Powered by Innovation – the 2016 Franchise UnConference


What is innovation and how can we implement it to our franchise brands’ benefit?  These pivotal questions received the Franchise UnConference treatment during a lively morning session, facilitated by the one and only David Barr, chairman and founder of PMTD Restaurants.   As David so effectively described, innovation is the implantation of invention, the process by which brands take new or additional steps to change existing results.  Innovation can be built in any area, whether it is in the form of new technologies, ideas, processes or new and expanded product lines.   Innovation ultimately creates value for your franchised brand.

However, a common problem facing franchisors is how best to foster and create innovation, and how to successfully implement the changes for the benefit of the system.   Does innovation start with the CEO? Is it a team effort of key executives? Or should it include all levels of the system, from the executives to the franchisees in the field?   The group discussed three potential avenues for fostering innovation: (i) a data/market research approach; (ii) a CEO generated approach; and (iii) a collaborative approach.

By utilizing a data/market approach, a brand can utilize both internal and external data to harness innovation.  Steve Hockett of Great Clips noted that Great Clips’ long standing practice of gathering customer data on a centralized platform has allowed Great Clips to innovate around its core product – haircuts.  Now, a Great Clips customer can walk into any Great Clips locations in the world and his or her profile will be available to the stylist.

The CEO generated approach requires the CEO and other C-level executives to serve as the driver of innovation, which is then implemented across the system.   The CEO sets the stage of where the brand is going, and the subsequent data will either support or refute the change.   While CEO driven innovation allows for a faster, more uniform ideation process, implementing the change across a system can be delayed as the franchisor obtains franchisee buy in.

Under the collaborative approach, the CEO and other executives bring varying voices to the table to create innovation.  While a collaborative approach leads to a longer ideation process, changes are implemented in a shorter timeframe, as franchisees are more likely to buy into change which they played a part in creating.  Pete Barkman of Floorcoverings International shared FCI’s formula in determining the effectiveness of decisions made: they multiply the quality of the idea by the level of franchisee buy in. If franchisees do not buy into the change, the decision is not an effective one.

Sam Ballas of East Coast Wings noted that East Coast Wings employs a collaborative effort in evolving all aspects of the brand.  This includes employing focus groups made up of both franchisees and customers by territory.  Mark Kartarik of Sport Clips shared that he maintains standing weekly calls with both his executive team and the president of the franchisee advisory group that foster innovation.  As a result, Sport Clips was able to accelerate the implementation process.

While the collaborative approach is helpful in creating franchisee buy in, a franchisor needs to avoid the trap of perpetual collaboration by spending too much time and effort on endless meetings and breakout sessions.

The session then discussed ways in which a system can implement innovation. Dustin Hansen of InXpress noted that InXpress holds monthly conference calls in which it recognizes franchisees that have brought new ideas to the system, and that these standing calls have led to the development of additional system-wide processes.  David Barr noted the importance of utilizing the franchisees’ experience in the field in formulating new ideas for the system.    Greg Carafello of Executive Franchise Group noted that a CEO needs to take ownership of and drive innovation by being on the front lines with franchisees.  A CEO should pull innovation out of franchisees, rather than trying to push it on them.

Finally, David Barr closed the session by both characterizing innovators, and describing the ways companies can foster innovation amongst their team. He first outlined the following five traits that innovators possess:

  1. Continually Curious. Innovators are intellectually curious, studying not only the competition, but other businesses operating in different spaces.
  2. Ego in Check. Innovators must put aside their egos and be able to recognize whether or not a change drives value to the system.
  3. Good listeners. Innovators activate collaboration and buy in by actively listening to others’ needs and ideas.
  4. Confident. Innovators must have confidence in themselves and their ideas so they feel comfortable entering uncharted territory.
  5. Results Focused with Understanding of Processes. Innovators first focus on the end game, then on the processes necessary to get there.

David Barr closed the session with his method of creating innovation for his business.  For David, the process starts with data, including market research.  This first step includes time spent in the field with employees and franchisees.  At some point, David creates time with other senior leaders solely dedicated to the innovation process.  Once ideas have been formulated, the collaborative process may begin.