Scholar, Start Your Business—How to Run Your Business Like a McDonald’s

Scholar, Start Your Business—How to Run Your Business Like a McDonald’s

So, now you’ve started your business.  Or perhaps you’ve been toying with a money-making idea.  Now it’s time to take action.

But before you do, consider one of the most highly successful business models: the franchise model.  McDonald’s uses the franchise model.  But you can be a one person show and still follow the McDonald’s approach.  Authors Joel Gerschman, Howard Finger, and Rabbi Aryeh Goldman, of The Mindful Entrepreneur say, “The franchise approach doesn’t mean that you literally franchise your business.  You simply act as if you were going to” (12%).  The franchise model can help you thrive, and not just survive.

Let’s dive further into this model and how you can apply it to your business.

Go Farther with the Franchise Prototype.

Yes, “it helps to follow one of the most successful, time-tested models.  Michael Gerber calls it ‘the franchise prototype’.  It means that you view your business as the prototype for multiple franchises that are identical to the original.  You intentionally structure your business so that you could recreate it anywhere and have each franchisee succeed” (12%), say authors Joel Gerschman, Howard Finger, and Rabbi Aryeh Goldman.

The most successful franchisor I worked for, next to McDonald’s, had many systems in place, but many done willy-nilly, too.  So, they had significant room for improvement.

Their best system I encountered involved their design protocols.  In their online file, they gave their designers access to all the logo versions.  They listed their branding colors, including the RGB and CMYK numbers.  They had proprietary photos and grunge textures.  They had recommended font families.  I used a similar font family to the one they used, as their font was costly.  They had different size recommendations for headlines and body text, along with spacing and border criteria.  And they had so much more.

If you can get this detailed with all your processes—after proving them successful—then you’ve adopted a franchise-like system.

A Successful Business Thinks like McDonald’s: Systems, Systems, Systems.

McDonald’s franchises make the big bucks: “a McDonald’s franchise store averages $2.3 million in sales no matter who runs it or where it’s located, and many stores have managers who are barely out of their teens’” (12%).

So, how do they guarantee a high sales volume?  One answer is to use systems.  According to Joel Gerschman, Howard Finger, and Rabbi Aryeh Goldman, “To transform your business into a franchise prototype, you’ll need systems – lots of them.  The secret to the success of franchised businesses is that they’re systems-dependent, not people-dependent” (12%).  That means your system still works even if a whole new staff replaces the old.  One business I worked for would’ve collapsed without the Director.  He had a highly specialized skillset that hardly anyone on earth could’ve replaced, in my opinion.

But even a teenager could manage a McDonald’s.  Why is that?

When I worked at McDonald’s as a teen, we went through standardized processes.  We all had to wash our hands right up to our elbows after each bathroom break and every time we walked by a sink.  We went through training that taught us to smile at all customers.  We had frequent performance reviews.  We were told to come to work no more than fifteen minutes early.

When I cooked quarter pounders, they were timed right down to each flip.  And we had a metal disk with a handle to press the burgers down onto the grill after the timer chimed.  Every night at midnight, I mopped the floor and cleaned the washrooms.  We did manual inventory, too, filling in pre-labeled lists with quantities.

Come to think of it, most everything at McDonald’s had a system.  Systems work.  It’s like the military: everything is so standardized that the work becomes automatic

Documenting what you do is a sign of success.

How do these franchises standardize everything?  Well, they document every task.

The authors of The Mindful Entrepreneur say, “Do you have defined, documented processes describing how each task needs to be performed, or do you simply expect your people to have the motivation and skills to figure out what needs to get done and to do it right each time?” (12%).

Have you ever gone to a new job and had zero training? That’s not uncommon.  At more than one job, the employer gave me a big box full of random, disorganized papers.  That was my training.

They should’ve had the prior employees document their processes!

Wouldn’t it be nice if you came into a job that had a complete training document?  But the document wasn’t set in stone: you could find ways to improve on it.  And your proven add-ons to the document would show up as your year-end bonus.  Now that’s one way to document your work.

Seek the Dollars by Drafting an Operations Manual.

Do you create “a user-friendly operations manual, with a way to track that it’s being followed, or does the knowledge reside in your head and the heads of your key people?’” (12%), ask authors Joel Gerschman, Howard Finger, and Rabbi Aryeh Goldman.

Don’t go heady.  Instead, be manual ready.

As an example, “you’d need to be able to clearly describe the accounts receivables system so that each and every bookkeeper in every independent … franchise would know exactly how to apply it.” (13%).

One franchisor I worked for wanted to create a customer service protocol.  The main intent was to create a manual.  But how do you get the employees to take the manual seriously?  To start, you have to make ongoing customer service training part of a system and you have to reinforce your customer service expectations at every chance.  But there is so much more you could do.  The deeper you go into systems that work, the better off you’ll be.

Failure is Not an Option—so Test and Document All your Systems.

According to The Mindful Entrepreneur, “If  key tasks like accounts receivable aren’t deliberately designed and documented … you can’t expect them to perform optimally.  Unintentional or ad hoc systems produce unpredictable and unintended results.  A business made up of random systems is successful only by chance, not by design.  ‘Franchises function differently.  They install structured, designed, tried-and-tested systems for all functions of the business.  They look carefully at each task and ask, ‘What’s the best way to do this to achieve our goals?’ Then they test it, and if it works, they systematise it so that anyone can do it the same way, every time with similar results.  Nothing is left to chance” (15%).

I worked at one company as a temporary bookkeeper.  The bookkeeper I’d replace temporarily gave me boxes of files and a spreadsheet and said, “Figure it out.” And then she left for months.  When that company hired other bookkeeping assistants, they never worked out.  If the bookkeeper had documented her process in writing and through flowcharts, she may have succeeded in onboarding a permanent bookkeeping assistant.

As an example of how to document your processes, I once worked on a temporary basis as a receptionist at a law firm.  I had a week’s worth of training, and I wrote everything down that my trainer said.  This is a good way to begin documenting your processes: have outgoing staff train incoming staff, with the incoming staff writing everything down.  When I left the firm to go to school, the new receptionist had no clue how to do the job.  So, I typed up my notes for her.  That clued her in fast.

Find any way possible to document your processes, including how to work basic machinery, such as the printer.  Believe me, incoming employees can struggle with handling even a printer.

Even better, hire trainers and record and transcribe, or take notes during the live lessons.  Then turn the lessons into PDF’s.  But make sure you don’t step into copyright infringement.

Do you feel prepared to document your company’s processes?  If not, here are two helpful analogies: for creative types, documenting processes is like baking an original cake.  You have to measure things, place them into steps, experiment, see what tastes best, and write it all down before you forget.  For the techies out there, documenting processes is like creating a complex flowchart, one with many yes/no nodes.

Now you’ve got the franchise approach down.  How might you apply it? Please share any ideas for creating systems in the comments below.

Gerschman, Joel, Finger, Howard, & Goldman, Rabbi Aryeh.  (n.d).  The Mindful Entrepreneur.  Sidney: XOUM Publishing.