Andy Erskine

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4 02, 2020

The Franchise Manual Podcast – Episode #30 – Site Selection, Real Estate, and Buildout

By |February 4th, 2020|Podcast|Comments Off on The Franchise Manual Podcast – Episode #30 – Site Selection, Real Estate, and Buildout

My Podner in this episode is Brendan Charles and he’s going to talk with us today about what franchisors should be teaching their franchisees about site selection, real estate negotiations, and build-out. Bad decisions in these areas can be detrimental to the success of the location. Everybody has some skin in the game here. This discussion will benefit both new and seasoned franchisors.

Time Stamps

Brendan Charles Intro 00:00:28
Segment 1 00:02:44
Get to know Brendan
Segment 2 00:15:38
Topic Segment –Site Selection, Real Estate, and Buildout
Segment 3 01:25:10
Quickdraw Questions


  • You only get one chance to get the real estate right.
  • Real estate is one of the three main controllable in a franchise business model but real estate is only a “controllable” until you sign the lease.
  • If you don’t know what your break even is BEFORE you start looking for real estate, then your real estate decision could break you.
  • #1 rule in site selection – Never fall in love with a space.
  • The real estate brokers’ incentives are not necessarily aligned with yours – the more you pay in rent, the more the broker gets paid on commissions
  • Know exactly what your site selection criteria are BEFORE you start your search
  • How do you develop site selection criteria when you only have one location to go by?
  • Utilize the free services of your real estate broker to provide the demographic reporting
  • Once you have multiple locations in operation (data points), then you can compare performance with location attributes and fine tune your site criteria
  • Onboard your broker about the brand – make sure they share the enthusiasm of the brand’s potential as they will be your #1 sales person when presenting the concept to potential landlords
  • Spend a full day viewing all available locations in the “Market Tour”. Take copious notes on the good as well as the bad locations
  • Boil your options down to 3-5 locations
  • Time kills all deals. You have to move FAST after your market tour and get the letters of intent out quickly.
  • The franchisor should be very involved in the site selection process – don’t sit on the sidelines
  • Submitting a good letter of intent is the most important step in the whole landlord negotiation process – rent, term, tenant improvements, etc.
  • If you don’t get the Letter of Intent right, there is no way you will get the build out right, and if you don’t get the build out right, you’ll be behind schedule and way out of budget
  • Once the letter of intent is delivered, the landlord is on notice to respond, however, that doesn’t mean that you can stop looking.
  • Always have backup sites in your pocket
  • Use two LOIs to leverage the deals against each other.
  • Once you reach the lease stage, the due diligence of the space continues – make sure that the space is exactly what the landlord advertised it to be. This is done with a site survey
  • The drawings from the landlord aren’t always accurate so don’t rely on them
  • It is best to utilize a national architect for every franchised location rather than local architects
  • Floor plan design in a restaurant – the dining room is your money maker and should be maximized
  • Familiarize yourself with the design review process – go down to the city offices and meet the people who will be doing the plan review
  • Identify general contractor bid pool – qualify them – Have they built in the market you are in? – Do they have the relationships with the city officials, etc. Avoid too many GCs in the bid pool
  • At the time of the build-out, the interests of the landlord are in line with yours because they get rent money once you open your doors for business, so they can be a good source of referrals of general contractors.
  • Poorly planned design submitted to the city will stall the process
  • Be aware of a TAP Fee – a fee by the city in order to tap into the utilities. This can be very expensive
  • Ensure you have a plan to get your FF&E paid for and delivered on time according to the contractors timeline
  • Qualify the bids by ensuring that everything in the bid is supposed to be there and nothing is there that isn’t supposed to be there. Be sure to clarify who will be responsible for what activities and purchases. Make sure there is a clear matrix of responsibility.
  • No hammer can swing until the building permit is issued
  • There is no return on investment for the franchisee to be on site every day once hammers start swinging, rather, they should be focused on the bigger picture of doing the activities in preparation for the opening day such as hiring staff and marketing for the grand opening
Brendan Charles
Red C Business Advocacy
Kit Vinson
214-736-3939 x 101

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30 10, 2019

The Franchise Manual Podcast – Episode #29 – Creating Customer Loyalty

By |October 30th, 2019|Podcast|Comments Off on The Franchise Manual Podcast – Episode #29 – Creating Customer Loyalty

My Podner duo in this episode is Andy Erskine and Bob Gappa of Management 2000, and they’re going to talk with us today about the importance of customer loyalty, what drives it, and how to manage it.

Time Stamps

Andy Erskine Intro 00:00:29
Segment 1 00:02:36
Get to know Andy
Segment 2 00:11:20
Topic Segment –Creating Customer Loyalty
Segment 3 01:05:10
Quickdraw Questions


What is customer loyalty?

  • Transaction count is NOT the same as customer loyalty.
  • Another term for disloyalty (brand adultery)
  • Customer loyalty is tightly woven into Brand, which is made up of the emotion that you create with your customers

What makes customers loyal?

  •  Loyalty is built around emotions and emotions come from the customer experience
  •  The way that you interact with your customer (operating system) is what creates positive or negative emotions.
  •  Repeat customers are a result of your team members creating an emotional bond with the customer through the delivery of your product or service.
  •  Brand standards should focus on creating the emotions that make customers want to talk about their experience with their sphere of influence and go back.
  •  The Operations Manual is in place to create customer loyalty.
  •  To understand what creates positive or negative emotions in a customer, we need to understand the customer journey.
  •  The customer journey is literally every interaction that a potential customer has with you before, during, and after doing business with you
  •  Visible versus invisible standards – both affect the customer and loyalty. Invisible standards are those not customer facing, like ordering a sufficient amount of material to deliver the product.
  •  The issue with system standards is that there isn’t enough forceful compliance when they aren’t being followed and there isn’t enough positive reinforcement when they are, and so they don’t seem important to either the franchisee or franchisor.
  •  Brand icons are as important to customer loyalty as brand standards. Brand icons are the aspects of your business that you are absolutely known for.
  •  Emptions are what create the brand rather than a well-known company.

How do you measure customer loyalty?

  •  Technology is how to track customer loyalty through cell phones and credit card transactions
  •  Knowledge is power. Know your customers behavior data and use that to create the emotional connection in them to make them loyal.
  •  By understanding what customers value, we can create customer loyalty
  •  Prism will segment your credit card transactions into demographics and behaviors

What do you do with customer loyalty data after you get it?

  •  Data helps you refine your message to your real customers – understanding what they value so you can deliver the value that they want, which in turn creates loyalty
  •  Don’t confuse frequency due to convenience with loyalty.

What should I be doing today as it relates to customer loyalty?

  •  Start enhancing what it is that the customer values by understanding who the customer is.
  •  Stop thinking of yourself as a franchisor and start thinking about yourself as a steward of a brand.
  •  Stop having a franchisee advisory council and start having a brand advisory council
  •  Answer three critical questions. Know who your customers are. Know what they value. Know how to enhance what they value.
  •  Know how to make their experience personal.
  •  Help the customer make a connection to your brand
  •  Select employees, don’t simply hire them.
  •  Focus on how to create a great place to work
  •  Team members should know that their job is to create an experience that makes the customer want to come back
  •  Training a team member is usually only focused on the activity, which is simply skills, knowledge, and abilities. In addition to that, you should focus on developing people’s understanding and emotional commitment to the purpose of their job, which is to get the customer to want to come back.

Books Mentioned
Love Marks
By Kevin Roberts

The Effective Executive
By Peter Drucker

By Dan Hill

Retail is Theater

Andy Erskine
Management 2000
Kit Vinson
214-736-3939 x 101

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