This post is the first in a series by D.P. Dough CEO and President, Matthew Crumpton. Mr. Crumpton writes these posts to share a behind-the-scenes glimpse of the day-to-day operations of an emerging franchisor, as well as a level of candidness not typically seen on a company’s blog. We hope that this transparency can be insightful for those who are learning about franchising and franchise concepts, and help to illustrate the challenging and rewarding work that goes into building a top-notch franchise system.
The D.P. Dough Franchising Decision-Making Process (Part 1)
I began my D.P. Dough career as a single-unit franchisee. At that time, I would regularly worry that the franchisor was going to issue some sort of crazy requirement that would be technically legally binding, but harmful to my business. Luckily, that never happened. Still, it is easy to understand how a prospective franchisee would be concerned about the franchisor’s decision-making process, given the direct impact that it has on the franchisee.
As the leader of the D.P. Dough franchise, I have the responsibility of figuring out what the brand will do next in a way that is mutually beneficial for D.P. Dough Franchising and for all D.P. Dough franchisees. I have learned much in the past three years of wearing my franchisor cap. Through hands-on experience, I now have an approach for making decisions that gets me to the right choice most of the time.
The Big Three
Regardless of the type of the decision that the D.P. Dough Franchising team is making, we always ask ourselves these three questions: 1) Is it good for unit-level economics, 2) Is it consistent with D.P. Dough’s brand identity, and 3) Is it consistent with D.P. Dough’s company values?
Unit level economics is just a fancy way of saying, “the financial bottom line of the franchisee.” In our business, the key variable costs are food cost and labor cost. We are constantly striving to increase efficiency to reduce labor cost and to get the best national deals possible from food manufacturers and distributors to keep food cost in check. We know that if any given decision is likely to have a net negative financial effect on franchisees (even if just in the short term), then we better think twice about it. If franchisees are not making money, then the franchisor won’t be making money for long. That is crystal clear to us.
D.P. Dough’s brand identity has four pillars that will not change: Calzones, College, Late Night, and Delivery. That is the core of what we do. If any course of action is inconsistent with our identity, then we will not do it. For example, we will never have pizza on our menu. Why? Because then we would just be another pizza place that had a good calzone selection. Staying true to our brand identity keeps us focused on doing what we do best.
Any decision that we make must be consistent with our company values. Before I became a franchisor, I thought “values statements” were a waste of time. Like a lot of people, I believed they were just a bunch of fluff that you write down once and never look at again. But, it turns out that having and following a set of known values is important in a franchise organization for several reasons. First, it lets franchisees (both prospective and current) know more about the franchisor whom they are dealing with and what is important to them. Second, and more importantly, it sets the tone for what franchisees value and makes it more likely that the company will have a consistent culture throughout all locations. After much debate and discussion, we landed on company values of integrity, fairness, accountability, and work ethic. We found that the successful franchisees who were already in the system demonstrated those values. The lack of these values in a prospective franchisee also happened to be deal-breakers for us as a franchisor. (Who wants to work with someone who is always making excuses?) Following our values in decision-making means that we don’t take short cuts or make any choices that are unfair to franchisees.
So, those are the three questions that we ask ourselves when making any decision, especially ones that affect franchisees. I’ve shared the process with you. In my next post, I will discuss how we determine the best options and generate ideas for moving the business forward
Matt Crumpton, CEO and President (read Matt’s bio here)
D.P. Dough Franchising, LLC