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WHAT IS A JOINT EMPLOYER RULING AND WHY SHOULD ANYONE CARE?

The National Labor Relations Board (NRLB) ruling that McDonalds is a “joint employer” of all of the employees of its franchisees has taken the next step in the process. The Service Employees Union (SEUI) has forced the issue by saying that McDonalds and its franchisees have engaged in anti-union activity. Although no one wants to say it yet but an administrative ruling would most likely allow the union to force union membership on every employee of every franchisee in the United States.
The battle has now gone to a series of three administrative hearings run by the NRLB. Opposition to this ruling has come from the International Franchise Association, BNA, and the US Chamber of Commerce. This is a serious threat to the whole concept of franchising and although there are many steps franchisors can take protect their systems it still could lead to expensive litigation that could force union membership on millions of workers. Right to Work laws at the state level help in some states but using the joint employer theory is a big reach that if enacted would be something to shake franchising which is 14% of the US private economy and growing faster than the over all economy.
At the same time the SEUI has bankrolled the “Fight for $15” demonstration to put more pressure on franchisors and attempt to add credibility to their efforts.
For those of us that are slightly paranoid this whole thing smells of payback to the unions. With union membership dropping dramatically this would give the unions a chance regain membership despite the job losses it would cause. It is important to remember in this that it all started with the NRLB board being appointed while congress was still in session but under a provision that allows the President to make appointments when Congress is not in session. That gave the board a union controlled membership and now it is time for the unions to collect on all their campaign support dollars.
Keep an eye on these hearings.

This is your look at issues in franchising with facts and opinions by Jack Eberenz. If someone says “franchising” you say “call Jack”. ™
Jack Eberenz, jack@franway.com, 602-625-5106

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Sometimes all we have to do is look to nature to learn more about business.

LESSONS FROM THE GEESE

LESSONS FROM THE GEESE
As each bird flaps its wings, it creates an uplift for others behind him. There is 71% more flying range in V-formation than flying alone.
Lesson: People who share a common direction and sense of common purpose can get there quicker.Whenever a goose flies out of formation, it quickly feels the drag and tries to get back in position.
Lesson: It’s harder to do something alone than together.

When the lead goose gets tired, it rotates back into the formation and another goose flies at the head.
Lesson: Shared leadership and interdependence give us each a chance to lead as well as opportunities to rest.

The geese in formation honk from behind to encourage those in front to keep up their speed.
Lesson: We need to make sure our honking is encouraging and not discouraging.

When a goose gets sick or wounded and falls, two geese fall out and stay with it until it revives or dies. Then they catch up and join another flock.
Lesson: Stand by your colleagues in difficult times as well as in good.

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“SENSING”: USING EXPERIENCE AS A TOOL

As a businessperson you accumulate experience over years of business activity, that experience becomes your inventory of knowledge that allows you to see patterns in what is happening in business. Those patterns that occur in a business situation allow you to analyze the pattern and make decisions based on a very few indicators, rather than have to mentally process a complex or even chaotic set of inputs.

Maybe you have encountered businesspeople who want to analyze every problem with a complete due diligence check list that ends up looking like an encyclopedia. At that point they have so much information that they become frozen, unable to make a timely decision because they cannot mentally process all that information and make a decision.

You have heard people call that paralysis by analysis. But it’s not a joke it’s a real thing that happens to companies all the time.

The real value to accumulating experience is to have sufficient experience in many situations that allow you to spot one or two indicators fairly quickly and analyze the pattern to come up with a satisfactory course of action. This is what is referred to as “SENSING”. In other words you can make a fast decision because you sense the right course of action while only seeing a small set of facts.

We have to add here that this kind of sensing we are talking about is not just a matter of experience. It also involves understanding what you were sensing. There’s a strong analytical component involving reading, research and applied intelligence. Without the background of knowledge and understanding that allows you to appreciate these “sensings”, you might undergo these experiences and miss everything they’re trying to offer you.

Maybe an analogy to football would help to describe Sensing in a very simplified way. Joe Flacco is a great quarterback Super Bowl winning quarterback who can come out of the huddle and up to the line of scrimmage and look at one or two defensive players and sense if he had to call an audible change of play or not. He knew from experience that if certain players on this opponent’s defense were in certain positions what the defense was.

There are a lot of less successful quarterbacks who come out of the huddle and try to view the entire defense. With multiple sets and constant movement of the defense they only have one or two seconds to process a huge amount of information. With so much confusion they often make no decision, or the wrong decision, and disaster follows.

When we look at what companies are the most likely to succeed we use our experience, intuition and whatever else you want to call it to make a fast decision. The vast majority of the time we make the right decision and know almost immediately if a company is worth the effort and the risk to work with. Once we are working with them we use the same Sensing powers to help them avoid the wrong play call.

At the Board of Directors/Top Executive level it becomes even more critical. Judging strategic relationships, making merger/acquisition decisions, hiring key executives and many other things all become part of the judging process where you need your Sense tuned to the right indicators. The due diligence process may look at everything, but it is so much information and requires so much processing of complex issues that may be contradictory or confusing. A strong executive must be able to “sense” the right answer from a few key indicators, particularly in an entrepreneurial company.

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THE DUPLICABLE PRINCIPLE – EARNING VALUE THROUGH GROWTH RELIABLY

Every successful enterprise wants and needs to further its vision and to expand profitably in order to build sustainable advantage. To facilitate sustainability, processes must be integrated from their components in a form that is duplicable. Once integrated, the enterprise can further penetrate existing markets, or expand into new markets reliably to earn value through growth.

The value of an enterprise increases when it can build a network of successful duplicable activities. This approach has been used by enterprises such as HSBC, McDonald’s, Royal Dutch Shell, Starbucks, and Walmart to expand in both domestic and foreign markets as either corporate or franchise systems, or both.
The technique requires building a standardized business system from duplicable processes, functions, facilities and equipment with proven products and/or services in one market, that offer potential in others. The technique is applied most often by operators of bank branches, chain department stores, drug stores, fast-food restaurants, gas stations, and supermarkets. However, it is equally applicable to internal administrative departments and operational plants and warehouses.
The ingredients consist of a set of measurable, predictable, repeatable, and trainable processes that can be integrated together and with related functions, facilities, and equipment to form the business system itself. Standardized products and/or services are delivered through this highly routinized system as a bundle.
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