Start With A Win - Franchise Revolution: Inside McDonald's Bold Strategy for Unprecedented Growth!

Starting point is 00:00:00 What is McDonald's growth strategy? Today, we talk to the person in charge of that on Start With A Win. Welcome to Start With A Win, where we unpack franchising, leadership, and business growth. Let's go. Today on Start With A Win, we have Brad Bogan. Brad is the U.S. Vice President of Strategic Franchising for McDonald's. He's been with the company for about five years. He's focused on elevating staff development and owner-operators results through extraordinary service and support. This is a huge

Starting point is 00:00:31 win for the franchisees. Brad strives to deliver critical resources and eliminate obstacles to success. So the system is at its best for their people and customers. Brad's experience at Deloitte, Walgreens, PepsiCo, and KPMG paved the way to his success at McDonald's. He's got a lot of experience in business growth. Brad has his BS from Northeastern University and his MPP from the University of Chicago. He's got experience in food and beverage operations, franchising, multi-unit retail, consulting, supply chain, global. I mean, the list goes on and on this guy has been deep in business he's a leader coach mentor advocate sponsor as well as and here's a great part a husband father son brother and a friend his interests include family travel rowing volleyball music and film brad welcome to

Starting point is 00:01:23 start with a win adam thank you glad to to be here and looking forward to our great conversation. Awesome. Hey, Brad, I mean, you work with a household name here and there's so much that we know about McDonald's, but there's so much that we don't know about McDonald's. You know, a lot of kind of the why behind the scenes, things like that. So let's start this conversation about you, your business growth, and the brand that you're with, the most amazing brand on the planet, frankly, by peeling back the culture first. Can you explain the why behind McDonald's? The why behind McDonald's? McDonald's is a part of everyone's childhood and everyone's adulthood. And each of us has our own version of McDonald's, which changes and evolves as we change and evolve.

Starting point is 00:02:13 So my McDonald's version is different from my kids. And the great thing about the brand is it evolves and grows with each of us. So we have our own personal connection with McDonald's. That's fascinating. I remember, so when I grew up, I mean, on call it Friday night, Saturday night, a guy that was in my high school class, his dad owned the McDonald's. They still own it. And that's where we would go hang out and meet all of our friends. It was just part of the community and part of the culture of really our high school and everybody that I knew. And you're right.

Starting point is 00:02:46 I mean, almost all my friends worked there. So it was really kind of a cool connection. When you talk about people like my friend's dad, who is a franchisee at McDonald's, and so many other franchisees, we see people get into franchising because they want to, you know, be in business for themselves, but not by themselves, of course. That's right. Those of us in franchising say that a lot. But ultimately, there's a certain like cultural value behind the franchisee, you know, kind of what touches their heart and gets them into it. How

Starting point is 00:03:22 do you describe that? Well, you know, I would say that McDonald's is one of the largest global corporations you're going to find that's made up of individual entrepreneurs. And you're right. There's a connection to the community. And McDonald's is a community house. You'll find Little League baseball team sponsored there, soccer team sponsored, celebrating, birthdays being celebrated there. You'll find seniors coming in the morning to meet their friends for coffee and breakfast and spending hours chatting. This happens across the United States and the globe as McDonald's is a community house. So when you are a franchise owner operator, you are operating a community house that's trusted in terms of our values, quality, service, and cleanliness. And also, you're able to create and connect with your community.

Starting point is 00:04:11 You're creating jobs for youth and others. You're helping folks with workforce development, leadership, training, and skills. You're giving back to community. You're supporting local school councils. You're doing backpack drives. You're doing local school councils. You're doing backpack drives. You're doing turkey giveaways. You're building bikes and giving them to kids that deserve them. You're working to support all kinds of things, Ronald McDonald House charities,

Starting point is 00:04:35 in your community. So you're doing more than just running your own business. You're actually a part of the community. Brad, you talked about community. Everybody thinks McDonald's is like this giant corporate entity. Is that not correct? I mean, there's so much that happens in the community around McDonald's. It is local. It's a franchise, which is community-based. What do you think about that? Well, you're right. McDonald's provides a brand, a great product set, and a platform for franchise entrepreneurs to come in and bring their own energy and ideas and creativity to our base and structure. We're a platform with a playbook. It's turnkey and the system works if you work it. You're in business for yourself, as you said, but not by yourself. So that's what McDonald's brings. But it is made up of individuals that are local, that live in your community, that are in your homes of worship, that are on your chambers of commerce and other things. And they're investing right then and there.

Starting point is 00:05:44 They're investing their business taxes. They are providing things. And they're investing right then and there. They're investing their business taxes. They are providing jobs. And they do those things right then and there. So we only own, Adam, 5% of the stores in the U.S., which is just over 600 restaurants of the over 13,000 restaurants that are on the corner of Maine and Maine in the U.S. So it's important to myth bust that McDonald's does not own and operate most of our restaurants, just a very small percentage.

Starting point is 00:06:13 Those folks are your local neighbors. Awesome. Okay. So let's get into McDonald's franchise expansion now, because I mean, for a long time, everybody had this belief, okay, McDonald's isn't growing anymore. Franchises, they're sold out. You can't get any more. Oh, I wish I could get a McDonald's, things like that. But you are really opening the doors for sales in the marketplace for existing and new franchisees. Is that correct? Can you tell me about that? You're absolutely right. And we're super excited about the initiative. We have never turned our doors open the way we're doing it now. We've never directly gone out and had a recruitment drive. We're actually looking for folks. We're looking for folks just like you, just like America. We're

Starting point is 00:07:03 looking to add more growth and diversity to our system. We want to continue to be green and growing. We want to look like America. We want to reflect the markets that we serve and we want to reflect the customers that support us. So we are actively seeking new folks to take advantage, take a look at our golden opportunity to become a franchise owner-operator in our great McDonald's system. The system creates wealth. The system supports communities. The system delights customers. And if you're growth-minded and if you're ready to work hard for your own business, we really want you to take a look at what we have to offer. So we're actively seeking more folks to come in. I love the golden opportunity statement. That's good. Do you

Starting point is 00:07:51 guys have any publicly stated growth goals that you can share with us? No, no publicly stated growth goals, but we want to continue to be green and growing. So we're looking for folks that meet our criteria. And there are a couple screens. One, hopefully you're entrepreneurially minded with a growth spirit, a customer focused mentality, and you're willing to work in here and build culture and people with us and really delight our customers. We also want you to have a certain level of investment capital available, whether you can raise that and that kind of thing or bring that to the table. And we'll also help you if you're undercapitalized to take advantage of some of the financial support that we have available for this drive. Secondly, we want you to be an owner and an operator. And that's really, really important, Adam, because some of the

Starting point is 00:08:45 other franchise opportunities will allow you just to be a financial owner. But here we think the magic of McDonald's ownership and why we've been so successful and why we've created this industry and still dominate this industry is that each franchise organization is anchored on a single sole proprietor. And that person is in their restaurants, behind the counter, leading people in culture, taking care of people and customers, and making sure that experience delights you every day. So when we have that at the center of each franchise organization, that organization grows. More guest counts, delighting more customers, greater customer satisfaction, and then they earn the right

Starting point is 00:09:29 to buy more restaurants in our system and grow their organization. And those organizations can then apply to have more owner-operators within that organization. So your spouse, your son or daughter can be an owner-oper operator and improve and eventually split off and have their own franchise organization. So that's how our system grows traditionally. Now we're seeking to bring some new folks in from outside the system. So there are a couple of myths we want to bust. You have to know someone inside McDonald's to get a McDonald's. Not true. You have to be wealthy in order to get a McDonald's. Also not true. And that McDonald's owns all of their restaurants. There's no possible way I can get it. Not true.

Starting point is 00:10:09 Awesome. Well, I got the first one checked. I know Brad now. So that's perfect. It's fascinating you say that, you know, with the owner operator piece, because for everybody listening, I'll tell you, there's one truth in business and that's that nobody runs it like the owner. I mean, that truly is something that us in franchising see all the time, your waste and watching how you can increase your customer count and your revenue and lifetime value of a customer and things like that. So that's what Brad's talking about here is really important for my business analytical types and frankly, anybody who's in franchising or runs their own business. So, Brad, you mentioned the sources of new franchisees. I always talk about franchising is not overly complicated, but I think a lot of people complicate it in their head. And I've always told my franchisees there are really only three ways that we grow our franchise footprint. The first one is our existing franchisees buy another store. The second one is our existing franchisees refer somebody who they want into the brand. And the third one is organic growth, where the franchisor, McDonald's headquarters or whoever the franchisor is in this case, goes out and stirs up the conversation in society and says, who wants to join us? So, you know, what Brad's

Starting point is 00:11:46 talking about here is a combination of all those things and really rejuvenating that growth metric, which is awesome to see. It's going to create a lot of great opportunities for people in the community. Is there any particular single best source that you guys are going after right now, or is it a combination of all of those things? It's a combination of all those things. And you said that really well. So our owner operators know what it takes to be them and for them to be successful. Their referrals are very key to us having the right mindset of folks that can do what they've done and build the organizations and the businesses that they've done and build the organizations and

Starting point is 00:12:25 the businesses that they've built. And they understand what it takes. So when they say, we think we've got a person that'd be great for our system, that really means a lot to us. At the same time, we're going out to chambers of commerce and we're also going out to diversity groups and we're going out to business groups and we're going out to business groups, and we're going out to schools and graduate programs and lots of different places to really raise awareness that we're out to seek new entrants. So we want to raise the awareness. And folks like you are helping us with this message, too.

Starting point is 00:12:59 You're also going to see pretty soon a digital campaign where we are really telling the story of our owner operators and having them tell their bona fide stories to you so they can relate to other folks, that other folks can see themselves in our owner operators and can relate to that. And we'll click through to learn more about the opportunity. So you'll see a digital campaign. We'll be doing roadshows and going different places. And most of us will be standing up and talking in front of groups, kind of raising the awareness of our opportunity. And we will be doing a multi-level tiered strategy to raise awareness and to source and recruit folks to take a look at our opportunities. So all those different sources we'll be bringing together to bring more folks into our system. We think the time is right right now, Adam, because the strength of our business has never been greater. So it is ripe to support new growth, right? And we're also driving on development. We're opening new restaurants. So we're doing fantastic on same store comp sales

Starting point is 00:14:04 year over year, and it also supports new growth and expansion. So we're doing fantastic on same store comp sales year over year. And it also supports new growth and expansion. So we'll be building new restaurants as well, expanding the capacity, expanding the pie in our system. Awesome. I mean, it's interesting when you listen to this, because what Brad's talking about is not really common in franchising, where the corporate entity, the franchisor, the headquarters, the people who really kind of work the financials internally and in the executive suite, things like that, they almost kind of take franchise sales for granted. It doesn't sound like McDonald's is doing that. It sounds like McDonald's is pushing on the gas with franchise

Starting point is 00:14:41 sales. And for all my franchisor friends out there that are listening to this, listen to what Brad's talking about. I mean, you have to focus on growth. If you're not focusing on growth, I mean, you're going to stagnate and you're going to start to die. You're going to start to shrink in size in your franchise organization where McDonald's is going after it the right way. They're not only working on brand growth, they're working on same store sales growth, as you heard Brad talk about here, to create more successful franchisees. Because if you're not trying to create more successful franchisees, you're in it for yourself, not for them. You've got to be in it for them, for that franchise system, and help everybody achieve more. And what does that do for the franchisor?

Starting point is 00:15:19 It helps the franchisor become more successful also. And Brad knows that. He hit the nail on the head. So when you talk about creating a successful franchisee, Brad, give me some of your key points. I mean, you've got a wealth of business experience in different brands and food and beverage and, you know, really across business as well as even like Deloitte. So, I mean, you've had an interesting look into how business growth happens. What causes a successful franchisee and what should those listening to this be working on regardless of what brand they're under? Well, you mentioned the pride of ownership.

Starting point is 00:16:03 The pride of ownership says every day I'm working for my organization's success. I'm also building a legacy that I can then succeed with my children and I can build intergenerational wealth. I'm trying to build something that lasts beyond me. You can build it to flip or you can build it to last. Our franchise organizations are built to last. I mean, tell me the last time you've seen a McDonald's restaurant with doors shuttered or work on the windows. We don't close. We only grow. Okay? And all of our franchisees are hungry for growth. The best thing that they can gain from our system is more growth. They're always seeking more growth.

Starting point is 00:16:51 They want more restaurants. They want to provide opportunities for their teams to have greater leadership roles. So as they grow and expand, they have supervisors and they have directors of operations and they have vice presidents and their organizations become large corporations as they continue to bring on more units. So, you know, you can have 25, 28, 50 restaurants in McDonald's system. And our largest franchise owner operating in the U.S. is over 100 restaurants. So there's no limit if you are delighting customers, if you are maintaining the franchise standards and taking care of your people. The sky's the limit as large as you can grow to help us take share and dominate the industry that we've been

Starting point is 00:17:35 doing. Wow. Hey, talk to me about working the system, because we always hear people, you know, if a franchisee is like, I want to make more money. I mean, the first thing we as a franchisor tell them is work the system more. What does that mean in the McDonald's brand? Because you've mentioned it before and you go into a McDonald's and you're like, OK, there's the shake machine. There's the fry machine. We know exactly where these things are and how these are put together. But do I mean, for some reason, entrepreneurs get diverted from the system somehow. Talk to me about working the system and what you've seen, you know, cause improvement in people's business by doing that.

Starting point is 00:18:12 You know, our model is simple and folks may think it's mysterious. It is so simple. It is the QSC&V. It's quality. It's service. It's cleanliness. And it's providing value. Those have been the fundamental franchising tenants when Ray started the business.

Starting point is 00:18:34 QS, C, and V, we talk about all the time. If you want to make more money, serve more guests. Grow more guest accounts. Have folks delighted with the experience and want to return and have more return visits. So if you are serving guests in a great way, they're going to return. They're going to come back to your store. They're going to share with others the great experience they had, and more folks are going to come to your restaurant. So if you grow your guest counts, you're growing your sales, you're growing your top line, you're managing your costs the way that you do and your bottom line grows. We only make money as a corporation if our franchisees are successful. So we do everything we can with

Starting point is 00:19:16 franchisee support to make sure that they can be successful. And when they're successful, we're successful as a brand. Awesome. So those four letters are Q, S, C, and V. Is that correct? So quality, service, cleanliness, and value. So everybody remember Q, S, C, and V. I mean, I don't think I've ever been to a McDonald's that is lacking any of those. So I mean, that's definitely something that culturally is a huge part of their organization. And it works very well for them and probably works very well for anybody on this podcast that runs a brick and mortar location.

Starting point is 00:19:57 I mean, you can get like three out of four of those if you don't have a brick and mortar location. So anyhow, this has been an interesting conversation. Brad, is there anything you want to add to this conversation as far as what McDonald's is up to and some direction or some motivation that really hits your heart? McDonald's continues to grow and the business has never been stronger. We are asking that you take a look at joining our great brand. And right now, what touches our heart is the way that the brand is connecting with people and the way that we're able to give back through our success. Now, please donate to Ronald

Starting point is 00:20:36 McDonald's House Charities. Our owner operators have been fantastic throughout the pandemic and taking care of first responders and taking care of teachers and police officers and doing those kinds of things. We've always done those kinds of things. We'll always continue to do those things. And our success enables us to amplify that kind of give back. So that's what touches my heart mostly. Awesome. Brad Bogan, the head of franchising for McDonald's, the strategic or U.S. vice president of strategic franchising for McDonald's. That's a pretty cool title. Brad, I have a question I ask everybody on Start With A Win, and that's how do you start your day with a win? I'll tell you a win for me is very small and very simple. And I started this

Starting point is 00:21:26 morning with this very, very win. I walked to the train station today. When I got to the train station platform, there was no one there. I took the opportunity to just close my eyes and be quiet and be mindful and just take in the cool air, just kind of blowing around me and listening to the sounds of the morning. I cleared my brain of everything and just spent a few minutes just listening and really appreciating what happened to be around me. Just taking in that small little moment, just allowed me to have a little carve out before everything of the day started filling my head again and getting ready for the demands of the day. But just having that intentional, quiet, meditative moment in nature, anywhere you are, just on a bus stop, on a train platform, just for a few minutes, take that space for yourself and take

Starting point is 00:22:26 in what's around you. That's how I start my day with the Lent. Brad, I think if you, if this franchising thing doesn't work out for you, you can make those meditation podcasts. That was good. That was great. You brought down my blood pressure a few points there. That was awesome. Just for a few minutes. Awesome. Brad Bogan from McDonald's. Great to have you on Start With A Win. It's great to see you today. Is there any place that we can go out and find you or information on McDonald's franchising? Absolutely. You can go right to the McDonald's website and in the upper right-hand corner where you see the bars, click that and you'll be able to go right to franchising and see all of the things that are available and all the information you want to know about

Starting point is 00:23:08 our opportunity. It's right there in the upper right-hand corner. Awesome. Thanks, Brad. Franchising is... Thank you. Yeah, you're absolutely welcome. Franchising is on an upswing right now, folks. Take a look at all the opportunities out there, including this golden opportunity that Brad has presented to us. There's a lot going on in entrepreneurship. It used to be kind of taboo to be an entrepreneur. When I, you know, when I was growing up, people were like, entrepreneurs, I mean, you don't, you don't want to work for anybody. You're like, now, now everybody wants to be an entrepreneur. So some great stuff out there. And some of these big brands like McDonald's are opening up and allowing folks into their network. That's just huge. So check Brad out online. Make sure you subscribe and

Starting point is 00:23:52 like the podcast, please. We're looking for some five-star reviews and thank you for starting your day with a win. Thank you, Adam. And for everyone out there, we want you!

Start With A Win - Franchise Revolution: Inside McDonald's Bold Strategy for Unprecedented Growth!

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