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For Owners, Business Is Better By Being There

by on May 24, 2016 6:00 AM

As I’ve noted several times in my columns I have a soft-spot for the retail industry since I worked in it for a few years early in my career. I’ve written about my desire for decent customer service, and why I usually shop somewhere that’s locally-owned and operated, or occasionally a locally-owned franchise of a larger chain.

My local shopping regularly reminds me there is one crucial element of retail that virtually guarantees a good customer experience – an ownership presence in the day-to-day operations of the business.

There simply is nothing better than being in a store where someone is physically present whose livelihood depends on your positive experience and return business. Someone who cares about you and your needs and, imagine this, is happy to see you. Someone who has an ownership-stake.

For most of the locally-owned businesses I frequent that is an easy thing to find – they are truly owner-operated. The person whose skin is in the game is there doing what they can to make sure you feel like you’re one of the family. Need anything athletic? Rapid Transit. Need cooking supplies? Kitchen Kaboodle. Need pizza? Margarita’s. The list goes on and I know you have your favorites. Luckily we denizens of Happy Valley are blessed with many great owner-operated options when it comes time to part with our hard-earned cash. For that we should be very thankful!

(Before I go any further I need to provide this disclaimer: I have no ownership or relation to any of the businesses discussed in this column.)

However, there are a few locally-owned businesses that have grown large enough that an ownership presence in the day-to-day operation is no longer possible given their size. Or possibly not desired as perhaps the owner has lost his/her interest in interacting with customers.

I visited one such local establishment last week and encountered the usual trappings of corporate largesse. The people there are doing a job. They get paid the same whether you get served or not. They are doing you a favor by just acknowledging your presence, let alone taking care of you. If there is a problem it had to be your fault because they don’t make mistakes and you should be happy they even served you in the first place. You can bet that my retail experience was rather poor.

And of course I won’t be going back there ever again.

But what about those times when I find myself patronizing a locally-owned franchise of a larger chain? As I said, finding someone with an ownership stake in a local business is generally easy. How do you do that with a franchise though?

Unfortunately, trial and error from shopping is usually the only way you will discover it unless you want to do a little research. Because there are franchises that are designed to encourage that ownership presence – you just have to know where to look.

Let’s use two franchises that have a local presence as examples. Both are leaders in their industry.

The first creates more revenue than any similar franchise in the United States – well more than twice as much as its closest competitor. Sounds like the kind of franchise everyone would want in on. Now what kind of person gets one of these franchises?

To become a franchisee requires a minimum of $750,000 of liquid assets and a $45,000 initial fee. Since most people purchase an existing franchise, you’ll need to be able to pay 25 percent of that cost in cash, and be able to borrow the rest.  As they cost between $1 and $2.3 million you’ll need a minimum of another $250,000 in cash and the resources to finance a million or more. Not to mention you’ll probably be buying more than one – because you can. The bottom line being you have to be a millionaire BEFORE you can own one. Not exactly the picture you envision of someone yearning to work in a retail environment. And my personal experience confirms the disconnect between ownership and the service employees which results in poor customer service quality.

What about the second example?

As I mentioned, it is also a leader in this industry, although a third less overall revenue than the first example. But it is number one in the country in its specialty so clearly something with which people would desire an involvement. So what kind of person gets one of these franchises?

If you want to open one of these franchises you’ll have to make an initial financial commitment of $10,000. You’ll have to maintain reasonable work hours as you’ll likely close every night (considering many similar businesses are open 24/7). Plus you’ll have to be free of any other active business ventures and operate the franchise – you can only have one – on a full-time, hands-on basis.

And there you have it – the magic words. You have to operate the business on a full-time, hands-on basis. Ownership presence.

Which might be why my personal experience is they are always pleased to serve me, provide plenty of feedback during our interaction and thank me when we’re done.  And why it is one of the local franchises providing great customer service.  

So are you looking for a good customer experience when you spend your precious income?  Look for an ownership presence in the day-to-day operations of the business and you’ll find the positive interaction you seek.


John Hook is the president of The Hook Group, a local management consulting firm, and active in several nonprofit organizations. Previously John spent 25 years in executive, management and marketing positions with regional and national firms. John lives in Ferguson Township with his wife Jackie and their two children.
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