Smooth Is Fast: Joe Malmuth on how great franchise systems turn process into growth

Hey everybody, welcome to today's podcast. Super excited to have Joe Malmuth on with me today. For those who don't know, Joe is the chief development officer at Batteries Plus. He's in charge of growth, development, strategy. He's been doing it for 20 years. Joe, I think you were on the fran-dev side operations. You've head up franchisee relations. Also done that at UFG, I think it was well over 1,500 locations globally. The way that I found about you was through the IFA Mentorship Program, and I know you're super involved there. Also a father of four. Unbelievable story.

I'm not gonna do it justice, so I wanna turn it over to you first. For being on, Joe.

No problem, man, and thanks for having me. When you say unbelievable story, that doesn't necessarily mean it's particularly entertaining for certain segments of the audience. So I'll try to, try to spare people from, from the, the torture of that. But no, I mean, like you said, better part of 20 years I've been doing this.

I have essentially held just about every standard position that you can have in a franchise company over the course of my career, and always kind of found my way back into, to the development side of the house. And, and, you know, you'll f- everybody will find out on this podcast and, and, and the other, the other, stuff that I've done out there, anybody that knows me, like my wife always tells me, she's like, "I don't know how you did this, but you were in the perfect job because you get paid to talk for a living and you never shut up.

So somehow it worked out for you, kid. More power to you." So, but yeah, and, you know, very much involved in, in the f- the industry of franchising at large and, and, you know, mentor with the IFA. Have been on the board at a couple of different universities for their franchise bachelor's and master's program.

I'm on the membersh- membership committee with the IFA, the Franchisor Forum. Also sit on the board for the annual Franchise Development Report and the Franchise Leadership and Development Conference. And so-- And I actually wrote a book on franchising, which is out there on Amazon too. So, and some people are really, really obsessed with sports, and they can tell you, like, the full statistical lineup of, like, the 1971 Mets or something like that.

I'm that way with franchising, and it's weird.

Yeah. How did

Yeah.

To it originally?

Of-- Like everybody else, man, fell right into it. You know, I thought, I thought at one point... You know, if you go back over, over the life of Joe Malmuth, which is, like I said, not all that interesting. At one point, I thought I was gonna wind up in, like, Mötley Crüe or something.

That clearly didn't work out. So then I went to fire school, while I was in school finishing up my bachelor's degree, and, you know, realized, I hate school, and I don't want to be tied to a desk, and blah, blah, blah. Those firefighter dudes are-- well, you know, they do some pretty cool stuff, and, it seems a lot easier for them to get phone numbers than it would be for a desk guy to get phone numbers at the time.

I was single. And, you know, from there sort of fell into franchising. There's more nuance to that story, but that's sort of the, the career hopping gist of it, and there's some overlap in, in both of those careers for a little while. But, but yeah, I, I just sort of fell into franchising. I had a buddy that I grew up with who was working at United Franchise Group at the time, and went to lunch with him one afternoon, got to talking about stuff.

He invited me back to come check out my office and my headquarters, and, like, randomly got offered a job while I was there. And, you know, here we are, here, you know, almost, almost, a dec- 20 years later or whatever it is. And, we're doing the thing at Batteries Plus.

Awesome. I love it. Joe, I want to ask you about development just 'cause I, I know it's what you do now, and that's what I'm curious about. And a lot of what, you know, we've talked about and what you hear in franchising is, you

Mm-hmm.

Sufficiency and reaching that critical mass, and the idea that scale is the goal, right?

Once you hit scale, then you can start do creative things, then you can start, finding stability. But

Mm-hmm.

A lot of what I'm hearing from folks is that it's actually a little bit of the inverse, where systems feel simpler at 50 rather than or 500, and it, it's, it's a little bit of a, a flip-flop. And I, I think it's something you've experienced, so I was wondering if you could share just a little bit of why that

Yeah. Yeah. Think about it like this, right? If you look at the engine of a Model T and you look at the engine of a Maybach, what's the simpler engine, right? The, the Ford Model T was certainly the simpler engine, but I don't wanna drive one. You know what I mean? I'll take the Maybach all day long. And what you're talking about here is, is, is, it's the pain of growth at the end of the day.

And a lot of franchise systems, especially founder-led ones or, or family-led offices, if you will, get into this situation where they've developed a way of doing things that is very mom and pop. But as the brand grows and scales, they start to have more demands that are, that are pulling their infrastructure or the needs of the system in an enterprise direction.

And there's a lot of steps along that path. But the more you pull into a, a enterprise type of a direction, the less the mom-and-pop, methodology works. And i-i-- what you f-- and some of that was at Batteries Plus when I... I've been here six years, and some of that existed six years ago, and we've had to, to tighten it up and, and change some things.

And what you'll see a lot of times in those systems that are sort of at those inflection points, you got a couple, three people in the organization that are like the source of truth for everything because they've been there for forever. You know, a-and the problem with that is, as a mom and pop, that works fine, right?

'Cause you just go down the hall and, and talk to Jim and, and get the answer to what you need. But when you're at a certain scale, you've grown past that. You have to be able to decentralize that information. And oftentimes, if you start getting to that, that place, that person's probably nearing the end of their career anyway, right?

So what happens when they ride off into the sunset on the sailboat or whatever that next chapter looks like for them, and all of that knowledge base is gone. So, so it's, it's the same, idea that write it down so that it exists in perpetuity, create an SOP out of it, and so forth. And, and, and essentially, what you're talking about is the, the tenets of that, of, the E-Myth, but at, at an enterprise level scale or, or somewhere on that, that trajectory.

And, and so s- yes, scale's important. Scale is the promise of franchising, right? At the end of the day. Franchisees, what do they want? They want brag net-- brand recognition. That takes scale. What do they want? Buying power. That takes scale. What do they want? World-class support available at their fingertips.

Well, that takes scale to do all of that stuff, and you can't scale forever on a mom-and-pop mentality. Does that m- does that make sense? Does that answer the question?

Yeah, it does. And it sounds like you're saying that it's about turning founder-led grit into process or, you know, w- kind of bottling the magic of the founder

Yep.

Might not be around, right? And I, I guess that

Yeah

But, you know, my thinking was always that build a system off of good fundamentals, and every CDO I know that is really focused on scale is just, like, knee-deep in the operations.

All they wanna talk about is the P&L, 'cause that's what... That's how

Yeah.

Right, is

Yeah

By offering people something that's reliable and proven.

Mm-hmm.

So it, it's kind of, it, it, it's a little backwards to me, right? It's like, well,

Yeah

Because of good fundamentals, and then shouldn't it be selling itself and just flying off the shelf?

Fundamentals are great, excuse me, fundamentals are great until the business evolves, and now those fundamentals aren't necessarily applicable, right? So, so... And pl-plus there's the reality. That, that's like the textbook answer, right? That's the, that's the theory answer. Like, fundamentals should be well-established in any business of any scale.

And the reality is it's... That that's not the case, right? There, there are a lot of organizations out there. Ask any investment banker, you know, "How many, how many big transactions do you do where, like, the books are crystal clear, and the path to answers and backup data is all readily available?" And they're like, "Yeah, never."

And we have to do a lot of forensic investigation to all these different layers of the company. Even, even companies that are, you know, like... I forget what it was, Dunkin' or whoever it was recently, or, or Dave's Hot Chicken, sure, you know, sold for some crazy multiple type of thing. I guarantee you, yeah, fundamentals are there, but they were there and established at a certain scale, and maybe not all of those fundamentals have evolved along with the business itself.

So, so, so you're right. But you have to contextualize that to, that's where they were. This is where they're going. This is the growing pain in between, and what's the eventuality? What's, what's the, the, the endpoint on the horizon they're trying to get to? And you're gonna have to... The business has to evolve, and so do those fundamentals.

So, you know, it's, it's like, you know, basket- So basketball's on everybody's mind right now 'cause of the Knicks, right? And I remember in...

Right

Dude, you, you've gotta be sitting in the happiest place on Earth. For the first time, it's not Disney, it's New York, right? So I... And I can remember, you know... So I grew up in, you know, the Michael Jordan era, right?

So, so I can remember desperately wanting to know everything I could find out about... Learn how to play basketball. I'm six four already, right? But it's just not gift... I'm not a gifted athlete. And so I, I can remember, like, the first, like, Little League basketball team I was on. They're teaching us how to shoot a basketball.

And this is gonna alienate half the audience, I'm sure, but it's hold the ball like this and flick your thumbs out, right? And then I'm watching everybody on TV. I said, "Nobody's doing that. Nobody's doing that. They're doing w- you know, one of these." And, you know, my dad, my dad's like, "Yeah, that's how you shot a basketball in 1950 when they took the bottom off of a peach bucket and stuck it up on the side of a barn."

He goes, "Nobody does it like that anymore. We're gonna put you on a different team 'cause your coach sucks." And, and so it, it's that kind of thing. Great fundamentals. They just don't apply to where basketball went. And so it's the same thing, it's the same thing in any business, not just franchising. Great fundamentals need to be in place.

That's true. But the, but the business itself at some point will take a life of its own and grow, and in often cases may grow past some of those fundamentals. You know, there are things, for example, with Batteries Plus, if you go... We really think about Batteries Plus in three distinct generations of franchisees, right?

So our, our, our first location was in, in Green Bay, Wisconsin in 1987. The first franchised location was 1992. And there is a difference between that initial location and the first franchise location. There's a-- And, and there's a difference between... And, you know, those owners are still in this. We still have our, our very first franchisee, which is-- Nobody can say that.

That's amazing. Then, you know, years go by, and you have this little cool little, oops, specialty retail business.

Yeah, that makes it

You're right. And, and we start to figure out there are other revenue streams here that are sort of adjacent to what we're doing, and we should start pulling that stuff in. You know, whether it's other specific product categories beyond batteries, like bulbs or device repair or whatever else, when all those different things came on.

But for us specifically, we realized there's a lot of commercial application to what this industry is all about, and we're only servicing the retail customer. So you think about it like you open up a restaurant and realize, "Oh, I could have a catering business that's run out of this restaurant with no overhead to the catering business because the overhead's handled by the restaurant customers," right?

And then there's a third generation, which is what we're living in right now, where that third generation is, "I'm not thinking about this as a retail play. I'm thinking about this as a business to business sales and service and solutions provider, and I'm gonna need a warehouse and logistics and distribution center for that business.

Why don't I slap a couple hundred show-- feet of showroom on the front of it and monetize it with foot traffic to cover the infrastructure expenses?" That's a dynamic shift between where we were thirty years ago, thirty-five years ago. And there are some fundamentals that do apply across the board, but the business that is Batteries Plus today is not the same business that it was thirty years ago.

And so a lot of times it, it-- that's the-- You can expect to have growing pains like that, but where I think it gets people is they can't predict what those growing pains are gonna be specifically, and that's where it kind of gets tough.

Well, now my question is how do you support growth through that, right? And, and I mean, it's a fantastic example, right? This idea that, you know, the main ones are it's the product, it's the franchisee base, and then it's marketing, right? And like marketing

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Is evolving, and that one I don't

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Much time on. But this idea that you are selling and you are expanding from one franchisee to hundreds, and at the same time you're also trying to change your business model, it's almost like supporting two very different growth vectors at the same time. And I'm curious how you think about that when you're trying to sell a franchisee on an established method of a multi-hundred-unit system, but at the same time they're looking at it and saying, "What you're selling me is a completely different operating model than

Mm-hmm.

Who I'm gonna talk to," right?

You're selling a new product in the same franchise system, and I, I... It's hard to think-- It's hard for me to wrap my head around that.

There's a, there-- This is gonna be like, I, I'm full of these, you know, weird analogies and metaphors, and there's one that I heard recently that no man ever eats the same stew twice because the stew changes and then s- and so does the man, right? And that's, that's a very true... And, and I, everybody gets that instantly.

Nobody in t- 2026 has a pot of like forever stew sitting on their, on their, you know, cooktop or whatever. But it's a, it's a very true statement for this, right? No franchisee ever buys the same franchise twice, right? 'Cause the, the brand that they bought at that time is a snapshot in a window of time of where were we in the evolution of this thing.

And the, the way you scale that, that ch- that's a question that evolves, too. It changes depending on where that franchise is at that moment in time. But what I, what I will say is there are fundamentals, right? So we'll bring, we'll bring the fundamental, point back into this. On the development side, you have to understand that there's being targeted and then there's being myopic.

There's a lot of new franchisors out there, that are, you know, they have this idea of, "Well, I have, you know, my flagship location that I've ran for the last X number of years in Miami, and I'd like to start by franchising in Fort Lauderdale," which is an hour away. Great It's probably not gonna happen like that.

You're gonna get a phone call from somebody in, you know, Paducah, Kentucky, or Boise, Idaho, or something who's, like, a perfect fit for this, and it's a great market, and they visited your Miami location on vacation, and they, they ready to go. And you have to decide, like, do you wanna s-- do you wanna support that, or are you really gonna sit around and wait for that perfect person to show up in Fort Lauderdale?

You may not grow for a long time if you're waiting to thread that perfect needle. For the-- on the operations and training and support side of the house, you know, you're just thinking about it from the lens of do I hire ahead of the curve, on the curve, or after the curve to provide that support mechanism?

And that's, that's a challenging question to answer that takes a lot of analysis. From, from marketing specifically, what you're talking about then is just you're just adding more dollars to the bucket. So how can I, how can I increase awareness? How can I increase reach and drive that, that customer traffic, whether it's, whether it's, you know, foot traffic or phone calls or whatever it may be.

And so, you know, no two businesses are the same and, and, and no two points in the history of the life cycle of that business are gonna be the same. And you have to constantly evaluate that. Having good, experienced mentors, is helpful big time, and I have had, n-- I've had amazing mentors in my life and, and have figured out a lot of things through learning from their experiences.

But also, you'd be surprised at the kind of mentorship that you can get... Maybe not surprised by this as I'm thinking about it out loud. Y- the, the, the kind of mentorship that you can get from your franchisees, right? You know, you know, we've-- you've got a franchisee out there that's living this every single day, and you form your franchise advisory council or these other various committees to get their, their, perspective on, "Hey, we've got this...

We have growth. That's great, but it's presenting these challenges, and we wanna make sure we navigate them intelligently." But, but I think at the end of the day, good, responsible franchising comes down to practical and logical decision-making. It-- Don't overcomplicate it, right? This is a simple thing. If you, if you think about it as through the lens of what's the practical, logical decision.

That means is it within budget? Is it within reach? Is it within something that we can support and scale to? And then if, if it checks those boxes and you've got some, some trusted advisors that have weighed in with you, if you're, if you're the leader of that particular franchise company or what have you, then all you have to do at that point is just make the next right decision.

You don't have to make this big, gigantic, sweeping thing. Just, just... If those are the rules of engagement, all you have to do is just make the next right call, and, and it becomes a lot easier when you break it down like that.

I like that. And it's-- And listen, I'm, I'm a founder. I get-- I ask for and get advice constantly, and I think that oftentimes in my head it's a trade-off, and people... Nobody

Mm-hmm.

As much context that I do, but it's always gonna be do I trade complexity for speed, right? The idea that I'm gonna support a more complex system that is harder to manage for speed, or am I gonna do something that's more sustainable?

It's gonna take me longer, but I'm gonna do it

Mm-hmm.

And I think, nowadays, right, when speed is

Mm-hmm. Yep

I think, it-- you listen to a lot of people, and you make your own decision. A, I'm curious how you think about that trade-off, which I'm sure you have to think about all the time, and B, I'm curious at how you navigate, you know, when you talk to a franchisee and you ask for their advice and you don't listen to their advice because of a number of reasons, how you navigate that as well.

So two very

Yeah.

Yeah.

The, a-as a, as a development guy at heart, my preclusion is to always choose speed first. And, and, and that sort of comes from the mindset, and I think this is a good business tenet in general, but nothing happens till something gets sold, right? And, and I tell every single franchisee on discovery day that exact point.

I say, "If I'm gonna give you one piece of advice here, nothing happens till something gets sold." You're always gonna have a, a, a bucket of back office stuff that you need to do and, and a light bill that you need to pay and a mirror that needs to get cleaned and whatever it is. Nothing can... None of that can happen till something gets sold.

And the magic here is if you do enough of that selling, those other things just sort of wind up taking care of themselves because you've got the resources to put towards it to get it handled. And that can be, troublesome for a lot of people. I've had franchisees at various brands over the years that get their locations open.

You know, one particular I'm thinking about is a brick and mortar location who was terrified to walk out the front door of his, of his new business and drum up sales because he felt they weren't perfect yet. And I was like, "Your rent doesn't care. Your rent doesn't care. If you get out there..." And he's like, "Well, if I get out there and I do an eighty percent job that should have been a hundred, I may burn that customer."

I'm like, "Yeah, you may be, but your rent got paid," right? You know, you know, "You're not going bankrupt, and they'll give you another shot if you build the relationship the right way. You are overthinking this." Now, that particular person couldn't get out of his own way, and this was ten, twelve years ago at a, at a different company.

And, you know, that's the challenge, right? For franchisees. It's also the challenge for franchisors is, is you have to think about it like nothing's gonna happen here till something gets sold, right? The sales h- sales and growth has to be paramount first, because without sales and growth, those, tenets, those promises that we make as a franchise system can't happen, and now you're failing the franchisee.

And that's, that's a philosophical question that, that franchisors wrestle with every day. And, you know, I've always found that nothing happens till something gets sold. This is the one... This is the next right choice then. We're making this decision before that decision. And so, what was the second part of that question?

I have a-- Yeah, I wanna s- ask you something there too, right? Because you said the... And what you're saying is, like, have a bias towards action, right? A bias

Yeah

Is not gonna fail you, rather than thoughtful design and, like, crafting the perfect plan before you execute, right? The idea is, like, come up with something that is intelligent, that has people's input, that has some semblance of

Mm-hmm

Among the group, and then do it. And it's imperfect, but it's, it's forward, which is the

Yeah

That really matters, and I agree with that. When is the time for reflection, for process? Because you do not get to the size of Batteries Plus without some process and thoughtful design. So how do you-- when is the time to, like, go, go, go, and when's the time to say, like, "All right.

I need to invest those dollars into process"?

Yeah. A-and, and for me specifically, at, at, at, in my role, you would be surprised how much time I spend brainstorming and thinking about things and mapping stuff out. It's way more than people expect. And, and for me, in just the way I'm wired, you know, I, I, I, I can-- I'm really good at having this mushroom cloud idea where I can see the entire thing zoomed all the way out.

But it's the zooming in to figure out step one, step two, step three is, is for me personally, that's harder for me. So I have to be careful that I don't have all of these amazing or terrible, big mushroom cloud ideas that I send everybody on wild goose chases. I have to sit down, think them through progressively, and go, "Okay, I see where the, the, the potholes are, the red flags, the green flags," what have you.

And, and at a certain level and scale of an organization, a certain tenure of an organization, that becomes super important, right? Because you've got, like I'm fortunate enough to have a really, really dynamic team who knows exactly what the heck they're doing, so that I am afforded the opportunity to, you know, be the idea guy.

And so, making that decision between action and impact and, and planning things out, I think is, so something that they teach in, in, in the fire academy, smooth is fast, right? And sometimes you have to make sure that before you go, you may have a great idea, you may not have all of it figured out, but you've done as much as you can to remove all the stumbling blocks before you take action, right?

Smooth is fast. You know, that, and that comes from, you know, when the tones go off and you're pulling up to, a situation, and you've gotta put on all your-- pull your coat on and zip it up, put the hood down, pull the mask on, put the helmet on, grab your tool, and go inside the burning building. If you don't practice that to be smooth when it's time to be fast, you're gonna miss a step.

And so, that's a big part of that world. And so I, I've brought that into this, right? Smooth is fast, right? Just planning doesn't mean it slows you down. Planning well with that practical, logical decision-making tree and these kinds of things and laying out a roadmap doesn't have to be exhaustive, but it's worth the time in most cases.

And, and it's, it's the when do you-- It's more about am I spending too much time doing it and making this convoluted, or am I, have I spent enough time that I've smoothed this, this path out as much as possible for us to give it a shot?

I like that. And smoothness, I, I mean, I'm imagining just process, right? This,

Mm-hmm.

If you were, you're saying fast is continuous motion, right? This idea of if you're constantly moving because you know what comes next, then you're always moving forward, even if you're not jolting, stopping,

Mm-hmm.

And I'm sure we felt that in process as I, I'm sure you've, you've seen it in Firehouse.

For sure

How do, how do you and your team build that muscle, right? And again, this is a, a uniquely challenge for you. You guys operate at a huge scale. You have new personnel coming in, you have processes, you have franchisees.

I know it sounds like many of them have been in it forever, but you always have franchisees coming in.

Right

You develop that muscle and that instinct in them?

Well, you go back to the smooth is fast thing, right? You know, you, you, if you've got a... Like we take the, the actual franchise development process itself, right? When I came on board with Batteries Plus, they're, they were in a transition period from a previous development program to the one that we've been running for the last six years, and there was this window in between that was sort of like a holdover where there wasn't much of a process at all.

And so the first thing you have to do is figure out what's, what's the appropriate process for this situation. You've gotta... You have to do that. You have to start with some sort of an idea of, you know, how this is gonna go. And then if you're smart, you will track every measurable piece of everything to the point of obsession on how that went.

And, and over the, over time, you refine that. And you get to a place now where, you know, our development program is so well refined, that it, it, it's almost autonomous in its operation, if that makes sense. It is, it is such a secondhand nature. You know, everybody can run that thing with it with blinders on and half asleep and, and not that they do that.

They do a, they do a very fantastic job, but, but they don't have to be, so acutely present in what they're doing because they're worried about, "What's this next thing I'm supposed to do? Oh, I can't forget to send that email." It's just click, click, click, and that is the smoothness that we're talking about.

And if you can get that smoothness in place, you start to be able to accelerate parts of that machine. And a, and a real-world example being, you know, I mentioned that I'm, I'm on the, on the committee for the annual franchise development report, and on... Typically, what you'll find is across franchising, the average amount of time it takes...

Sales cycling. A-average amount of time it takes somebody to go from, "I filled out the form on your website," to, "I signed a franchise agreement," is right around a hundred and twenty... Four to, four to six months, a hundred and twenty, a hundred and eighty days, somewhere in that ballpark. We're now down around like seventy-eight days at Batteries Plus.

And it's because once we had the process down, we-- the process worked, and the process has been refined, then I can start looking at the different spinning pieces of it. If I speed this one up, what happens to this other piece that's down here? Does it slow down or does it speed up? And you can find those levers that you can dial up and down so that way your throughput's maximized, or optimized.

And, and that's really kinda how you have to sorta think about this stuff is, is that smooth is fast means proper planning, and it means procedures and processes and SOPs. It doesn't mean that they have to be perfect. It just means that they have to be thought out enough that you can execute, measure with the learnings, and refine or eliminate.

You know, i-i-if it's-- if it was a terrible idea, don't take forever to shut it down, right? But if it was a good idea and it was like, "Okay, that was, that was-- If we tweaked this one thing, it would be ten X better," do that and then do it again and then do it again. And, and over the course of time, you know, smooth really, really does become fast.

And fast is the difference between a hundred and eighty-day franchise agreement and a seventy-eight-day franchise agreement

First of all, I'm jealous. You, you have a team that does things on autopilot and you get to sit back. I mean, that's the dream, right?

No, nobody's sitting back here. Ain't nobody sitting back here.

Y- y- I mean, it's cool, right? And I think,

Yeah.

The things you said is that you get to step back and think big picture and think about more strategic things. And also, you have, you know, the trust in the people.

Mm-hmm.

Have a, a slightly different question. Maybe this will be the last one. As a CDO, right, you get a lot of feedback from the market, and this is something I believe, right? And you know, we just talked about bias of action, this idea of no amount of planning, you just need to get out there and you need to interact with the market and get the feedback from the market.

And for you, you're maybe the only organization that is getting this unbelievable feedback from prospective franchisees. And now that feedback might influence marketing, that feedback from prospective franchisees naturally, I imagine, impacts support and operations and the product, right? And I'm sure a lot of innovations come from that.

So how do you see the role of the development organization in teaching the rest of the organization, marketing, operations, etc., about what's working and what's not in the market?

That is probably the best question that I think I have been asked in a setting like this of all time.

I appreciate

And, and, and I'm not blowing smoke because I, I think the, the, the problem that people run into sometimes, that I would be addressing with the answer to this question S-- what I have seen over the years is it's, it's difficult unless you're CEO or president or even, depending on the scale, a founder of, it can be very difficult for those other leaders in the organization to see and understand the full life cycle of a franchisee and understand how all of the different moving parts of the organization impact that life cycle.

And so for, for our team specifically, where I started with that, was, hey, we've gotta build a culture that we're not thinking about signing franchisees, we're not thinking about opening stores, we're not thinking about increasing sales. The very first thing that we're thinking about here is what is this franchisee's exit strategy?

What's their timeline? What's their exit strategy, right? At some point in the life cycle of this person's existence, they're gonna leave us. It's gonna happen, right? Whether they pass it on to a kid, or they sell it to a store manager, or they retire, whatever. At some point, they're gonna go. So I need to be thinking about that now because that's the thing that materially impacts everything else.

So what are the things that exist between now and then, and how are they connected across the board that all pull to that eventuality, right? So how does the development program pull people into the eventuality of, you know, monetizing this person's investment or whatever. Or even in, in, in, in the other side of the coin, when they make dumb decisions in their business and the business goes under, right?

Or, or, you know, I've had franchisees that were running great businesses, but they had other things in their portfolio that went bad that killed their franchise. You know, that stuff happens. So, so what are you, what are you doing when you're thinking about your organizational planning and your strategic planning and so forth, where that's the number one key you're trying to solve for?

And, and, and that sort of, by default solves the question of everything else. Well, if marketing is, is... If, if marketing's job is to drive business at the end of the day, and we're trying to think about that in the context of, I want this person to buy a Batteries Plus today, and I want them to sell that Batteries Plus ten years from now for a boatload of money, if that's the timeline that they're on, what does marketing have to do?

Right? They have to, they have to provide opportunity for comp growth year over year. Okay? Well, that's, that's a lot clearer than we need to grow sales, or we need to grow revenue, and we need to grow market share. Like, no, you're-- you need to drive comp growth opportunity. The, the people in this... The transactional level people are the ones that are driving the sales.

That, that changes the equation a little bit in how they're thinking about what they're doing or, or how they're launching a new branded campaign or something like that. How does operations pull to that eventuality? Well, hey look, year one, you have this strategic plan where you sit down with the ops team and, and your, your franchise business coach goes, "What's your ten-year plan?"

"Well, I want this. I want that. I want to sell. I want to have ten stores by ten years," whatever it is. And they build, and they work on that r- plan, and they work on execution over time, right? With the eventuality of where's the... What's the end point. And you could see how that kind of like funnels into all the rest of the programming.

But also, if you're having that level of, of communication with your franchisees, which, which, you know, we're, we're good at, I wouldn't say that we're a great example of that, it also gives us, within the organization, a much clearer picture on how we plan resources and, and things of that nature. Because if I know that, you know, there's a wave of owners that are all gonna be selling their store in the next five years, well, I better beef up my, my exit strategy s- program for that period of time.

Maybe next couple of three years, I'm gonna budget for a little bit bigger spend on biz buy sell or something like that. It, it helps give you a bit of a crystal ball into the future for, for our planning purposes as a franchise system, but at the same time, helping the eventuality of those franchisees come to life while avoiding that bottom twenty percent attrition.

I've-- you're speaking, I've never actually heard somebody talk about franchisees. I never knew everyone says the franchisee is the customer, but this idea of I, as an organization, need to be queued into franchisee, like LTV, satisfaction

Right.

Right? And, and

That's exactly right

Like it's talking about the franchisee in that realm, which to your point is it's 'cause it's not a transactional one-time

Mm-hmm. Mm-mm.

It's almost like cons-cons, like consultation, right?

It's like, it's you need to have a deep appreciation of what they need, what they want, and

Yep

You retain and increase satisfaction across

Yep.

Number of

I, and I would, I would tell you that, I don't think there's anybody in a franchise organization better suited than the chief development officer or whatever version of that role that you have to understand that entire flywheel, right? Because they're-- they have to know it so well that they have to be able to sell it to somebody else in that sense.

And so for them to be able to see all the dots and how they connect over the course of that whole journey, they're probably better suited than anybody else in that organization. The problem is the development team, if they're not coached into that direction, a lot of times what you wind up having is develop- the development team thinks they're transactional.

"I'm supposed to sign deals, and I'm moving on to the next lead," right? And on s- on some level, you may need that depending on the scale of your... Where you're at in your organization. So for-- you need a, you need a hungry salesperson for sure. But for the longevity of a franchise system, you've gotta think beyond that.

You know, the operations team thinks transactionally. "I've gotta get your, line items per ticket increased. I've gotta get you on the appropriate store hours," or what- whatever the business is. They can be transactional. The marketing team, could probably have the toughest time of all in being transactional because they're almost, almost disassociated from the life of the franchisee, 'cause they're, you know, they're back here doing media buys and designing, you know, digital ads or, or bro-- these kinds of things.

They're not necessarily like... They don't necessarily have a firsthand experience of go work in a store for a day and just be that person. Understand what they're dealing with, and it may change your perspective on the mar-- or hearing directly from the, the end user customer, may change your perspective a little bit.

And that's not always practical or easy to, to, to demand that people do. But, but, but as, as a leader within the franchise organization or a founder of a franchise organization, it's your job to build the culture of thinking full life cycle. I hate, I hate to say cradle to grave, so we'll say, we'll say when we're talking about franchisees, we'll say sunrise to sunset, right?

We'll, we'll word it that way.

But

But i-it's critical to think that way

I- it makes sense, right? It's this idea of showing up to a prospect, and you know, we do this, rather than saying, it's like, "What do you want? Where do you wanna be?" And then looking behind you and looking at the tools you have and saying, "Here's all the tools that I have to help you get to the thing you want."

Rather than saying, you know, snake oil salesman or whatever kind of, you

Right

Whatever it is you have that's in the bag today, right? I, I get that.

Yeah. Like we just did a, We have two different conventions that we do. We have, we have the big national convention that we do. Call it Plus Con. We do that like every other year, every year and a half. And then we have an annual sales achievement event for our top performers. It's sort of like, it's like convention lite.

And we just did, sales achievement in April. And, I hosted a, a registration-only exit strategy seminar at that event, and I brought in, a guy from Merrill Lynch, from their, their, personal financial management program. I brought in a guy from, South State Bank. I brought in a multi-unit franchisee that we have in Phoenix who, at one point had, you know, a couple of hundred units across a bunch of different QSR brands.

I moderated. Yes, we, we had this, this group of people that if I was thinking about selling my business or getting out of it, you know, who would I want-- Who, what would my power team need to look like? I need a good financial person to tell me what to do with the money when I sell the business. I need a, an experienced franchisee I can lean on and ask questions.

I, you know, our director of exit strategy support's been doing it for forty years, within the world of franchising. He started all the way back with Money Mailer and knows, you know, Main Street business brokerage and franchise transfers like nobody else. And, you know, you have this, this A team of, of experience up there.

And, and, and we did that because a lot of times... And you-- And, and I don't-- I think every franchisee has this problem, whether they've uncovered it or not. When you ask a franchisee

As well and so

At any stage of their life cycle, "You wanna sell your business, what does that look like?" Well, in most cases... Here's a-- Here comes another, another metaphor.

In most cases, think about it like this. You wanna sell your house, so the first thing you do is you walk across the street to your neighbor and go, "I wanna sell my house. Do you wanna buy it?" They say, "No." So you check the neighbor on either side of you. They say, "No." So the next thing you do is you pick up the phone and you call the mortgage company or the bank, and you go, "Do you wanna buy my house?"

And they say, "No." So you pull a U-Haul up in the driveway, empty all of your stuff into the U-Haul, and abandon the house. Most franchisees, "Well, I'm just gonna shut it down. The, my franchise agreement or my lease is up," or whatever it is, "And I, I'm ready to re- be retired. I'm just gonna shut it down." That's their level of understanding of how to sell their business

Here.

99% of the time.

In Main Street franchising, that's what you're looking at. And so we work really hard to educate franchisees on exit strategy. Like, you are building an asset, you know, and w- and we get on them too. Like, like Hugh, who's my exit strategy director, you know, his favorite thing to ding people on is stop calling it a store.

You don't wanna sell your store. You don't wanna sell your store. You don't work in your store. You don't own a store. You own a business. That's a different thing. That's a different psychology. And, so, you know, making sure that we're educating them and changing that, that train of thought, you know, not only helps us be able to coach them better in the everyday operations of their business.

"Hey, remember that, you know, you wanna sell your business for a million dollars, right? So that's gonna require your business to perform at this level, and you're doing eight out of nine things, e- eight out of 10 things right. These two things over here, I love you, but you really suck at them." And being able to have that, that coaching type of conversation with them...

And, you know, I use just another sports analogy. Championship teams get screamed at by their coaches. Not that we're screaming at franchisees, but championship teams get screamed at by their coaches. Why? Because he knows they're capable of a championship, and they're gonna get that performance out of them.

And the end result is, do you think they're ever pissed about winning a championship? "Well, I wish you hadn't have screamed at me so much." Hell no. They're too busy drinking champagne out of the Stanley Cup, right? And, you know, their, their hands are weighed down, and they're... From all these rings, and they're tired, so they don't have the energy to scream anymore, right?

Franchisees would love that scenario. "Oh, you mean I sold my business for a million two, and I was shooting for a million, and you, and you screamed at me along the way and gave me tough love along the way to get there? Yeah, okay. I'm alright with that." Right? Nobody, nobody ever is mad when it happens th-that way.

But you have to be able to have those relationships, those conversations. But as a franchisor, you have to have the foresight to understand. And this is the... This goes all the way back to the beginning of that scaling conversation. What are you really scaling for? You're scaling to support the exit strategy of franchisees.

At the end of the day, if you do that, that's the nothing happens till something gets sold idea in franchising. You are growing a system that is designed to get franchisees' investments monetized and monetized well.

Well, Joe, I know I'm already like 10 minutes over past however long I said I would be. Joe, this was awesome. This is one of the most interesting conversations I've had, on the podcast. I'm gonna wrap it up. I'm gonna say if anyone has any other questions, what's the best way to get in touch with you?

LinkedIn is super easy and, and I, I am fearful when I say this, but partially because it's embarrassing and partially because it's embarrassing. But I'm the only Joe Malmuth on the planet. I have Googled that for sure. So if you just Google me, whatever you see, it's me, and I'm not... You know, whatever you see is, it is me.

It's out there.

With the

So yeah, well, I mean, it wasn't that long, you know, it wasn't, wasn't, hair band level, but, but you get the idea. You know, there's, there's, you know, goofy stuff out there. Thank-thankfully, I, you know, I didn't grow up necessarily in the social media generation, and most of my space has disappeared from the world.

So, you know, with that said, you know, LinkedIn's super easy to find me, but literally anywhere you type in Joe Malmuth, if it comes up, it's me

Amazing. Joe, thanks so much. I really appreciate the time

Yeah, this has been fun, man. I appreciate it