“building future success”

Microsoft PowerPoint - Building Future Success Survey Report (April, '10) .pptApril, 2010April, 2010
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• Survey results & analysis:
Response ratio & demographics
Fostering “One System” & Trust Operational Execution/Excellence
Profitability & Growth Top Challenges & Suggestions Summary of Top Issues
• Partnership Effectiveness Scorecard
• Recommended actions
& past survey results
Survey objectives…purpose
barriers in system that interfere with us working effectively
together & with KFCC;
the top 2-5 issues of concern, & improvement actions, we all
agree on;
issues, or problems.
• Measure & benchmark, over time, how we’re doing to enable
calibration of future action
Survey content and structure
• This year’s survey asked 19 questions, including 3 that
solicited open-ended comments & suggestions
• Questions were developed in late 2009 by Joan Bowling, her
Balanced Scorecard Committee members, with Sr. KFCC
management input & assistance from an independent
consultant, Mike Takla (MGT & Associates)
• The survey was organized along 5 “Effectiveness Factors”:
Information & Knowledge-Sharing
Brand Strategy/Success
Target AKFCF recipients (539):Target AKFCF recipients (539): One survey per franchise, letting larger ones decide who else on their
management teams should also be invited to complete questionnaire.
2010 survey rollout & feedback: 2010 survey rollout & feedback: Survey launched & available for completion at Feb./’10 Convention;
3rd party supplier (Survey Monkey) handled on-line collection &
consolidation of survey results;
Summarized survey data went to Mike Takla & then AKFCF’s BSC
Committee to analyze findings & develop priorities & recommended
actions;
Yagoda & AKFCF’s leadership team for discussion & approval;
Survey results & future actions made available in early April;
Town hall meetings, AKFCF Newsletter, & local presentations to be
used to communicate survey results, planned actions & to solicit
additional feedback & opinions.
Highest AKFCF survey response ever at 74%*
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Past AKFCF Scorecard surveys*:
• Spring '07- 178/539 (33%) • Fall '07- 184/539 (34%) • Fall '08- 268/539 (49%)
How many restaurants do you operate?How many restaurants do you operate?
Which regional association do you belong to?Which regional association do you belong to?
NOTE: Numbers might not total 100% because not everyone answered all questions.
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information & know-how to successfully operate their
restaurants; 27% disagree;
productive ways to share information & “best practices”
& that information about the brand is communicated &
distributed in a timely & effective manner;
63% don’t believe that financial data, used to make
business decisions, is shared in an open & effective
manner.
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71% don’t believe that the current brand vision & strategy
are clear;
83% don’t believe we have a strong Marketing calendar
that will drive sales growth & 81% don’t think that KFC’s
product development provides a pipeline of innovative &
cost-effective products;
Just over half of franchisees (55%) believe that we’re not
responding, effectively & promptly, to address customer
issues & needs;
Data suggests that many franchisees believe: customer-related issues & needs are effectively being
addressed at the store level, but not on a national basis; much more product testing is needed before launches; we’re making quick product changes but some are too
quick, not thought out enough &/or are not the right changes we should be making.
Topic with 3rd lowest
74%74% 84%84% 80%80%
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Significant findings
jointly, in a spirit of trust & mutual respect, toward brand
growth & success;
KFCC’s part;
Almost ¾ of all franchisees (74%) don’t believe that
healthy debate & 2-way dialogue is occurring between
franchisees & KFCC.
Less than ½ of all franchisees (46%) believe that operational & performance standards are clear & reasonable & that they’re consistently applied & executed on a nationwide basis, including inspection standards (47%);
Less than ½ (48%) believe that knowledge, resources & support are provided to achieve operational goals & objectives
60% don’t believe that training is reliable, accessible & cost-effective. Although the move towards digital, on-line training appears, on the surface, to be a good idea: KFCC has done a very poor job of providing quality, “bug-free” training for the monthly fee it charges franchises; most restaurants have a very limited number of computers to
support training initiatives; training oftentimes interferes customer service delivery.
55% don’t believe we’re effectively leveraging technology & working towards continual improvement & simplified operations.
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82% of franchisees don’t believe that we’re doing all we
can to improve business profitability- many are hurting;
84% don’t believe that new builds & remodelled
restaurants are cost-effective- a major lack of
endorsement of KFCC’s current remodelling strategy;
80% don’t believe that products & promotions, rolled out
this year, were profitable for their organization- a major
lack of endorsement of KFCC’s current Marketing &
promo strategies;
The very small minority of franchisees, that disagree with
the above (4-8%), are likely: smaller restaurants, in rural areas, not heavily impacted
by current upgrade &/or Marketing/promo strategies; restaurants who have been “rescued” by KFCC, in some
way, & are not feeling the hurt as intensely as others.
Topic with lowest
System too slow in addressing customer issues & needs (55%)(55%)
Weak Marketing calendar driving sales growth (83%)(83%)
Weak product development for innovative & cost-effective products (81%)(81%)
1.1. Profitability & GrowthProfitability & Growth (1.4)
Not enough being done to improve profitability (82%)(82%)
New builds & remodels not cost-effective (84%)(84%)
Products & promotions unprofitable (80%)(80%)
2.2. Fostering "One" System & TrustFostering "One" System & Trust (1.6)
Trust & mutual respect lacking (84%)(84%)
Unresponsiveness to each others’ concerns (80%)(80%)
Healthy debate & 2-way dialogue absent (74%)(74%)
CoreCore
RequirementRequirement
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Profitability, mutual respect and goal-alignment
Q.1: Biggest challenge that franchisees and KFCC need to address together?
1. Achieving profitabilityprofitability & sales growthsales growth.
2. Building trust & mutual respecttrust & mutual respect “to beat competition, not each other”.
3. More leadership leadership teamwork, cooperation, communications & compromise-
“Partners, not dysfunctional enemies”.
4. Goal & process alignmentGoal & process alignment on brand positioning, operations simplification,
decision-making rights, at operating level, & better information/data-sharing.
Joint KFCC/AKFCFJoint KFCC/AKFCF--related commentsrelated comments
KFCCKFCC--related commentsrelated comments
1. Recognition Recognition of franchisees’ core role, knowledge & expertise- “Too much top
down, condescension, arrogance, lack of listening, understanding…bullying”.
2. Too many new & unprofitable productsToo many new & unprofitable products are “killing bottom line. Promote all
products, not just Marketing’s pet initiatives”.
3. Overly-rigid upgradesupgrades notnot costcost--effectiveeffective & require urgent attention.
(Cont’d)*279 answered question; by order of most frequently mentioned.
Survey results: Top Challenges & Suggestions (784 comments)
1. Creating relevant brand & productsbrand & products for customers which have been lost- “Back
to basics & Original Recipe. Too many poor quality, unprofitable products now
on a bloated menu. More appeal to younger generation with innovative, healthy
offerings”.
2. Lowering of food & laborfood & labor--related costsrelated costs.
3. Clear & effective Marketing program, advertizing & promosMarketing program, advertizing & promos based on “facts
& customer needs, not gut feel. More rigorous product testing before launches.
Lack of overall impact & success that Marketing (& remodels) have had on sales-
completely out of touch with reality. We’re discounting our products away”.
4. More & better front-line trainingtraining, “which is practically non-existent now”.
5. Fairer & more balanced Inspectors/inspectionsInspectors/inspections- “Their sole mission appears to
be to support KFCC’s agenda of putting franchisees out of business to gain more
control”.
Business PracticesBusiness Practices--related commentsrelated comments
(Cont’d) 21
1. “Addressing rural & urban differencesrural & urban differences & related customer needs.
2. Proactively managing & responding to governmentgovernment--driven driven ‘‘interferenceinterference’’.
3. KFC’s marketing of the brand has made customers ‘‘unthinkunthink’’ us. The yearly
calendar is unreliable & a joke.
4. Surviving the current economic climateeconomic climate….& KFCC’s hostilehostile attitudeattitude”.
Other Notable MentionsOther Notable Mentions
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Communications, information-sharing and business alignment
Q.2: . How can franchisees and franchise organizations be more effective?
1. KFCC needs to listen to, respect & trust franchisees’ knowledge, expertise &
viewpoints.
2. More & better sharing of information & data- financial, marketing, facilities.
TwoTwo--way Communicationsway Communications
2. Better: longer-range planning; store-level training for Managers & teams; innovation & more open-mindedness; access to professional services & experts to assist in field; cost control.
3. Clear understanding of needs, common business goals, strategies & tactics-
“One agenda, not two”.
4. Profitable Marketing & promotional programs that clearly add to bottom line.
5. Sharing of decision-making between KFCC & franchisees- new products, ads.
Business Strategies & ProcessesBusiness Strategies & Processes
*238 answered question; by order of most frequently mentioned. (Cont’d)
Survey results: Top Challenges & Suggestions (784 comments)
Communications, information-sharing and business alignment
Q.2: . How can franchisees and franchise organizations be more effective?
1. “We need to stand together with strength, solidarity & firmness.
2. Work with KFCC in these tough times as partners, not enemies.
3. Focus on the future & competitors, not on the past & inward against each
other.
4. KFCC needs to get their vindictive Inspectors off our backs.
5. Current NCAC issues need to be resolved. NCAC needs to get its act together
& not simply sit back & blame KFCC for poor products”.
Other Notable SuggestionsOther Notable Suggestions
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KFCC needs to understand the formula: Franchisee success=KFC success
Q.3: How can KFCC be more effective?
1. “Quit bullying, bulldozing, attacking & policing. This is a partnership, not a
dictatorship. Drop the ‘old school’ management techniques.
2. Listen to the voice & ideas of franchisees & support them. Create a climate
where honest exchange of ideas are encouraged; more transparency.
3. Care about the business growth & success of franchisees, which clearly isn’t the
case now.
4. Top KFCC leadership needs to rebuild the trust & credibility they’ve lost with
all the franchisee community; need to demonstrate leadership with honour &
integrity.
5. Don’t wait for Federal lawsuits to start cooperating.
6. Provide straight answers to questions & stop dancing around the issues & data.
7. Concentrate more on running the business (i.e. sales growth & franchisee
profitability), rather than just on EPS, revenue royalties, Yum stock values &
Wall Street”.
Management StyleManagement Style
*267 answered question; by order of most frequently mentioned. (Cont’d)
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1. “Clearer business vision, goals, strategies & tactics, incl. alignment on these.
2. Higher quality & cost-effective training, incl. sharing of “best practices”.
3. More rigorous testing of new products before launch that everyone
participates in; use RRP.
4. Simplify operations & menus.
5. Rebalance the role of the ‘gotcha’ Inspectors who currently are totally
counterproductive.
6. Quit giving away new products & diluting value.
7. Stick to proven ‘basics’ (Original Recipe, COB) & new products that aren’t
capital/equipment intensive”.
(Cont’d)
1. “Be more realistic concerning facility actions in these tough economic times.
2. Stop operating on ‘gut feel’ & financially onerous remodels based on
international markets. Our reality is meeting North American customer needs.
3. Visit & spend more time in restaurants to better understand our business
environment, customers & restaurant business models/success factors.
4. Give us new U.S.- savvy leaders who understand our customers, & can work
with franchisees on a win-win basis, not foreigners who don’t & can’t”.
Other Notable SuggestionsOther Notable Suggestions
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What’s lacking: • mutual trust & respect;
• understanding of N. American customer & needs; • external focus on customers & beating competition; • cooperative problem-solving in lieu of legal recourse; • leadership teamwork, cooperation & compromise; • recognition of franchisees as key stakeholders, their
needs, expertise & viewpoints; • top KFCC leadership credibility with franchisee community.
WhatWhat’’s lacking:s lacking: • mutual trust & respect;
• understanding of N. American customer & needs; • external focus on customers & beating competition; • cooperative problem-solving in lieu of legal recourse; • leadership teamwork, cooperation & compromise; • recognition of franchisees as key stakeholders, their
needs, expertise & viewpoints; • top KFCC leadership credibility with franchisee community.
Business Strategy & Processes
Management Style & Behavior
AKFCF/KFCC partnership scorecard
Information & KnowledgeInformation & Knowledge--SharingSharing
Brand Strategy/SuccessBrand Strategy/Success
Operational Execution/ExcellenceOperational Execution/Excellence
Profitability & GrowthProfitability & Growth
P A R T N E R S H I P
E F F E C T I V N E S S
2.72.7
1.81.8
1.61.6
2.32.3
1.41.4
Scores*Scores* Average OverallAverage Overall
EffectivenessEffectiveness
Spring 2007Spring 2007 Communication: 2.6
Innovation: 2.5
Training: 1.9
Profitability: 2.3
Innovation: 2.1
Training: 1.9
Profitability: 1.7
Innovation: 1.9
Training: 1.9
Profitability: 1.7
Operational Execution/ExcellenceOperational Execution/Excellence
Profitability & GrowthProfitability & Growth
TrainingTraining
ProfitabilityProfitability
CommunicationCommunication
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55Target
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33(Cont’d)
Rebuild Trust Franchisee concerns: Lack of trust in leadership. Lack of recognition of franchisees’ core role, knowledge & expertise- “Too much top down, condescension, arrogance, lack of listening, understanding, bullying”. 63% don’t believe that financial data, used to make business decisions, is shared in an open & effective manner. 71% don’t believe that the current brand vision & strategy are clear. 84% don’t believe that franchisees & KFCC leaders work jointly, in a spirit of trust & mutual respect, toward brand growth & success. 80% don’t believe that franchisees & KFCC are responsive to each others’ concerns- not enough give & take on KFCC’s part. 74% of franchisees don’t believe that healthy debate & two-way dialogue is occurring between franchisees & KFCC.
Action: Top KFCC leadership needs to rebuild the trust & credibility they’ve lost with all the franchisee community. KFCC Leadership needs to demonstrate leadership with honor & integrity. KFCC needs to listen to, respect & trust franchisees’ knowledge, expertise & viewpoints.
“Quit bullying, bulldozing, attacking & policing. This is a partnership, not a dictatorship. Drop the ‘old school’ management techniques”.
Listen to the voice & ideas of franchisees & support them.
Create a climate where honest exchange of ideas are encouraged; more transparency. More & better sharing of information & data- financial, marketing, facilities. Provide straight answers to questions & stop dancing around the issues & data.
Key concerns and 4 indicated actions- KFCC
(Cont’d)
New Products
Franchisee concerns: Too many new & unprofitable products are “killing bottom line.” 71% feel the brand vision & strategy are unclear. 80% believe that the new products & promotions are unprofitable. 83% don’t believe we have a strong marketing calendar that will drive sales growth. 81% don’t think that KFC’s product development process provides a pipeline of innovative & cost-effective products. “We are making quick product changes, but some are too quick, not thought out enough, &/or are not the right changes we should be making. NCAC needs to get its act together & not simply sit back & blame KFCC for poor products.”
Action: Need much better process & discipline prior to new product launches. A more disciplined approach is needed than is currently followed. Adopt & follow the Restaurant Ready Process. Early Franchisee participation is essential to help ensure all aspects of a specific promotion get a green light, with no backtracking, & to increase the odds of a successful product launch.
More rigorous product testing before launches is required. “Red Lights” must be adhered to. “Emotional Green Lights” are very risky. Franchisees should be involved throughout the development process. Last-minute, “up-or-down” franchisee votes are very risky.
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(Cont’d)
Operational Excellence & Training
Franchisee concerns: Only about one-third of respondents believe there are currently productive ways to share information & “best practices” & that information about the brand is communicated & distributed in a timely & effective manner. Less than half (48%) believe that sufficient knowledge, resources & support are provided to achieve operational goals & objectives. Less than half (46%) of franchisees believe that operational & performance standards are clear & reasonable & that they are consistently applied & executed on a nationwide basis, including inspection standards. “KFCC needs to get their vindictive Inspectors off our backs.” Inspections need to be fairer & more balanced. Inspectors sole mission appears to be to support KFCC’s agenda of putting franchisees out of business to gain more control”. 60% do not believe that training is reliable, accessible & cost-effective. Although the move towards digital, on-line training appears, on the surface, to be a good idea, KFCC has done a very poor job of providing quality, “bug-free” training for the monthly fee it charges franchises. Most restaurants have a very limited number of computers to support training initiatives. 60% don’t believe that training is reliable, accessible & cost-effective.
Action: Improve availability of tools, knowledge, resources & support, incl. reliable, cost-effective & accessible training. Improve cross-system sharing for sharing “best practices”.
Training needs to be accessible to all Franchisees, easy to use & reliable. Learning Zone should be free, to the entire system, so we can Step Change operations at every store & more effectively deliver customer service.
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(Cont’d)
Business Model Franchisee concerns: Business is not profitable. Overly-rigid upgrades not cost-effective & require urgent attention. 82% of franchisees don’t believe that we are doing all we can to improve business profitability.
Many are hurting. 63% don’t believe that financial data, used to make business decisions, is shared in an open & effective manner. Overly-rigid upgrades are not cost-effective. 84% don’t believe that new builds & remodeled restaurants are cost-effective.
Action: “Care about the business growth & success of franchisees, which clearly isn’t the case now.” Jointly identify initiatives directly aimed at improving both KFCC & franchisee profitability.
Identify processes & joint actions to ensure cost-effective builds & remodels, incl. development of innovative products & promotions. Develop profitable marketing & promotional programs that clearly add to bottom line. Include franchisee input in preparing the business case.
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AKFCF actions going forward
• Remodels & new builds- Sponsor AKFCF facilities council to share best practices & cost savings ideas for remodels & new builds to help calibrate ROI.
• Information exchange- Develop process, whereby local advertising co-ops can share information on new products & promotions, under direction of Larry Light & Joan Kiddon.
• Training- Franchisee developed, or recommended, training programs to be used at regional meetings, or as webinars- programs such as Harman’s “7-Steps to Margin Improvement”.
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Committee Members:Committee Members:
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More than 15
Southern California
Information and Knowledge-Sharing
decisions, is shared in an open and
effective manner
operations is distributed in a timely
and effective manner
information and best practices among
KFCC and franchisees
know-how they need to be successful
Brand Strategy and Success
KFC product development provides
innovative and cost-effective products
that will drive sales growth
Our system responds promptly and
effectively to act on and address
customer issues and needs
clear to the system
1 - Strongly Disagree
2 - Disagree 3 - Neither Agree Nor Disagree 4 - Agree 5 - Strongly Agree
2010 survey questionnaire
Fostering “One System” and Trust
Healthy debate and two-way
dialogue occurs between KFCC
Franchisees and KFCC leaders
and mutual respect toward brand
growth and success
easily accessible to franchisees,
managers and team members
Relevant tools- knowledge, resources
operational goals and objectives
operations and performance standards
on a nationwide basis
performance standards for our
Statements
organization
restaurants are cost-effective
We are doing all we can, as a system, to improve the
profitability of the business
Section 3: Top Challenges and Suggestions
1. What is the biggest challenge that franchisees and KFCC need to address together?
2. How can franchisees and franchise organizations be more effective?
3. How can KFCC be more effective?
Spring ’07 survey results
COMMUNICATION 20% 2.6
Communication to franchisees that is timely, accurate and 100% focused on domestic KFC brand 7% 5.0
3.1
KFCC support of regional meetings and AKFCF convention 5% 5.0 2.9
Share financial information 5% 5.0 1.9
Share 2N1 financial information/best practices 3% 5.0 1.6
INNOVATION 25% 2.5
Simplify operations (especially back of house) 10% 5.0 2.2
Appeal to the younger generation, both as customers and employees 10% 5.0
2.5
Regional products 2% 5.0 1.9
TRAINING 25% 1.9
KFCC support franchisees with fully staffed trainers and relevant materials. 20% 5.0
1.7
Constructive CER evaluations and Champs scores used for training purposes. 5% 5.0
2.1
Sustain Sales and Transaction Growth 10% 5.0 2.5
New Products that fit a realistic food and paper cost 10% 5.0 2.5
Lower Building and Equipment Costs 7% 5.0 1.8
Cost shifting to franchisees 3% 5.0 1.9
KFC BRAND VALUE 100% 2.3
N= 178/539 (33%)
Target RatingMEASURE WEIGHT
Communication to franchisees that is timely, accurate and 100% focused on domestic KFC brand 7%
5.0 2.5
KFCC support of regional meetings and AKFCF convention 5% 5.0 2.2
Share financial information 5% 5.0 2.0
Share 2N1 financial information/best practices 3% 5.0 1.7
INNOVATION 25% 2.1
Simplify operations (especially back of house) 10% 5.0 2.0
Appeal to the younger generation, both as customers and employees 10%
5.0 2.2
Regional products 2% 5.0 1.7
TRAINING 25% 1.9
KFCC support franchisees with fully staffed trainers and relevant materials. 20%
5.0 1.4
Constructive CER evaluations and Champs scores used for training purposes. 5%
5.0 1.9
Sustain Sales and Transaction Growth 10% 5.0 2.0
New Products that fit a realistic food and paper cost 10% 5.0 2.1
Lower Building and Equipment Costs 7% 5.0 1.6
Passing Cost onto Franchisees* 3% 5.0 1.7
KFC BRAND VALUE 100% 1.9
N= 184/539 (34%)
Communication to franchisees that’s timely, accurate & 100% focused on domestic KFC brand 7% 5.0 2.7 2.5
KFCC support of regional meetings & AKFCF convention 5% 5.0 2.7 2.2
Share financial information 5% 5.0 2.0 2.0
Share 2N1 financial information/best practices 3% 5.0 1.8 1.7
INNOVATION 25% 2.3 2.1
Simplify operations cost effectively 10% 5.0 1.7 2.0
Appeal to the younger generation, both as customers & employees 10% 5.0 2.2 2.2
Healthy products that are profitable 3% 5.0 1.8 1.8
Regional products 2% 5.0 1.7 1.7
TRAINING 25% 1.9 1.9
5.0 1.7 1.4
KFCC provides innovative & relevant training materials. 5% 5.0 2.1 1.4
Constructive evaluations & scores used for training purposes. 5% 5.0 1.9 1.9
PROFITABILITY 30% 1.9 1.7
Marketing that sustains sales & transaction growth. 10% 5.0 1.7 2.0
Products & promotions that are profitable & drive transactions. 10% 5.0 1.7 2.1
Lower Building & Equipment Costs 7% 5.0 1.5 1.6
Passing Cost onto Franchisees* 3% 5.0 1.7 1.7
*Very high cost to you = 1; Very low cost to you = 5
KFC BRAND VALUE 100% 1.7 1.9
N= 268/539 (49%)

“building future success”

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