Start With A Win - Popped to the Top: How to Become an Expert in Franchising | Rob Flanagan, President of Hounds Town

Episode Date: December 20, 2023

Want to know the secret sauce of turning popcorn into profit, it's not butter!Discover the incredible journey of our guest, Rob Flannagan, who went from selling popcorn as a minimum wage employee to becoming the President of Hounds Town, USA, a leading doggy daycare company. In our engaging podcast today, Rob shares the secrets of his success in the world of franchising, leadership, and business growth.  Learn how he partners with founders to bring their brand dreams to life and create healthy franchise systems for rapid expansion. Find out what it takes to surpass the 100-unit milestone, a challenge many emerging brands face.Robert Flanagan is an experienced franchise executive with a successful track record of partnering with founders of emerging franchise concepts and building brands from a few locations to thriving mature companies.  A rare combination of honoring the heart of the founder's vision while building the sales, financial, operations, and marketing departments.  Most passionate about guiding franchisees to achieve their dreams by building a culture that honors “when you met one franchisee, you met one franchisee”.  A frequent speaker on franchising, emerging brands, and culture.  Most importantly an eggnog connoisseur and 80’s music trivia expert.01:48 Your career dreams at 8-years old04:50 Focus on the founder’s vision  06:45 What is EOS? 08:13 Hurdles, I have to overcome hurdles!14:44 Opinions are our own auto biographies16:25 Two areas of franchisee upscaling19:20 Have to do several of these for the pay-off22:05 You need this…keep listening to the end, may need to rewind and listen again!https://houndstownusa.com/ ⚡️FREE RESOURCE: 𝘞𝘩𝘢𝘵'𝘴 𝘞𝘳𝘰𝘯𝘨 𝘸𝘪𝘵𝘩 𝘠𝘰𝘶𝘳 𝘓𝘦𝘢𝘥𝘦𝘳𝘴𝘩𝘪𝘱?  ➡︎ https://adamcontos.com/myleadership===========================Subscribe and Listen to the Start With a Win Podcast HERE:📱 ===========================YT ➡︎ https://www.youtube.com/@AdamContosCEOApple ➡︎ https://podcasts.apple.com/us/podcast/start-with-a-win/id1438598347Spotify ➡︎ https://open.spotify.com/show/4w1qmb90KZOKoisbwj6cqT===========================Connect with Adam:===========================Website ➡︎ https://adamcontos.com/Facebook  ➡︎ https://facebook.com/AdamContosCEOTwitter  ➡︎ https://twitter.com/AdamContosCEOInstagram  ➡︎ https://instagram.com/adamcontosceo/#adamcontos #startwithawin #leadershipfactory

How do you go from being a minimum wage employee selling popcorn to being the CEO of a company that does doggy daycare? Today, we find out when we talk to Rob Flanagan about franchising and his career. Welcome to Start With A Win, where we unpack franchising, leadership, and business growth. Let's go. Coming to you from Start With A Win headquarters at Area 15 Ventures, I'm Adam Kantos with Start With A Win. Today we have Rob Flanagan on the show. Rob began his franchising career as a minimum wage employee and first hire at Doc Popcorn. I mean, imagine being the first employee at a popcorn company. Working with the founders, they grew the concept to the largest popcorn retailer in the world with hundreds of locations

globally. Having learned franchising from the ground up, Rob now focuses on partnering with founders to help make their brand aspirations a reality. He does this by honing the founder's vision while building healthy franchise systems to support the emerging brand's growth. This is really important stuff, folks. This is how companies are started. His approach entails leading from a perspective that franchisees dream of being free and that the brand has a sacred obligation to partner with them on that journey. Let's welcome Rob Flanagan, CEO of Houndstown USA. Rob, welcome to Start With A Win. It is a pleasure. I'm very excited to be here. Man, you have an interesting background in franchising. I want to dig deep into this. I mean, you went from being like the first minimum

wage employee at a popcorn company, which I know was starting and operating during some very challenging times also, to being the CEO of franchiseizations. Take us through a little bit of your history and how you got to be a CEO. You know, it's kind of my line that I tell anybody. Nobody was eight years old and dreamed of being in franchising. Everybody has this unique journey into it. But once you, for the folks that really get it, you land in it and it's in your blood. You just love it. But once you, for the folks that really get it, you land in it and it's, it's in your blood. Like you just love it. And for me, I, I was in grad school and I was in grad school to be a therapist. Wow. That's, that's what I wanted to do. That was my dream as a 25 year old. And I had a pick, uh, between two teachers. There was Dewey Freeman and Diane Israel. And I didn't know them. I didn't

really, I wasn't attached to the teacher. It's like, I just got to make a pick. And normally, I would have done it alphabetically by last name. I was like, I'm throwing caution to the wind. I'm a 25-year-old living life on the edge. I'm going to do it alphabetical by first name. So I picked Diane Israel, completely innocuous decision. Her and I hit it off and I needed a part-time job to buy beer. I'll be honest. You know, new to Colorado, fat tire was big.

I needed more fat tires. And I went to her and I was like, hey, I'm just looking for a part-time job. And she's like, well, my brother, Rob Israel, is a serial entrepreneur. He's created a bunch of businesses. He's created this concept called Doc Popcorn. He's opening his first store in Flatirons Mall and he needs, you know, entry level staff members to come in. I was like, sounds great.

And called him up. and he's a true New Yorker and I'm from Virginia. So I got a taste of his salesmanship and I got hired. I was the first hire minimum. I want to say it was like $6 an hour, something like that, six or seven and him and I I just sometimes in our journeys you get lucky and I got lucky he is an amazing mentor and he he took me under his wing I learned about business and all these other things while I'm going through grad school and we ended up does the ownership decided to franchise. And when we started franchising, everything clicked. It was the psychology background,

the business background, everything. You need all of that. And I started out as a FPC. I flew out, I opened stores. You know, I was just doing that. Moved into being a director. We ended up selling to Dippin' Dots. And then I oversaw the Dot Popcorn umbrella underneath the Dippin' Dots umbrella.

Got into some consulting. And then I really just moved into this emerging brand space because I had that experience of working with the founders of Popcorn. Wow. And in a nutshell, what I do is partner with founders who are typically around 10, 12 units. And I really focus on their vision because I witnessed this with Rob and Renee Israel with Popcorn. And then how do you honor that vision, but then bring it into the franchising as a growth strategy for that ownership and build the systems? And I oversee sales, marketing, operations, finance, and I build that infrastructure and then work with the founders to get it from,

you know, 10, 12 units to hundreds of units. And what I specifically do is really look at there's, the data may be a little bit off, but I think 80% of emerging franchise brands don't get to 100 units. It's a hard journey. That's correct. And so what I really try to do is focus on what I call are like these five to seven hurdles to that brand as a business. And then what are the things you need to do to offset those hurdles as early as possible to give you the best chance of

possible to getting over a hundred units. All right. And currently you're the CEO of Houndstown. I'm the president. Yeah. So I work with Jackie Bondanza. She's the founder. Okay. She has a CEO title. I'm president and we work on the EOS platform. She's the founder. Okay. She has a CEO title. I'm president and we work kind of on the EOS platform. She's the visionary. I'm the integrator. And I really run the, she focuses on like the big 10 year kind of goals of the brand with her husband, Mike Gould. And then I focus with, you know, the running of the business to get us there. And for our listeners, can you elaborate briefly on the EOS platform? What does that look like?

Yeah, man. It was EOS when I discovered it. Entrepreneurial operating system was so perfect for what I do because what I do is work with founders. And founders are big picture visionaries. That's Rob Israel. They are magical human beings. They see things that we don't always see, but they also have a million ideas. They want to go in a lot of different directions. And what EOS in a nutshell does is harnesses the power of the visionary and funnels it through an integrator to actually manifest those dreams and those goals and those strategies.

So you're like an interpreter and a therapist at the same time. That's one of my jokes as my background was in psychology. I said I didn't pursue being a therapist because I got tired of listening to people's problems. So I got into franchising where I listened to people's problems. Right. Yeah. I mean, a small business is a series of challenges that you have to overcome on a daily basis. Absolutely. So you also mentioned five to seven hurdles. Give us an example of some of those hurdles that emerging franchisors and, frankly, new franchisees face. Yeah. And I almost, you know, this applies to franchising for sure.

I think it applies to anybody who is growing their brand at the end of the day. And so number one is typically the brand is pretty loose on their financial discipline. And they're really just hiring to cash. And what I structure it as is when you're growing your brand, you have to start hiring to grow. And so it's working and first really putting in those financial systems because you're going to need a lot of different types of capital in different ways and be really, really disciplined on not growing too fast, but growing at the right rate to where your cash is. So that's really one of the big ones I see is that the brand will start selling to create cash, but they oversell and they get too far over their skis. And so you have to find the Goldilocks zone.

The other thing has to really do with the brand. And this is where, again, I'm just lucky to learn from such brilliant, smart people. Renee Israel is a branding guru. And I really learned a lot from her. And often the brand for that founder has been around in its core market for 10, 15 years, give or take, and they were the first to market. And so the brand and the marketing around it is structured around somebody who was first to market,

but now you're franchising and you're opening up the first, whatever it is, and Charlotte, North Carolina, but your marketing and your brand isn't speaking to the consumer in that base. Right. And so it's working with the brand to put to,

there's often a brand evolution, not really a redo, but it's just kind of taking the brand to a current place and then creating the marketing programs that you need to be new to a new market. So that's a big part. The third hurdle really is working with the founders to understand that once you get into franchising, you are now in two businesses.

You are in the business of the unit economics of what you're franchising and you're in the franchising business. And they're two separate parts of the equation and how you have to start really understanding as a founder where you control, but where in franchising you don't have as much control. And another kind of part of that is kind of, you know, working with the founders to understand that franchising at its core is a growth strategy. That's how I describe it. Founders could get private equity. They could get venture capital dollars. Most, a lot of founders are really attracted to franchising because the mission of their brand is it's their baby. Like the emotional connection to it is something that is hard to describe unless you've done it. And they want to be able to ensure that nothing affects that vision. Where at times, if you bring in other other investors they now have a voice in that

and that can be nervous uh a nervous situation for a founder but at the same time you do uh you control your mission more but you don't control as much at the unit level as you do if it's a corporate store and it's kind of really understanding the legalities of franchising and how those play. Right. Employee, employer. Joint employer. All those different things. The legalities of it are big.

And so it's really putting in systems that are intentional to kind of offset those things. The other big one ties into the finance. I think a lot of times emerging brands, you go to IFA, you go to these different conferences and you hear from bigger brands. They have 500 units and they say, you have to have this technology and you will need that technology but when you are when you're at 20 units not necessarily and it's so it's creating plans to scale technology in the different systems you have to fit where you are and your cash and so you're not overspending on something that you don't actually need sometimes Sometimes in the early stages, an Excel spreadsheet is going to do, it's not perfect, but it's going to do you just as what

you need and then take as much of the cash and revenue that you're driving and put it into the people that you're hiring for franchising. Right. At that point, you need unit profitability and growth, brand growth. Absolutely. Awesome. So any, any other key aspects in this? Those are kind of, I mean, there's a few more details, but those are kind of the, the high, the higher level things that I focus focus on gotcha um technology would be the other one typically the brands uh the their technology the point of cell machine or whatever they're using right um it's outdated yeah and inconsistent and inconsistent and right and putting in the best technology that you can afford so that you're getting really great data. So you can actually analyze how your brand is doing.

Franchising has its complexities, but at the end of the day, it's very simple. You need a replicable business model that is profitable. Right. Okay. Talk to me about. So, I mean, first of all, I totally agree. And you have to know your numbers. You mentioned data. You have to know your numbers. If you ignore your numbers, you don't know your numbers. You're never going to see Black Friday where you're going cashflow positive here. Correct. But talk to me about community involvement because franchises are based in our community. And it's interesting because I've seen people buy franchises and then they're like, okay, we're open. And they sit there and it's crickets.

They wait for customers to walk in the door instead of going out and networking in their community to be part of that community. What does that say to you or what do you think people need to be working on with that? So this is my perspective. And I think, and this is certainly true in franchising, I say opinions are just our own autobiographies. Right. I have my perspective. I have how these things work. So from my perspective within franchising, what is often happening is managing expectations in the sales pipeline with that prospect set coming in. And being very clear on what they're buying and what they actually get from the franchisor. So the analogy I use is that the franchisee is leasing a car my job as a franchisor is to keep that car up to date to keep it relevant to the uh the the

business and the economy and competition and the franchisee's responsibility is to drive that car as fast as they can, train their team to drive it. We provide best practices, or I like to call better practices, on how you do that. But at the end of the day, franchisee, you're not going to get an MBA in business from my training program. That's not how this works. You're going to need to resource outside sometimes on how you need to do that. And a big one of the areas where franchisees, there's two, where most franchisees need upskilling is managing a team because they typically are coming from corporate America. You're managing adults with mortgages to managing a younger generation. And then how do you sell and market your business locally? So we at Houndstown really lean into that.

We have an incredibly robust training program on local store marketing, community involvement. For our brand, it's critical. We do doggy daycare and boarding. We create mastermind groups. We have other franchisees who are amazing at it, and they have mentorship groups to help people understand the importance of it. And we really just make sure

that that expectation is managed from day one. That, hey, you may not have that experience. That's fine. But if you want to be a top franchisee, you're going to need to know how to be involved in your community. Wow. And what low-hanging fruit is there for being involved in your community? I mean, this is not difficult to be involved in your community, but it takes that vulnerability of going out there and walking into your neighbor businesses and having a shirt on that has your logo and talk to people about what you do at Starbucks or whatever it is, things like that. I mean, talk to me about what you see successful with these people, even though they might be uncomfortable to do it. Yeah. For us, and we have a kind of built-in advantage being a dog-based concept,

there are so many local dog events. It will blow your mind. Rescue groups, humane societies, shelters. I mean, just here in Denver, there's a big one in Washington Park every summer. It's huge. And these things are often pretty inexpensive or free to get into. And what I find, it's really about, are you extroverted or are you introverted? Right. And even if you're introverted, how can you put on the face when you need to? Because it's your business. It's your dream as a franchisee. Sometimes we coach franchisees. Hey, this is OK. You need to hire somebody who this is their strength.

So a manager, a shift lead. You don't have to. It can just be somebody on your staff who's that Jim Carrey, the future Jim Carrey of the world that's working on your staff. And then the franchisee works on the logistics. Hey, I'm going to find the 10 events this year that we're going to be part of. But I think sometimes what happens, again, my opinion, is that these type of community involvement, it's an investment. It doesn't necessarily pay off after one event. It's about doing it over and over and over again until the people in your community start recognizing you as part of the community. It takes a little bit of time. It's an investment, but it's an investment that pays 10 X easy if you really, really commit to it. Totally. You know, it's interesting you say that. I'm thinking about a guy that I know. I

was talking marketing, localized marketing with a gentleman. He's a real estate agent. So nothing to do with dogs. And his number one marketing piece was he was hanging out, handing out dog poop pickup bags. Yes. And he got all of his business from having his name and what he does, you know, real estate agent and his phone number on dog poop pickup bags because everybody's dog poops like three times a day. So I mean, it was brilliant. I'm like, what do you do for a living? He goes, I go to dog parks and I sell houses. So it was funny. Yeah, no, it's our franchisee here in Denver. He's at Denver Baker and it's right off of Alameda for anybody who's in Denver and knows where that is.

And there's a ton of these apartment buildings. And he was like, oh my gosh, there's so many people in these apartments that have dogs. And so he, you know, and we worked with him on it, on a program where he goes into these multi-use big kind of apartment buildings with younger professionals with dogs and just marketed his business there and drove a ton of business where sometimes people just didn't know that he was there or they'd seen it, but didn't know what it was. Those little local community things is so powerful. And it's that unspoken part of franchising. When you think about the end consumer doesn't actually really understand what franchising is. They see a have to educate the end consumer that, hey, this is a local business. This is somebody who lives in this community. Their tax dollars are coming back into this community. And this is a local business. And being able to communicate that is really powerful.

Awesome. Let's switch channels here for a second. You mentioned a word a couple of times here that I think is incredibly important that benefited you and also benefits people in the franchise organization. And I want to unpack this. You said the word mentor, and I've had a mentor for decades. He got me into franchising and helped me learn on a regular basis. And part of mentorship is accountability. So I want to unpack that a little bit from your perspective. So I always talk about coaching, mentoring, and masterminds. Those are the three levels of accountability that happen in business, really. Other than like in a franchise business, you have numbers you need

to meet for the franchisor. So you have minimum performance standards, just like any employee would have minimum performance standards. But how do we like super achieve or overachieve those standards is by having somebody hold us highly accountable and continue to expand our capabilities. So tell me, you found success as a result of a mentor, and you help franchisees find success as a result of mentorship, or even franchisors, founders and stuff. Unpack that for me a little bit. You probably saw me smiling in spite of myself when you're saying that, because that is, for us internally, one of the mantras that we're really stressing so i'm going to start a little high level but i'm going to bring it to answering very specifically your question okay so what it comes down to is the relationship in the between the franchisor and the franchisee

and you hear a lot of different words about it. They all kind of say the same thing. And the way we communicate it is the ideal is that the franchisor and franchisee are in a partnership. And I get it. Sometimes franchisors don't like this idea of partnership, but it's what works for us. And it's what works for me. I tell franchisees that,

Hey, we got this FDD. Yeah, we got to sign it. But once we sign it, this is back in the day before DocuSign. My knowledge is getting old. But we put it in a drawer and we lock it. We don't throw away the key and we use our relationship to manage what is an incredibly intimate partnership. It's incredibly intimate. Franchisees are typically putting on up their life savings to achieve a dream. It's powerful when you really get down to it. And I have seen the stay at home mom, no background in business, create generational wealth. I mean,

that's something to really, you can hang your hat on that as a human being to be part of that journey. It's powerful. But what it requires is this partnership and accountability, mentorship between the franchisor and the franchisee. For me, it can't be a power struggle. When it turns into a power struggle, this is just a contractual relationship. And sometimes it falls in there. I get it. But we do everything to talk to our franchisees

about the relationship and what our responsibilities are, what their responsibilities are, what their responsibilities are, and how we hold each other accountable. So it's not just me as the franchisor going to the franchisee and holding them accountable to KPI, key performance indicators, the brand, brand standards. It's a franchisee as a part of this relationship holding the franchisor accountable to what we're obligated to do. It's a get, it's both. When that relationship starts to not be on the same page, it somewhat breaks. And when I start seeing that a franchisee is interacting with the franchisors in what I call is like a customer. Hey, I'm paying this royalty. I'm not getting this. This isn't happening. We immediately stop talking about tactics and solutions and we move the relationship conversation into talking about the relationship.

And that is typically what's driving everything below it. If you don't handle it there at that customer, eventually it's going to move into below a contract relationship. Right now, it's about the FDD. Now it's about defaults. And once you go down that route, and yes, sometimes you do, but it really should be as infrequently as possible if you're investing on the front end in the relationship. So that mentorship starts with developing trust with your franchisee. I can't mentor my franchisee if they don't trust me. And so we talk about trust as the most valuable commodity in the relationship with our franchisees. It takes years to earn and a moment to lose.

And that is a phrase I got from my mentor, Rob Israel. And it's landed with me every day. That trust is what we are talking about here. That trust is, it's about your FDD. If your FDD was a little misleading, legal, but a little misleading, you kind of chipped away your trust a little bit. If you said in your sales pipeline, oh, we do this, it's plug and play. You're going to make all this money. Two years, you're going to be cashflow positive and make a ton of money. If you're doing that, you're going to erode the trust. And so in our sales pipeline through every part of the journey that our franchisees go through, we're ensuring we're building that trust because then we can

have a mentorship partnership relationship with the franchisee, which ultimately is going to drive better success at the unit level, which ultimately drives better success for the brand. I know that was a little long, but I hope I connected the dots there. No, that was great. I love the transition from mentorship to customer to contractual. And where do you sit in there because that's an easy way for us as a franchise organization or as a franchisee to gauge that whole situation now i would challenge everybody also who just runs a small business is not in franchising to take a look at that where do you sit with the people that walk in the door and

ring the register for you because it should be the same way. That mentorship is a relationship based upon trust and communication and interest in the positive outcomes for each other. So this is a key component that everybody needs to make sure that they rewind and listen to what Rob's talking about here. Now, Rob, you've given us a lot of valuable information about really business growth, leadership. And I wanted to ask you, where can we find you and Houndstown USA at online? What's the website address? Yeah, the website houndstownusa.com will pop right up.

It's a really awesome brand. Mike Gould was the original founder 20 years ago, over 20 years ago. He was one of the founding members of the New York City Canine Unit. Wow. Okay. He makes a joke. When you're the founding member of something, it means you're old. That's his joke.

But he's that visionary. He's that guy that just saw things that we don't always see long story short he he really in such a magical way sees how dogs see the world versus how humans think dogs see the world i noticed that everybody needs to go check out your website because the the videos are from the perspective of the dog. Yeah. That's our big differentiators. Everything we, our tagline is we do it for the dog. So everything in our business model is structured around that dogs are essentially wolves. They're pack animals. And they do such amazing things for us as humans. And it provides them a place where they can be a dog, where we're not putting in things that the

human mind thinks the dog needs. We build everything to what the dog actually wants and needs in our facilities. And that was all from Mike Gold. And then him and Jackie got together. She is really also a founder visionary. Mike had had a couple of stores and she was like, whoa, this is something that can be so much bigger than what it is today. She took it to that next level. Her and I randomly met at IFA, just random. And we connected. I did a little consulting on the side and then she, it was about 18 locations. She reached out and I was in a place for my next step. And then I jumped aboard. And so it's an amazing concept. I'm very blessed to be here. Awesome. Rob, you've been such a blessing for us to have on the show today. We've learned a lot

about business franchising. Make sure you check out houndstownusa.com and take a look at, you'll see if there's a location near you, might be something fun for you and your dog to visit. Rob Flanagan, president of Houndstown USA and CEO, franchise leader, just a business leader and a great guy. Hey, how do you start your day with a win? You know, this is such an awesome question. You see all these things on social media nowadays, right? Get up at 5 a.m., do all these different things, right? For me, it's not tactical, it's emotional. I have a six-year-old daughter. And every morning I wake up before she does, I go into bed and I sit with her for 10, 15 minutes.

That's a win. Totally. Because what it does for me is it re-centers me for the entire day. As executives and business owners, there is so much noise and we can get caught up. I do. And this franchisee is upset. Oh my gosh, the cash happened here. This isn't happening here. And at the end of the day, what is really important to us?

And for me, it's my family. And when I sit with my daughter for those 15 minutes, no matter what happens the rest of my day, it's a great day. Awesome. Rob, thanks for sharing that with us. You're a great father and a great man. Thanks for all that you do at Houndstown USA in the franchising space. Thanks for joining us on Start With A Win. you