When Financials Build Trust: Brad Adams on how shared visibility builds franchise relationships

Hey everybody. Welcome to today's webinar with Brad Adams. For those who don't know, Brad, Brad is the president and the CEO and the chairman of Qvinci, and which is a company that's entirely focused on bringing financial visibility and clarity to both franchises and multiunit systems in large. Also super interesting.

Brad has this unbelievable history as a lawyer and has more than 25 years leading legal teams, boards, management teams, all of that. So it's gonna be a great chat with Brad. Today we're gonna be talking about financial transparency in the franchise space and why it's so important in the franchise relationship.

So Brad, super excited to have you here. Thanks for coming on the webinar.

Well thank you Gary. I appreciate it and thank you for that nice introduction. It's been a journey over at Qvinci, and I've, you know, I've enjoyed it. I'm a, I'm a, I'm a, I'm a serial builder, so to me the fun is, is figuring this stuff out. And, Qvinci is, is gone a long way and, and, and, and, and trying to help, like you said, franchises and multi-unit organizations figure out a how to way to win together.

Yeah. I love that. So before we get into the financial pieces, would love to just ask you to give maybe a five 10 sentence introduction to your experience, the legal background quickly, and how you made your way into the current business and, and at the helm of it.

Well, surely, you know, I, I, I went, I graduated law school at Georgetown and, became a, I was in tax law and I got back to New Orleans and, didn't really gel well with tax law became. A, a, a, a litigator and did trial work, a lot of jury trials, and did that for about eight years. And then, into the oil field, my pa my father's company, and took over that, with my brothers. We sold that in 2009. Then I, I was under a non-compete and I was looking for something to do. I met Charles Nagel, our founder. I'm going, wow, there's a lot of blue ocean here. There's a, you know, these franchisees, multi organization, they're not doing anything together. They're just, they're just floating out there separately, you know?

And, and this is a great, opportunity. And Charles invented and we patented the collection, consolidation mapping of the data, which is the foundation of everything we're gonna talk about today. And so I came on Qvinci and, Charles, did the tech and I did the, the, the business.

And, and, and, and here we are today. I know it's kind of a. Weird path, but, you know, a, a a sound business policy and good conservative government governance, in a business applies to, the legal world. It applies to the oil field, and it applies to, to, to a SaaS B2B.

Yeah, absolutely.

It's been a learning process to me. I, I, I, you know, I, I give you that, but, been a lot of fun and we're, we're, we're just now really starting to hit our stride, at Qvinci and, built a great team, of, of, of people sales, customer success, marketing tech. We're making, we're making really big inroads in the AI area. With our partnership with you guys and trying to, trying to figure out a way to answer people's problems quickly and directly. So that's, you know, that's kind of my path. I know it's a weird path, but it's, it's been, it's been a lot of fun and I'm enjoying the hell out of it.

Super interesting. I mean the, the, all the legal transitions and the pivots. I love it. I think it's fascinating and. I know a few folks that are lawyers turn business and they're always fantastic business people, so kudos. I think it's a well, a well suited background. So before we get into kind of the solutioning and all the AI and everything, that's super exciting.

I'd love to just understand the problem itself, right? And it's something that you sit really close to, but this idea of financial response, transparency, why is that so difficult for a franchise systems? Historically, I.

Let's take franchises and this, this applies to all multi entity organizations, which are really a, a group of, of small to medium businesses. Okay. And historically you have the parent. The And then you have these independent business owners, the franchisees, okay. Who are doing their thing, their plumbers, HVAC, dog walking services, tugboat services, you name it.

And they're, you know, they're out there, you know, managing their business well. There's this whole aspect of the financial aspect of a business that you really need to focus on. And, you know, there's been this, when I first got to Qvinci, of the franchise stores said, Brett, how are you ever gonna get franchisees to do this? Okay. And it's that big brother, you know, the a kind of syndrome. And I said, we gonna, we gonna solve this challenge because we gonna make the, the tools. Desired by both the franchisor and the franchisee. It's gonna be a shared asset, not a regulation or something in an FDD. It's gonna be, we wanna do this because we both get something out of it. You know, we both can use benchmarking, ranking, cash flow, all those things like that, that we share this thing, share these, this data, so we can all win together. So the first thing you gotta do is you have to, you have to get, we call either a, a, a mapped or normalized data. And I'll explain that.

You can't just take the data from a thousand different. Accounting systems, everyone name things differently. They do things differently. You have to map, map everything, both financial and non-financial data to a standard chart of accounts or some standard, so we can have apples to apples comparisons.

'cause if you don't, you're gonna have garbage in garbage. Okay. And that, that, that's, that, that was the, that was one of the initial problems people had is, you know how I'm gonna get good data? Well, you don't have to worry about policing every franchisee because Qvinci's A-A-A-A-A solution does that for you. And once we map that data to a standard chart of accounts, then you don't have to do it again. It happens every night. When your data is synced. So you have that good foundational data, you gotta, you gotta make, you know, reports and business intelligence that are both good for the franchisee and the franchisor. And we, we call this the push pull paradigm. Okay? We wanna create. Business intelligence that's easy to use. That pulls the franchisee into the relationship with the franchise business coach. And we wanna create business intelligence that pushes the, the franchise business coach to reach out to the, to the franchisee and say, Hey, let's meet and talk. And so we started with this idea that franchisees are not. Finance guys. Okay? They're not McKenzie. They're not from McKenzie. Okay? So, you know what? They do understand green is good. Red, we gotta talk. So you make all of your business intelligence follow that general paradigm that if it's green, you're doing great.

If it's black, don't worry about it. But if it's red, fine, red fix, red. Okay. And this is the first part of our journey toward, toward of machine learning or artificial intelligence. And, and, and, and our partnership with you, with you guys are, are going to bring that to the next level. So when you have this simple. Scorecard or any, any one of our business intelligence that let's say you're, you're, you're, you're A-A-A-A-A-H-V-A-C guy, okay? You got three franchises. You know, you look at that KPI scorecard and you got five red areas. I schedule a Zoom call with you. You're my franchise business coach. Hey Gary. I got five red areas.

Let's, let's find those, let's, and, and fix those. You can click straight through all the way through from the KPI score to the general ledger and find out where that came from. Find it, fix it. Let, let's say for example, your cost of good soul is up 20% over last month. Well, let's fix that. Let's not worry about consulting, which is fine.

Let's not worry about other things that, that you're doing fine on relative to your peers. Let's focus on those areas that, that we can fix, and then you as a franchise business coach representing the franchisor you schedule is okay. Brad, we're gotta work on these five areas. Let's set a call next month on 45 days or, or what have you, and let's see how we can work on that together. Know, and you can set, you know, get it together, put on a Zoom call, share your screen. Look at the, oh, well, you know, what? Last month, you, your cost of good soul was red. Down 20% this month. You're back, even with your peers, you've solved the problem. Let's go to the next. So it's all about building that shared assets and data is a shared, should be viewed as a shared asset, not a rule, not a requirement.

Not Big Brother overreaching. And I, I, you know, that's been our goal at Qvinci is to really drive that home. And, and, and, and we, you know, we've taken one of the most old line franchises. You know, service Master. Okay. They, they, we had a big problem with that. And now they're all on Qvinci their franchisees understand.

We had another franchisee that wanted to quit Qvinci last summer, and their franchisees revolted and said, Hey, if you don't do it, can a bunch of the franchisees get together and we buy it? So we got everybody together and they stayed on Qvinci you know,

Let me,

Okay.

No, no. Let me, let me ask you something, right, and I, I've been holding this question for a second here, but. Help me understand the paradigm between, you know, value and trust. Right. And I, I don't, I don't think they go one in the same, in the sense that. You know, you, you said that the thing that's foundational to the way that you have built Qvinci is that there's value for the franchisor and value for the franchisee, but also in my experience, there's this hesitancy on the franchisee to share data, even if it's gonna help them.

Right. They know it's gonna help them. But that big brother aspect, that thing that maybe there's just a little bit of distrust, right? That still is harbored or is there where they. Even though there's value, they might hold the data. How do you guys think about that? How do you build consensus or is that not an issue?

And I'm just making things up, which may be, I'm just curious on that, that distrust piece, and I'm dissecting that a little bit more.

No, you're not. I, I, I think it's becoming less prevalent today because the more value you give someone, the more they're gonna trust you. Less value you give them and the more rules you give them and the less trust it is. As I said earlier, when I first got to Qvinci, it's, you know, how do you get franchisees to do that?

We don't hear that much anymore. We still do, but we don't hear it. One of the things we do at Qvinci we have a playbook to onboarding and onboarding the customer is the most critical part. We don't just like link and sync your files and say, Hey Gary, press here. Click here. You're in Qvinci. Good luck. Okay. We get the stakeholders, maybe a franchisee advisory committee. You, you, you, you get your early adopters, the, the, the influencers in the franchise community and you get the franchise on. We have separate meetings. We have separate meetings with the finance team, the operations team, the franchise business coach team, which I know you do a lot of work in and, and, and, and try to get some franchisees as well and, and, and, and onboard them teach them and try to find out what are their pain. You know, the old saying is you never, you never sell features, you sell solutions and you to people's problems. So our, we're not, we onboard people. We, we onboard them to coach them the value of Qvinci. And, and, and we also coach 'em that, you know, we're not changing your underlying accounting solution. You continue to run the business any way you want. All we're doing is collecting the financial and non-financial data in the cloud, manipulating it so everyone can use it. Okay. And, and, and when you explain to people like, we're not going into your QuickBooks files and making changes, don't have authority to do that. We're just grabbing the data. And so we could make that, that the business intelligence, you know, and, and, and you know, one of the things that we're doing today is, is, like I said, we, we're really trying to educate the franchisee that this is really, shouldn't be about trust. Quite frankly, if you've got a trust issue, you may not be in the right franchise.

You really should, if you're going to be in a figure out, you know, the trust part early on. And we've been very successful in, in, in doing that. And, and you know, frankly, I think that it's becoming less and less of an issue. You know, we're onboarding a a, of one of the oldest, in, in America right now. This is an old line we're going through this problem right now and, you know, would convince the, the, the, the champion to move forward was our onboarding process. You know, most people, most companies, Gary, or outsourcing their customer success to a foreign country and doing chatbots, co Qvinci is investing millions. Customer success professionals that know how to talk numbers that onboard you and, and guide you through the process. Everybody has a customer success agent and an account manager, and we're, we're, we're going the opposite way. It's very expensive. But to me, you know, I view co Qvinci as a service business as much as a software business.

So let's a hundred percent. I get that. Right. And I think there's a great peeping of that. You know, good deployment of good software also teaches people how to, those teams, those franchise teams, how to use it best. Right. And I keep coming back to what you said around the. Red, green, black, right? Kind of how you're guiding the account, the conversation between the franchisor, likely the coach and the franchisee.

What does a healthy version of that accountability look like? Be, you know, Cuban chief's informing a conversation, but then once the franchisor is talking to the franchisees, you're facilitating these conversations. How should a franchisor be using that in a conversation in a way that creates accountability, not necessarily compliance or something that's a slap on the wrist, but something more collaborative.

Well, you know, it, it, it, it, it, it, it's, it's go, it's in line with that push pull paradigm we talked about earlier. It's, it's providing. A, a piece of business intelligence to the franchisee. Just send it to him. You know, right now we're working, it's almost finished. We're working on a way that, know, you don't have to wait for someone to come on Qvinci and, and, and build a KPI scorecard or cashflow report or whatever.

All right? You can set emails to your, to your, to your franchisees and send them the documents, And what will build trust, we believe. Is the franchisee not have to go in there and not have to build a report or, or load it or hydrated. He just gets it. He looks at it and says, wow, this's great data. Why that?

Why am I, 20% below my peers? Why is the guy from Poughkeepsie, New York, know, making more money than me? Okay, well, you know. Let me, let me, let me contact my franchise business coach and say, you know, you contact him, you know that, you know, Hey, I, I just saw this KPI scorecard and you know, I'm way behind. Can you help me figure that out? Okay. And I, I think it takes time. You gotta build that relationship and then you, you have some wins. And then the franchisee, he goes to the franchisee conference, he tells a few of his other franchisees, you know, I've had a great relationship with Gary at, at, at my franchise business Code man.

He helped me figure out, you know, the, the, the, the five things that were really affecting my bottom line. And now I'm, I, I'm beating my peers. Or meeting, meeting my peers or being slightly beating them. And it, other franchisees said, well, you know, maybe I oughta give this a shot. Maybe this, maybe this is not Big brother. Overreaching, maybe This really is, together. A, a scenario. So it doesn't happen overnight, Gary. It, it takes time. But the real thing is, is, is, is, is, you know, and what, what Qvinci was founded on, making clarity outta complexity, taking thousands of QuickBooks files or accounting files or you know, NetSuite or whatever. Make that data into some business intelligence that, that anybo, you know, financial, our, that's our tagline, financial insights, anyone can understand. And that's the whole point. Because we don't represent, finance guys, we represent groups of small business owners who know how to provide the goods and services they provide and need a lot of help. On the finance side. So if we make it so simple that you can, you know, find red, fix red, I, I, I think I, I think it takes, you know, one of the things that some of the franchisors do and, and we, we go to these a lot, is when you have a conference, maybe have a conference with a bunch of franchisees. Qvinci will send someone over there to give, to give a talk. Go over all these tools and, you know, meet the franchisees, put a face with, you know, with a face, a human face. With a human face and, and, and, and really, you know, try to, you know, convince them that, hey, this is, this is not Big brother. This is, this is a service your franchisors provide to you to help you get better. It's like the three pillars, and I know Joe has probably talked to you about, we did a survey of about 600 brands last year, year and a half ago. The three pillars of financial franchise, financial management, pillar one, the data, foundational pillar, you gotta have it, we call it co Qvinci data it's, it's data that's collected. Consolidate it and map to a standard chart of accounts so you can use it. Pillar two, coaching for performance pillar three, brand compliance and expansion. Think about it. Get the data. Your franchisees perform better. Everyone in con in, in, in, in compliance with your rules and sell more franchises. What could be simpler than that? That's the goal of every franchise, and that's every tool that Qvinci's building right now has to fit within those pillars. We, we just had our roadmap meeting yesterday when I was in Austin, and, and every time someone said, I want to build this, I said, tell me the pillar it solves. Or, or, or, or betters. And, everyone's got it. Now, they're not gonna show up in a meeting without that answer because if it, if it's not gonna solve those pillars, it's gonna go in the secondary pile. We have to solve those pillars. 'cause that's what franchise franchisors wants. And, and, and, you know, you know, your group and, and, and, and AI come in and, and, and, and, and make you guys make. The, the, the, the, the, the, the answers simpler to get, like, I'll give you an example. Today we have what's called level three reporting Interrogate. We have level one, level two, level three. Inquire, interact, interrogate, interrogate allows you to open up any business intelligence tool, business intelligence tool, and click a button and, and, and drill down. Let's say for example, your cost of good soul is down 20%. You click the button, it's gonna open up where the where to go find the answer to that problem. Okay? And it's only gonna be a few places, you know, it could be your top 10 expenses, could be p and l. And then from that you can drill all the way to the general ledger. You know, the next phase of this is, is gonna be why is your cost of good sold down 20%? And the answer's gonna be because you spent too much money on consulting and Federal Express charges. And then you click the button and go and, and, and go show it. So, you know, that's, that's the, you know, the, the, the evolution of this is, is we're still going after the same problems.

We're just gonna get very, very targeted on providing the answers quicker. And, so I, I think you build that trust by winning and, and.

That.

We, we start with the early adopters, you know, the, the, the, the tech focused, and, and, and, and, and, you know, they, they talk to their people and I tell you what, we, we, we, you know, we, we still have problems with some franchisees, you know, getting their people on board more, but the newer franchises, you know, the ones that, that start with. Making co Qvinci in a, in a particular accounting solution, mandated, especially the younger, group, they understand that the shared data concept, the older franchisees are more guarded. But I tell you what, we just, we just we're on board the franchisees that was started like 1947.

Wow.

Okay.

Maybe 57. May it, it, it was, it was, it's a, it's a 70-year-old franchise, so you cannot think of a more old school franchise. And, We're having surprisingly good, feedback from the franchisees, I think it's all due to our new or relatively new onboarding process where we get all the stakeholders in and have multiple training sessions, to get them used, used to what it is.

And our library is so easy to access now, you know, and all of our reports. You can use them as is, or customizable also, but they're in your library and they hydrate automatically every night. So you just go and

Right.

So it, you know, I know AI is a big thing and, and, and, and it is, and it, it's gonna revolutionize things.

But, you know, personal relationships are always gonna matter. You know, always gonna matter because you know, you gotta have somebody to execute.

Absolutely.

You can give us the answer on where the problem is. You gotta have some that's gonna execute and fix that problem. I don't know if AI could do that yet. So, welcome ai. We we're, we're, you

I.

We're, we're, we're, we're a hundred percent behind it, but we're going to do it, in a very safe environment.

You know, one of the things I think, you know, is, is, is my, my, one of my fears about AI, and, and, and you know this well, is how do we maintain security? Of this very private data by using ai. I mean, if I took all my financials and put it on chat, GPT, where does that data go? Who? Who has it? So, you know, maintaining a secured environment where you could have inflows of data, financial, non-financial, but ain't leaving and it's

Yeah.

The parallel, you know,

So

Is important.

Yeah, I, I, I couldn't not agree that, you know, governance on AI and governance on more data security in general, even if it is AI or not, I, I think is absolutely important, which is why you see all these companies being required to be SOC two and, and. All of those. I did wanna double click on one thing you said, and maybe this will be the last question we, we asked you here.

It was about that roadmap, right? I, my ears perked up. How do you see financials becoming ever more present in the franchisor or franchisee conversation, or, you know, how do you see maybe broadly financial transparency changing or evolving in the next few years?

You know, It all surrounds our three pillars. Okay. You know, how do we get more data? And when I say more data, you know, you know, financial data is easy to get because we can all connect to an accounting system. But you know, as I, I think Joe has probably explained to you, we're in a big push to get non-fire data. Qvinci's goal is to become accounting solution and data agnostic. So, you know, getting more data in mapped properly so we can, we can use it in business intelligence, I think is, is, is, is a, is a, a, a, a good first step of becoming a, a, a, a better, I'll give you an example. Let's say you have a taco restaurant and you wanna know. How much revenue your, your taco stand brings in. That's fine. Well, I wanna know how much, how much revenue I bring in for flower tacos on, on weeknights. Five and seven. Okay. Or, you know, I want, it's really, I think the next step is gonna just be getting more and more granular on the data you bring in not just p and l, not just cost of good sold, but each and every item of that cost of good sold, breaking down, and, and, and what, what, what, where I do, that's where I think that's where we are focusing on, is getting more and more granular with the data in those three pillars. That we

Yeah,

A minute ago, the data coaching and compliance and expansion. And that's how I see the future going. Getting more granular on data and getting quicker with the answer.

Absolutely. Yeah, I, I love that, right? The idea that rather than starting at the p and l, which is a, an unbelievable place to start, but bringing that same level of analytical, financial thinking down into segments, and then maybe even into the granular, it sounds like even almost transaction level or maybe time-based, whatever it is.

I love that. Cool. Brad, this was awesome. I love this. I mean, you live and breathe the world of financials and now and technology in the, the mix of the two. Always our final question for our folks, if they have more questions about, you know, financials or qvinci, what's the best way to get in touch with you or your team?

Well, you know, the best way to get in touch with, with with me is send me an email. Brad a@covinci.com I'll be happy to get on a phone call with

I.

Direct you to the, to the, to the, party. You can check out our website@www.co vinci.com. We have a great website. We have a whole website specifically for franchises, franchise being one of our verticals. And, would love to love to show you. What we can do for you and, as I told a, a guy the, yesterday on a, on a call, give me a chance. I won't let you down.

Yeah, if I can vouch for it. For those who don't know, Qvinci is a great product. Great team. We've enjoyed working with you and your team, for throughout the entire partnership. So Brad, thank you so much for the time. Awesome as always. And we'll have folks reach out at, your email. Thanks so much.

Thank you, Gary. Have a great weekend.

Yep.