How to Effectively Onboard Franchisees with Scott Hoots – Episode #24
Evan speaks with Scott Hoots, president of Pet Wants, a high quality pet food retailer, about steps franchisors can take to ensure franchisees are set up for success through onboarding initiatives. Pet Wants has 100 franchise units across the United States and offers free delivery to your home or office. Scott has 25 years of experience with franchise operations and sales, and recently completed a four year leadership course at American Family Care. Learn more about Pet Wants here, and connect with Scott on LinkedIn.
Announcer: Welcome to Training Unleashed, the show that will help you design and deliver training that’s off the chain and will make a difference. Now, here’s your host, Evan Hackel.
Evan: Welcome to another edition of Training Unleashed. I am your host, Evan Hackel. With me is an old friend, Scott Hoots. He is the president of Pet Wants. They are an unusual and unique, and as far as I know, the only people that do what they do. But, of course, I’m gonna let Scott tell you that part. Scott is a true seasoned franchise person, a real expert in the area of training. And, of course, everyone knows if you’re in franchising, you’re in training because that is what the key component that people need to be successful. Scott, if you would, please tell everyone a little bit about yourself and your new venture, Pet Wants, new for you, not new for the company, Scott.
Scott: Yeah, thanks, Evan. Thanks for having me. Hello, everybody. Scott Hoots here, president of Pet Wants Franchise System, LLC. Pet Wants is, as Evan said, a very unique part of the pet food industry. We’re a completely franchise operation with 100 franchise units across the United States. And we focus on selling a fresh, natural pet food product for dogs and cats that is made with no by-products, no corn, no wheat, no soy, no sugar, no artificial ingredients. And that’s the freshest that you can get from manufacturer to your pet bowl. And our other point of differentiation across the industry is, is that we bring it right to your door at home or at your office or at your doggy daycare.
Evan: Wow, that’s kind of cool. You know, that food sounds so good like you’d wanna eat it yourself. I don’t think I eat that healthily.
Scott: We also have some other treats, Evan, which you might like if you’re a beef jerky fan at all. We make a great homemade beef jerky that even humans talk very highly about.
Evan: Wow, it’s kind of cool. You could sit down and have a snack with your pet literally. Anyhow, you know, from your perspective, where is kind of an example that you could share with us where training has made an impact on your business?
Scott: Well, I think here recently, and as you know, I’ve been on board for four months now, and one of the first thing I saw when I came on board was our onboarding of new franchisees needed to be strengthened. We have a great team here at Pet Wants. Our operations team combined has over 75 years of experience in the pet food industry. And the flip side of that is though is that they didn’t have any franchise experience. So I’ve worked with them throughout the onboarding process to make sure that our training is specifically focused on training franchisees, which as you know, it’s a lot different than training in school or training managers or something of that like. You’re training independent business owners. And we worked hard on strengthening that onboarding process, which actually starts before training and then rolls right into the week-long training process for new franchisees, which incidentally we are doing this week right in the office right next to mine.
Evan: So, if you don’t mind, I’d like to have you go into more detail here because a lot of people that are listening are not in franchising. And I think one of the things that franchising does really well is the onboarding. And a lot of times, a lot of companies, you bring in new employees and the kind of thrown, you know, watch Phil, watch Sarah and, you know, trial and error. You know, I almost think that companies ought to take the same principles that they take in franchising. So, if you could talk a little bit about what the pre-training looks like, what types of things they do pre-training, what types of things you train live, and then what kind of training you do actually after they open. And I think that would be, you know, really insightful for people.
Scott: For sure. As I mentioned, it starts even before they come here to Cincinnati and do the actual training. It starts with a series of calls with a franchise business coach, and that franchise’s business coaches, his name is Jim Curran. So first and foremost, I have the same person doing the onboarding whenever possible. That gives us some consistency from person to person. You’re, as an expert in training of, and you know that when you introduce inconsistencies in the way that you’re training, that’s a recipe for disaster when it comes to training.
So, Jim’s really good at what he does. He’s a longtime veteran of the industry. And Jim’s the one that does this onboarding process with everyone. So, Jim’s gonna start by outlining the needs of the business. So before we even get into the actual business of pet food retailing, we’re gonna talk about the outline of the needs of operating any business, and that includes setting up a bookkeeping system, understanding how to file for your corporate documents, all of that stuff that a business owner has to do before they could even worry about how to receive an order or the operations of customer satisfaction. They need to be able to set up their business from the get-go. And that’s a big focus of the first part of the onboarding program. Then once all of that is established… And by the way, we introduce the trainee, the new franchisee to some other vendors, including their bookkeeping service and their website vendors during this process. I mentioned website because that’s the next step is, is we’re helping them set up their website.
And one of the things that Jim does a pretty good job of is, is he focuses on keeping the new franchisee completely engaged in this process. So, it’s not like we’re doing stuff for them. We are helping them establish the business themselves. So from the very get-go, we’re trying to establish good habits and a good understanding that the new franchisee, so they know that they’re the ones…that their success is predicated on their efforts, but we’re there behind them to help show them how [crosstalk 00:07:28] effort.
Evan: So you’re teaching them how to fish?
Scott: We’re teaching them how to fish, not catching the fish and putting them in their bucket for them.
Evan: Yeah, that’s terrific. So the pre-training is done. Now they show up. How many days is it, and how do you divide it up and make it work?
Scott: So that’s actually, typically, two to three weeks, it depends on the schedule because some of our new franchisees that are coming in, they have full-time jobs that they’re still working before they launch their business. So in that case, it might take a little bit longer because we have to work around a work schedule. But typically that onboarding process, so we call it onboarding, that onboarding process is gonna take two to a maximum of three weeks. And then they come to Cincinnati for a week to do the actual week-long training here.
Evan: So, can you tell us a little bit about how you set it, how you organize, how you prove that they have knowledge?
Scott: Homework. Actually, you know, that’s the funny thing. It’s always funny to be in the training class when we get started and we go over the agenda and folks learn that they’re gonna be expected to do homework each night. You should see the look on people’s faces, “Homework? What do you mean we’re gonna have to do homework every night?” You know, we have an established program. Like I said, it starts early Monday, ends at the end of the day on Friday. So it’s 5 full days, starting at 8:30 every morning, ending at 5:00, and again, as I mentioned, with homework. And that class will run the gamut of pet food nutrition, it will run into marketing topics, how to effectively market your business, operational things like how to answer the telephone sales. We have a heavy, heavy sales component, Evan, in our business. A lot of our customer interaction is done at farmers’ markets, flea markets, local events where there’s one-on-one interaction between the franchise owner and a potential customer. So they have to be coached and trained how to do that. Not everybody comes to us with that born skillset of being a salesperson. So we dedicate an entire day with, yes, the bane of every trainee’s existence, the dreaded role play. We have an entire day set just for sales training.
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Evan: Role-playing is a very important attribute, and I totally concur with you that there is resistance and fear because people don’t like the… Now, there’s some people that love it, you know, people that probably should be actors, I guess. But just any tips on how you get people comfortable with role-playing?
Scott: I think what we’ve tried to do is we try to establish a strong rapport. So they don’t come in on Monday and we launch into role play come Monday afternoon or anything like that. We build a relationship with them. Now, we’ve already had a relationship with them. As they’ve signed a franchise agreement, they’ve come to our discovery day, which we call affectionately meet the pact day. So we’ve developed a relationship. But what we try to do in the first part of the training week is to establish a rapport, a relationship and ease communication style, so we’re not hitting them with that role play. So I think that’s the biggest thing for us, it’s just establishing that ease in their mind so that they’re not too whacked out about having to do it.
Evan: Well, I think it’s good. I think it’s smart. You’re not doing it first thing and that you’re giving people time. You know, when you know the people you’re around, it’s much easier than if you’re doing it in front of strangers. I think that makes a huge difference.
Scott: Yeah, it does in our classes as well. And the other thing, we don’t generally videotape it. I know, you know, sometimes people videotape role play for playback purposes and coaching purposes. And I understand why they do that and why that’s a beneficial tool. We don’t do it. We may do it down the road, but we currently don’t videotape. And I think that helps people stay a little bit more at ease.
Evan: Yeah, that makes sense. So talk about…so now they’re starting up their business, what happens afterwards? So they’ve completed the, you know, the pre-work, they come in, they’ve spent the week. How do you continue the onboarding to the point you get them to where there are “regular order” and things are working normally?
Scott: Yeah, I wish there was a regular order and things were different. There’s witness at Panacea [inaudible 00:13:16] he’s been doing this as long as I have. We keep working at…
Evan: You know, I talk a lot about, you know, seeking excellence is a never ending journey. You know, you’re right. You know, because whenever you get to wherever you’re going, there’s always something new you’re now gotta get to.
Scott: That’s for sure, but it just reinforces the effectiveness. If you have effective training, you can get to that journey a little bit easier and less stressful. You know, this is where the magic of franchising happens. You know, you mentioned that I’ve been in franchising for a while, and you’re right. I try to avoid saying how many years because it makes me feel older than I wanna feel. But this is where the magic of franchising comes in. The new franchisee comes, and they’ve been drinking from a fire hose all week long with all of these different topics that they had never really considered before they signed on with us. They get in and, you know, the natural thing is, is to forget some of it, to be nervous about launching the business. So I’m in my marketplace and I’m all alone, but you know what, then the franchise business coach calls. And by the way, that’s Jim Curran, who’s already been established himself as a familiar face to this person. He’s calling them each week from the very get-go when they get into their marketplace. And that familiar face, that familiar voice and that support can really help get a franchisee established and launched on along the right path to success.
So, Jim’s gonna start calling as soon as they get back home from training. They’re gonna start recovering some of the stuff, asking him questions, coaching them through the things that they’ve learned so that they can move from learning to applying those things in their marketplace. You know, questions like how many events have you set up yet. Oh, how did your event last Sunday go? So you remember that thing that you struggled with during the role play, did you run into that situation? And if so, how did you handle it? Can I help you through any problems? You know, they get into their marketplace, but they’re not alone. They have a coach and a support system behind them that’s gonna help reinforce that training from week to week.
Once they get through their first three to four months or so, they’re gonna be transitioned off of Jim to one of our other franchise business coaches. And that person is there, and their accountability is to help that franchisee be successful, whether it’s effective marketing, whether it’s operation, solving customer service problems. You name it. That’s what we help support them.
Evan: I’m gonna take a second here, Scott, and highlight what you’re saying to the listeners because I think this is very critical. It’s something that is very common in franchising, although not done by that many, and I compliment Scott for doing it, is he is creating a special team of people to work with the franchisees when they start up, as opposed to immediately transitioning them to the person that they’re gonna work with on a regular basis. And the fact that, you know, he’s using the same person that did the pre-work, the person that was involved, not probably in every aspect, but a lot of the aspects of the actual training and then a familiar face, somebody they’re comfortable with so they can pick up the phone and call him and know that he knows them and knows their business. I love the example of relating something that happened in training and asking about that later, that shows the trainee how much you care. So what I’d like to do now just for a second here is relate what you’re saying to a non-franchise business, is do you have a set procedure to train people? Do you have to find timelines? You know, do you dedicate literally time to have them work on what they’re doing for a week or two weeks, you know, to be proficient before you actually have them do the job? And what I find is that most companies don’t do that. And what happens is that you have lots of very costly mistakes. You lose opportunities because you’re turnover is higher. So you have a bigger retention and you lose opportunities because they’re not good at what they do at their job. So there’s this rush to get people in there.
I know for myself in business when I was running…this goes back many years. You wouldn’t talk about all of that. I won’t talk about how many years ago this goes. We used to hire salespeople. And literally, what we did is we would hire people that were experienced salespeople because we didn’t wanna dedicate ourselves to training. We’d have them start immediately, and then when they weren’t busy with customers, we trained them here, there and everywhere, you know, to get them up to speed. And that was ineffective. And, in fact, we found that a lot of these trained salespeople were very bad and they were trained very poorly. And then we moved to something very similar to what you’re talking about where we put every new hire through a two-week training program, first week totally, and then we had them do some real work with customers and then come back and role-playing, and the results of the production, and how fast they got up to speed, how much they were selling, close rate, average tickets, all of them went up immeasurably. So what you’re doing in the franchise world, which is expected, is not something that’s done in the real world. I guess franchise world is real. Right, Scott, franchising is real?
Scott: It’s definitely real.
Evan: Yeah, it’s definitely real. In fact, it’s one of the largest segments of the entire economy. But those best practices really make a difference and can make a big difference in your world. So I challenge everyone to think about what you do when you’re on board. You know, maybe it makes sense with your training departments to have staff that are focused on that part of the process and do more coaching at the beginning just like Scott does, so then transition them into the normal procedure after they’re fully on board. And if you can improve retention… I’m sure for you, Scott… I mean because you’ve been in the business a long time, you know, what’s the difference between a franchisee that’s rushed and a franchisee that goes through the process in terms of likelihood of success and how fast their business gets up to speed in business? Maybe you could elaborate a little bit on that.
Scott: Oh, it’s one of the critical factors because as the franchisor, our revenue stream comes from percentage of the franchisees’ sales, right? And if you’re giving them a stronger ability to launch and get up to target sales faster, that’s just the quicker we get to our target sales from that franchisees’ royalties as well. The other part of that is, is that that first 12 months in a new franchise business is critical. That’s the time period when you may be operating at profits…excuse me, at a loss still, or you’re at break-even at best. So you have to get up to speed pretty quickly or your chances of running out of money are much greater.
Evan: Yeah, and the worst thing for a franchise system is to have people close because then it’s really hard to get more people to buy in. So failure really isn’t an option in franchising. And I think it’s that attitude that forces franchise businesses to really focus on onboarding getting people up. And I do commend you because you’re doing a lot of things that most people don’t do, particularly having a special person that is dedicated to start-up franchisees, which I personally think is a tremendous best practice.
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Evan: I think part of the issue in traditional business is that the costs or the penalty, although very large, isn’t really measured so that people aren’t sitting back and thinking about their onboarding of new employees and thinking about, “Well, what does that cost us in terms of lost business, lost production? What does that cost us if we don’t keep that employee because they’re frustrated and they leave? How much does it cost to recruit new employees?” And those costs are huge, but people tend not to measure them. Wherein franchising, the costs are not only huge, but you have this thing called an FDD and an Item 20, and why don’t you, because I’m talking a lot here, Scott, why don’t you tell everybody the impact, what an Item 20 is and what the impact is?
Scott: It’s huge because in Item 20, you’re gonna be showing to the world the growth of your franchise system, the number of units that you have in your system and most importantly, any closures that you have. So as you said, you’re kind of hanging your dirty laundry out there. So if you’re not doing a good job of onboarding and training your franchisees and they close, you’ve gotta publish that number. And that is one of the first place of…the two first places that a prospect will go to. And your franchise disclosure document is that Item 19 that tells them potentially how much money they can expect to make, and Item 20, what’s happening within the system in terms of closures, termination, etc.
Evan: And if they see high closures, the likelihood of getting them to become a franchisee becomes almost non-existent. So, taking this back, you know, think about how different your business would be if you were required to give every potential new employee statistics on the likelihood that someone was gonna be able to succeed at work. And that’s essentially what happens in franchising. And so the point that I wanted to deliver to everyone listening right now is tracking the effective rate of getting someone fully up to speed and measuring that economics and measuring the economics of turnover and retention are huge benefits of training. So one of the questions I constantly get asked by people is how do I justify my department? And, of course, everyone knows who listens to this podcast that a lot of companies don’t value training and they don’t invest in training and in large part because they don’t see or understand the impact. But if you could measure the effectiveness of new employees and how much faster you can get them up to speed and what that is worth to the company, and if you can measure the impact of improved training on your turnover of employees and retention and what the cost of that is to the company, those are two very easily measurable items. I say easy. Nothing’s easy, but there are things that you can, in fact, measure to show the value of training. So I encourage everyone to kind of go back and think about that in terms of how you look at your training and how you present ROI. Scott, we’re running out of time, so I’d like to end and ask you to share just one training tip with our audience.
Scott: Yeah. I’d say that one training tip would be that understand that people are different. So everybody that you are involved in training, they’re gonna receive that training differently. And some of that is generational. You know, the baby boomers received training differently than the Gen Y’ers do, and they receive it differently than the Gen X’ers do. Some of it is just personality and behavior based as well. You know, the biggest thing that a trainer can understand is, is that if they’re training 10 people during a month period, those 10 people are all gonna be different people, and you’re gonna have to take a different approach with each one of those 10 people.
Evan: That’s an excellent advice, really excellent advice. Scott, thank you so very much for being on the show. I really appreciate you taking your time, and I hope everyone has a good day.
Scott: My pleasure. Take care.
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