, I just got this vision of dogs driving over with a credit card in their hands.
Speaker 3:We should make a graphic over that. That a dog in fairbanks, alaska, um. But what's critical but when I I communicate about that 10-year target is absolutely we. We look at store openings as a, as a metric to understand what we're doing next year, whatever. But we're not attached to an overall store location number. What's important to me is how are we raising unit volume and how are we increasing profitability at the unit level, the stores? If you're doing that, the store opening will take care of itself. So over the next three to five years, now that we spent the past three years really building the infrastructure in place, now it gets pretty exciting because now we can really take a look at what is the essence of the brand, our dog management approach and the way we kind of look at dogs and see underneath that brand umbrella where we can add and expand our messaging even outside of brick and mortar to reach more and more people across the country, to kind of see how we approach dog management.
Speaker 2:Interesting, so you're switching from an infrastructure role to a marketing role.
Speaker 3:Yeah, it's almost more of now that the infrastructure is there, the plane is built. Where can we fly the plane and where do we want to fly the plane?
Speaker 2:Well, I think it's a natural the way you say it. It's a natural progression because franchising isn't a business model Even business model franchising isn't. It's a marketing and distribution model. So you do have to make that switch at some point. So that's a great insight.
Speaker 3:Yeah, it's really about now. We're talking about brand. So how do we expand our brand? So how do we expand our brand? With franchisees, of course, but how is this brand getting out there more and how do we go do that? But sometimes, if you're too focused on that in the beginning, you're using the analogy or touching on it. You're learning to fly the plane while you're building the plane. Well, ideally, we're building the plane, then flying the plane. Now there's always an intersection and we've had the same intersection where I've been like oh man, we're kind of figuring out the plane and we're flying it. It's inevitable. But now that I would say our plane is built, it's a very exciting time for Houndstown. I couldn't be more excited about where we can now take it to, to that next level.
Speaker 2:Now you've got a new question that's popped into my head for me in the beginning, since we've been talking so much about emerging brands. You have to do a lot for the franchisees because you're as much testing as you are being a franchisor. Where do you see that tipping point where you use the pronoun we before we have to do more with the dogs. Well, when do you turn that part? Really, franchisees, that's your end. We're going to keep doing market research, we're going to keep looking at improving systems, but delivering the experience for the pet owners and for the dogs, that's on you.
Speaker 3:Yeah. So the analogy I use and I don't think I came up, maybe I got the analogy from you, I don't know. I'm a fan of R&D, rip off and duplicate. So you know, somebody should get the credit for this phrase. Ok, and train you on how to drive the car.
Speaker 3:But just as important, the role of the franchisor is to make sure that that car is at the leading edge of the market. So the same way that your Ford Escort gets upgrades every year and sometimes they're just small upgrades and then one year it's like a major upgrade that's what the franchisor's role is. The franchisee's role is to deliver this and drive this car so that ultimately, to the end consumer, that's what they're getting. And this is nuanced in franchising because there's kind of layers to what you're doing. But the franchisor can never forget that at the end of the day, even for us, for dogs, there is a human that is paying for the dog. So what is the end consumer experience? And how are you training your franchisees to deliver that end experience for the consumer? That's what will help drive the brand as a whole. Just kind of a different nuance to it if you were just all corporately owned.
Speaker 2:Okay, I like that I like my analogy. That wasn't my analogy, but I'll be happy to take credit for it. Okay, we should take credit for it too. Okay, we should take credit for it too. Coming up, I mean, I know that this 2024, maybe any election year is always just people unsure what's going to happen next. What do you see in the horizon as far as opportunities in franchising, and what do you see as things that might be obstacles?
Speaker 3:Well, I think one of the bigger obstacles not just franchising, it's certainly macro business everything is interest rates and, without getting into the whole political argument there, but it is certainly things that I've seen in my system that has really affected my franchises.
Speaker 3:So they kind of came in and interest rate was here it's now much higher. That affects their liquidity, it affects their cash, it affects their ability to potentially open up more locations. So I am certainly kind of keeping a very close eye on interest rates and how that's kind of affecting the economy and the business landscape as a whole for sure. And then I'm very curious, just within the space of franchising, to what we spoke to before, is that role of private equity that is more and more prevalent. It is what it is. I understand why private equity is looking at it, but I'm very curious to see how, over the next two, if not three years, how that kind of ends up shaking out and do we start seeing that that is the way to go. Is it really you could go that way or this way, or does it maybe just slow down? I don't know the answer, but I'm certainly very curious to see what happens there.
Speaker 2:Oh man, if you knew the answer, you could retire on just telling people Crystal ball, tarot cards, don't care what it takes, just give them the answer. Last question Okay, you have, and I just forgot it. I was just saying, having come out of a couple of conferences just recently, what do you see as the state of franchising or who's in the business and what's going to carry us forward?
Speaker 3:Well, I'm very excited and very proud to be part of a franchise and at its core, it is such a powerful vehicle for individuals who want to often achieve a dream.
Speaker 3:What we call it at Housetown is the journey to freedom that every franchisee wants to be free freedom from corporate America, financial freedom, freedom to be with their families.
Speaker 3:It takes a lot of work to get free, but it is a vehicle to get there, and the more that I see franchising lean into the heart of that, the better franchising is, and I shared it at that one conference. I won't tell that whole story again, but it's a story of a franchisee that did everything right. The business closed because the anchor next to it closed and he was in his 60s and he had put a lot, if not all, of his life savings on the line, and I don't think anybody in franchising should ever forget that any moment of any day ever. It is critical to remember that what we're doing, yes, is serving our end consumer, but we also have a sacred responsibility to honor that. Our franchisees are putting a lot of their own money on the line and I am seeing a lot from IFA and franchising as a whole leaning into that component, and we can always do better in that area.
Speaker 2:Boy amen to that I always look at. I keep saying franchisees are getting younger. No, I'm getting older, they just look younger to me. But if you have somebody like the gentleman you're talking about, even younger. Let's say I'm in my early 50s and I step out of corporate America to try a brand and it doesn't work. And it really doesn't matter if it was just the franchisee not being capitalized or the Zor not being capitalized or support, but that person doesn't. If you don't do well at a brand and you're a franchise executive, you get another shot at another brand, but you don't get another shot with another franchise if you've put all your money into the one. So when you said the word sacred, I just popped my eyes open because I do believe that and I think that for every new franchisor who's out there and some of the executives who are coming into the model new, you can't forget that it's so important. Thank you for sharing that. I appreciate it.
Speaker 3:It's a line I share with my team is that when you're on a call with a franchisee, there's two of us on the call. Only one of us has everything on the line, and it's not me.
Speaker 2:Boy, you make it sound so simple.
Speaker 3:Yeah, yeah, and I also try to tie that into the founders as well. So founders are usually in a similar capacity. They've put everything on the line. They're not going to necessarily just get back into the workforce or they could, but that's man, they really don't want to. And so it's also for any kind of executive, franchising person that is working for a brand that does have the founder as a big part of it, like we do. It is also having that empathy and understanding for their emotional journey that is happening.
Speaker 2:I agree, thank you. Thank you so much. If people want to know more about Houndstown, or maybe tap into some of the incredible wisdom you shared, how can they reach you?
Speaker 3:So you can always reach me at robathoundstownusacom. That's the best way to get in touch with me. My other joke there is a carrier pigeon. And then our website, houndstownusacom, is a great place to learn everything and anything you would possibly want to learn about Hounstown.
Speaker 2:Well, thank you, and I appreciate your time, your generous spirit. I mean what you do with your franchisees. You've certainly done for the franchise community here and I appreciate that it's all given back.
Speaker 3:I've been blessed to have folks like you and other mentors give so much of their time to me. I feel it's a blessing to have reached a certain stage where I can also start giving back, and it's an honor to be able to do so.
Speaker 2:It's kind of cool. I think that's what makes franchising pretty neat. We are appreciative of that and for my listeners I say this each time If you have a story about your brand that you want to share, or if you know a brand that you think should be highlighted, please reach out to us. You can reach me at info at franwisenet. So once again, rob from Houndstown USA, thank you so much and to everybody, hope you have good holidays.
Speaker 1:Bye. What's your F-ing Business is created by O'Connell Company Inc and Franwise. It is written and directed by Marianne O'Connell, Technical mastering by Ryan Cleary. Our theme music was written and performed by Sean J O'Connell and Leviathan Brothers and is available on Spotify. All rights to this podcast and music are reserved.