Start With A Win - How to Grow a Franchise Business

Episode Date: August 9, 2023

Today, we talk to Jack and Meghan, two executives with Hand & Stone Massage and Facial Spa, a fast growing franchise business with over 500 units across the US and Canada. They dig deep into how to gain customers, establish a strong community brand, and build a business for long lasting results.  If you want to learn how leaders grow businesses, this is a great episode for you! Jack: Jack’s background includes 30 years in the franchising industry, 15 years in the health and wellness industry, and seven years with Hand & Stone. He believes this is a marketer’s nirvana – the brand positioning aligns perfectly to consumer sentiment, a great corporate team at every level that all share the same passion for the brand, and awesome franchisees who not only bring forward awesome concepts but execute on the plans they develop to perfection. Meghan: Beginning her journey with Hand & Stone as a Spa Associate in their flagship store in 2007 Meghan, now SVP Franchise Operations where she leads a team of 17 passionate professionals that are dedicated to supporting their franchisees. She is humbled to work alongside such talented business owners and team members. Meghan is also pursuing her MBA to further her career at Hand & Stone. Main Topics and Connect 03:40 Business is about what or who!07:17 Magic of the franchise world09:04 How they get consumers to be undistracted11:18 Community connection15:17 How should a franchisee be spending their time19:52 Best practices in marketing & operations24:30 Coffee and what at the end of the day! https://handandstone.com/https://www.handandstonefranchise.com/  Connect with Adam http://www.startwithawin.comhttps://www.facebook.com/AdamContosCEO https://www.linkedin.com/in/adamcontos/ https://www.instagram.com/adamcontosceo/ https://www.youtube.com/@LeadershipFactoryhttp://twitter.com/AdamContosCEO  Listen, rate, and subscribe! Apple PodcastsSpotifyGoogle Podcasts

What do two franchise leaders have to say about growing business today? We'll talk about that today on Start With A Win. Welcome to Start With A Win, where we talk franchising, leadership, and business growth. Let's go. And coming to you from Area 15 Ventures headquarters, it's Adam Kantos with Start With A Win here. We have some great guests on in the franchising space, people who oversee marketing, people who oversee operations. Basically, this is like business in a podcast today. So I'm excited

to introduce to you the two great people from Hand & Stone Franchising, Jack Paczynski, Chief Marketing Officer from Hand & Stone, 30 years in the franchising industry, 15 in the health and wellness industry, and seven years with Hand and Stone. He believes this is a marketer's nirvana. Jack, I like that term. The brand positioning aligns perfectly to consumer sentiment. A great corporate team at every level that all share the same passion for the brand. And what do you get? You get successful franchisees and a lot of fun doing this. Also, Megan Lally, SVP franchise operations. Megan is where the rubber hits the road here and things get done. Beginning her journey with Handed Stone as a spa associate in their flagship store in 2007. Megan rose her way to the SVP of franchise operations

where she leads a team of 17 passionate professionals that are dedicated to supporting their franchisees. She's humbled to work alongside such talented business owners and team members. Megan and Jack, welcome to Start With A Win. Hey Adam, how are you doing today? Great. Hey Jack, welcome to Start With a Win. Hey, Adam, how are you doing today? Great. Hey, Jack, we'll start with you. Hey, can you take us through a little bit of the journey of Hand in Stone? How did the company start, started franchising? Where are you at today? Sure.

So we started, John Marco was our founder, started us in Toms River, New Jersey, where Megan started her career with us as well. And really his focus was on the health and wellness of massage. Looked at the model, said, hey, regular massage, very important to a healthy lifestyle. So created a membership program where folks could have regular massage. Grew that through the 2000s, the early 2000s into the 2010s. Todd Leff, our former CEO and current chairman, came on board, brought facials in, really focused on building the team out, knowing at that point we were maybe 25 spas, but his vision was growing it to a chain of 500 plus where we are today. So I really wanted to build the

infrastructure, brought me in shortly thereafter. Since then, really, it's been building that brand. As you said on the opening, Adam, it's our brand is the luxury spa experience that's affordable and convenient. And we keep driving that in everything we do. It really is supported by the consumer research. Folks want to escape right now, especially post-COVID. They want to escape. They want their hour of paradise. And we provide that to them.

Awesome. And I'm with you. I want to escape also. There's nothing like going and finding that moment, just getting a good massage or even a facial or something like that. Guys, yes, I get facials every now and then it, you should do that. It makes a difference. So Megan, talk to us about the business hand in stone started with one store at one point, you, you know, it, and now 500 plus, how did, how did we get there? That's exactly right. Well, I'll tell you the, the business is, um, with it being service-based, it's about the people. And that's exactly how we got to where we are now, is through all the people,

whether we're talking about the internal corporate team having grown to over 100 team members, or the incredible franchisees we have within our system. We got there through transparency and collaboration. And Jack roughly mentioned, in a post-COVID world, the only way to move on from all of these surprises and challenges we've endured in these last three years is to come together and talk through those challenges and share those solutions. And that's exactly how we built our company

to this point and beyond. Awesome. And is it safe to say you guys are in those 500 locations are in U.S. and Canada? Is that correct? That's right. 500 plus U.S. Canada. Great. And tell me about expansion. How's that going? How are both of you seeing franchise expansion happen? What any transitions? I mean, frankly, we're seeing a entrepreneurial surge in franchising, which is super exciting. You know, people want to get into something that they're passionate about, but they also want to, you know, as we say in franchising, be in business

for yourself, but not by yourself. So Jack, what are you seeing from the marketing side as far as franchise growth? Because you've got kind of an interesting role here. This is not a standard market for a company brand. This is, I have to find franchisees and I have to market for the franchisees and find customers. So how does that all play out? Right, so it is, you made a great point, Adam. As the economy kind of softens a little bit,

you have a lot of this middle management or folks that are looking to escape kind of the big company and go with a concept where they can really tap into their entrepreneurial spirit. So what may impact on the consumer side helps you on the franchising side. And we're really starting to see kind of the tip of the spear of that now as we're getting a lot of leads coming in from folks that are looking to, hey, how do I become an entrepreneur? How do I start my own business? So we're really starting to see activity pick up on the lead side as that economy and that uncertainty gives people the opportunity to seek out their entrepreneurial spirit.

Awesome. And then Megan, you get to work with these people and help them get their franchise out of the ground and operating. What are you seeing as far as the trends go in that? I know, you know, like storefronts are actually a little harder to get right now, but at the same time, we're seeing an emergence of the customer base again,

where they want to take care of themselves. How is that balancing out? And what are you seeing in creating and opening franchises? Yeah, that's exactly right. It's nice since I began over 15 years ago where the awareness wasn't there on the client side. Nowadays, that healthy lifestyle is a must. And, you know, Zoom has forced us to really look in the mirror, literally, and say, you know, I have to take care of my skin and, you know, really getting out there. And we've just, in the last few years, introduced body contouring. So, you know, we have grown our business. One of our core values is innovation. And so we have really listened to the consumers and understood exactly what their needs and desires are. And so we've grown along with them. on their feet. We have, as I mentioned, expanded our support team and not just in the operations department, but in all of our departments. And we have a specialized group represented in every

department at corporate that focus specifically on the pre-opening process. So by the time our franchisees open their doors, they know it's not just them and that they have an entire team, not just from their employee side, but also from us that are used to and experienced in holding their hands. Which is the whole magic of the franchise world is that there's really nothing you're doing alone. That's incredible. A few key points I want to highlight that you said here. First one is innovation. You know, you guys have been incredibly flexible in how you're growing your business and kudos to you and your executive team for that, as well as the franchisees, because if you guys come out with something new and they don't like it, I mean, it is a uphill battle to get something implemented. And generally it fails at that point something new and they don't like it, I mean, it is a uphill battle to get something implemented.

And generally it fails at that point if the franchisees don't buy in. Core values, huge. Your business functions on core values and your leadership exemplifies those core values. So that's really cool to hear. And then listening. You know, leaders listen. And that's something that your organization should be proud of from top to bottom when it comes to the franchisees. Jack, we have a lot of distraction in our world.

And a lot of people look at the marketing folks and they're like, some are adding to it, some are refining it, some are defining it. Some are defining it. Take us from this distracted environment where we're trying to find customers for a small business in a strip mall, typically. I mean, there's a hand in stone, like literally a mile from me here. And it's in a giant mall with a ton of other stores. How do you get people to say, hey, I need a massage. I need a facial. I need body contour and whatever it might be to becoming aware, to becoming interested, to becoming a customer walking in the door. How does that work in your world without all being distracted? So it's, you know, our, our strategy, you know, for our franchisees is really based at the local level, right? So we don't look at it as we've got one big $25 million or $30 million ad campaign. We look at it as we've got $550,000, $55,000 campaign.

So really what we do is we are in the community. We make sure that we're targeting folks, right, that our messaging is very targeted. So it's the right message being delivered to the right person that's most likely to want to come into our spas. And it's really done at that local level because folks don't want to go through a big obstacle in getting to their service. They want to be able to find their closest hand in stone, like the one that's a mile down the street from you, Adam, and get a message from there, understand what's happening at that spa location. And then that breaks through the clutter, right? When it's very, very personalized to you, it's very local to you, and the message is just not this generic noise out in the space, it's more meaningful and will drive more action.

So really, we are focused on that local plan and how that local hand in stone becomes your brand to go to. Yeah. Personalized to you. I like that because when we get things personalized to you, we get ownership of those and that that's what creates that ongoing connection with our customer. This obviously is a topic that, that flows to both of you when it comes to it. So we talked or Jack talked about that connection in the community. Megan, how do you get a franchisee? I mean, this is one of the biggest challenges that I see is getting the franchisee to connect with the community.

They think, bam, there's my store. I put the sign up and then I sit there at the front desk and I wait for people to walk in. But we all know you have to walk out of your store to get people to walk in your store. How do you deal with that overlap of personalizing the marketing with getting your franchisee in the community? That's a great question, Adam. And honestly, I don't just think about the customers when you frame it that way. I also think about team members, employees. You know, they want to know who's behind the customers. When you frame it that way, I also think about team members, employees, you know, they want to know who's behind the business. They don't, frankly, care

nearly as much about the name of the building as the people that are within it. So, you know, to me, it's about building confidence. I think a franchisee is willing to network even at a friend or family party if they're confident in what they have to offer from an employment experience as well as the customer experience. So we are helping to build that confidence. We have two in-person trainings that we offer, one primarily geared towards our franchisees to attend a few months ahead of their opening. And we also have a manager training class that we offer that helps the spa leader build that confidence and know really what's been successful for those that have walked before them. So, you know, once you have that confidence and passion behind your product and the business that you have to offer and the experience that comes along with that, that's where I think it's hard to even hold a franchisee back, right? Because they're just so proud of what they have to share and, and what

they're giving to the community. Awesome. And how do you, you know, people aren't born leaders, franchisees don't instantly become leaders, just snap of a fingers when they buy a franchise. How are you developing leaders so that they can go carry forth Jack's messaging to their employees, to the community? That's a fantastic question. You know, the beauty of a franchise and this one in particular is success doesn't have to be met the exact same way. So, you know, one of the first things we get to know with a franchisee is what is their business plan and specifically what role do they plan to play in that business? You know, so whether that means, you know, Jack, our new franchisee wants to be hands-on present within the four walls day in and day out, be the

person shaking hands with clients, standing behind that front desk and presenting the membership option to the customers, you know, that would be a case where Jack, the franchisee, wants to be the leader. But in reality, some of our franchisees would rather be the person, especially in our multi-unit realm, would like to be the person overseeing the business and to hire that talent. And, you know, whether it be partnering or guiding that particular leader, you know, whether it be partnering or guiding that particular leader, you know, that could be the model there as well. So, but really what it comes down to is kind of networking with those franchisees, whether it be within their market

or within the entire system. We really do need to exchange those ideas and just really kind of find the right leadership plan for them and the skills and the talents that they're bringing to the table. Totally. And I think we've been joined by another one of our furry friends here. That's Ellie. We wanted to make sure that you guys knew that she was here. So it's nice to meet everybody. I'm a big fan of them.

I love having dogs on the show. So, um, all right. Uh, so we, we, Jack, I have a question for you and then I'll ask Megan this also after you, um, you know, you, you talk to a franchisee or you walk into a franchise location. The question that a lot of franchisees have at any given moment is, what should I be doing right now? What should I be spending my time on? Jack, what recommendations do you have that franchisees should be spending their time on? So, I mean, that's, you know, Adam, and this is something that we do very, very well. As a franchisor, we really look at each unit as almost like a doctor looks at a patient. So if a franchisee is, we can identify various KPIs and where that franchisee is in relation to the rest of the chain. So, hey, maybe it's

a franchisee that's phenomenal. They're getting the leads. Marketing's doing their job, but they're not converting them to members. Well, then Megan's team can jump in and get that owner to really focus on converting. If it's product sales, right, then our, you know, the team can focus on that. If it is marketing, if we're not getting the leads, let's understand where we're not. Where is the spend at? Where are other franchisees? And the fact that we have an in-house agency, so all of the data flows through us. We're a very data-driven company. And from a marketing standpoint, we at any point can say, if it is the marketing, we can say, okay, hey, franchisee, let's focus on this because here are the other folks in your market.

Here's where they're at. Here's where they're getting their leads. And we can move dollars. So really, you know, for our, you know, we have a very, very good blueprint. We have numbers along every, you know, every part of that. So when a franchisee is, you know, needs to focus on an area, we can identify the area and then give them the prescription to help fix those areas. Gotcha. So I guess an awareness of what needs to be worked on as the first thing and then following through with that megan what do you have to add to

this in an operations role and i mean you're you you're kind of this pivotal person in the organization where if your team is not functioning that's a life or death situation for franchisees. So you guys are having this conversation a lot. I'll leave it to you to add to this whole question. That's a really good point. I mean, we're always working. The question is, are we working on the right things? And so, you know, I'll tell you my team right now,

the operations department this quarter and today even, we're going out into the markets and hosting market-wide sales workshops so that every sales team member can come together instead of going one store at a time, come together and really just share best practices. I'll tell you our theme right now is all about identifying the customer's needs and offering solutions. And I think that's the best way to be successful in this business and probably any other. I'll tell you, we borrowed that concept from a very, very successful, talented multi-unit organization over in Fort Lauderdale, Florida, that is boasting some of the highest sales, which is really, to me, affirms what direction we go in is to not just, you know, sit in our offices, Jack and I, and dream

up what we think should be the next step. You know, we really hone in on the data and let the performance of the franchisees drive us to say, how can my team bring the solutions that we're seeing in this multi-unit organization? And even though they're down in Florida, how do we bring those solutions to Seattle? So it's a really awesome concept, and my team has really felt passionate about bringing that to their markets is each person that comes into our spa may have a different need. If you can connect with them and identify that need, then we can find a way to customize the membership as a solution for them as the answer to their problems. Gotcha. And this, you know, different needs, lots of franchisees. One of the biggest challenges of a franchisor like Hand in

Stone or really any of the franchisors that I've been part of is that you have 550 franchises, you have 550 ideas, you have 550 marketing experts, Jack, and they all want to tell you how you should do this. Jack, how do you take all this idea and messaging and everything and benchmark that against what are the best practices in marketing? And Megan, I'm going to ask you the same thing on best practices in operations. So, Jack, take it away on marketing. And Megan really tapped into this. It's soliciting franchisee feedback. We, on the marketing side, but throughout the organization,'re hearing and then we meet together so we're not you know we're not in some ivory tower coming up with ideas as megan said we are with the franchisee committee that really has that voice and then what we do is we we go through

the data that we have but the consumer research that we have we we then look and hold these ideas up against what the what the consumer data is telling us. And we take that, you know, for everything we do, we take that test. Is it aligned with the brand message? Is it aligned with what, you know, our culture is to the consumer? And is it something that we can execute? Because one of the great things, and I've been in franchising a while, as you said in the opening, one of the biggest challenges for the franchisors to put something together, the franchise, it's almost like a promotion in a box. So it's a proven promotion

and it's something that, hey, marketing's not creating something that operations can't then, you know, have the teams execute at the spa level. So, you know, we've done a great job and hats off to Megan for really working closely with us to bring everything together. So when we do a promotion or a campaign for the franchisees, it's in a box, everything they need to know from the spa associate training to, you know, what POP to what is the message going on and what is the meet, everything is put together. So it's very easy. And that's to me, because we understand what's happening at the franchise side, because we're listening. So we know, hey, even if we have the greatest idea, if they can't execute it, it's not going to work. It's listening.

Awesome. Megan, operations. How are you building consistency in operations, you know, around what Jack's talking about here. Yeah, I think Jack said it best. You know, I'm very proud of the seven committees that we have that meets on either a monthly or bimonthly basis. We actually just brought all of our committee members, which totaled nearly 50 franchisees, together in what we called a mid-year summit. We hosted it in Spring Lake, New Jersey. It was an amazing venue, amazing to bring our franchisees to the beautiful beach of New Jersey. And we had a two-day event where they were able to spend just as much time networking with one another, but then also answering some real questions and delivering some really great ideas on what direction we should be going in, not just operationally, really every, every exec team member was present to really take it

all in. I have to give a lot of credit to our CEO, John Tezza. I've never met an owner that could be so calm and cool and collected when so many great ideas are getting thrown his way. And you're thinking, gosh, you know, these are great ideas. How am I going to make this all happen? But he is always ears open. He's always willing to ask the questions and take in the answers that these franchisees want to see us prioritize. So in that mid-year event, mid-year summit, the first day was our committee members and then the second day was our multi-unit owners. And so we have a collection of 27 organizations that have four or more locations. Our franchisee that has the highest has nearly 50 locations. So that just tells you, you know, we're listening to every group and every facet.

It's important for us to understand some people have been in this franchise for 15 years, but there's others that have been into it for 15 days, you know, so are we bringing them all together to talk to one another and to also make sure their voices and their needs are heard? Awesome. Yeah, definitely the power of a franchise brand is in the network of the franchisees and you guys really tap into that well. So congratulations on that. And kudos to John for all of his, you know, you're kind of shepherding a lot of different, you know, ideas around and have to refine all that. It's challenging, but it is very rewarding to work with a franchise network. So I have a question that I ask all of our great guests on the show. We'll start with Megan and then go to Jack for this. And that's,

how do you start your day with a win? Oh, well, I can't lie. It always has to start with coffee if I want to win that day. But I do really like to set intentions. What do I consider a successful day at the end of today? You know, what do I need to do? What's most important to me? You know, how am I going to make today a win? I think if you don't take those few minutes at the start of the day to say, what am I looking forward to in my professional life? And what am I looking forward to today in my personal life, then I think you're leaving a lot to chance. Awesome. That's, I mean, what a great way to start your day, Megan. Jack, how about you? How do you start your day with a win? So I'm an early bird and like Megan, I need the coffee to get started, but I love to start first thing in the morning, going through emails, you know, making sure that there's,

you know, that everything's taken care of. Then I can hit the treadmill for a while. My dog visits me sometime first thing in the morning. Sometimes she doesn't hit the treadmill at that point. That really enables me to kind of get all my thoughts together of the emails, you know, what I have on the agenda for the day. So generally from the treadmill, I'm giving myself messages on the phone so that, you know, to really set my day and to set my agenda for the day with the ideas that come from there and then jump into the office. I still love, even though I'm home today, I love going into the office. You know, my team comes in, we still, you know, you know, then we bounce around the great ideas before going out and meeting with the franchisees. So love, love starting every day like that. That's awesome. Jack Paczynski, Chief Marketing Officer

and Megan Lally, SVP of Franchise Operations, Hand and Stone Massage and Facial Spa. Make sure you check out the franchise site, handandstonefranchise.com. Jack and Megan, thanks so much for being on Start With A Win and thanks for all you do. Thanks, Adam. Thanks for joining us on Start With A Win. Be sure to like and subscribe to this episode and share it with your friends. Also, be sure to check out Adam on YouTube at Adam Canto CEO, as well as on all the social media platforms. And don't forget, start with a win.