Baskin-Robbins’ business turnaround: transforming the brand for franchisees and customers
The local branch of global ice-cream store brand Baskin-Robbins has had a tough couple of years since its Australian franchisor Allied Brands went into receivership in 2010. Dunkin’ Brands International stepped in to manage the company, eventually entering into a JV (joint venture) with Dubai-based Galadari Brothers Group in 2013.
Baskin-Robbins franchisors had certainly been feeling Allied Brands’ financial difficulties; with compromised supply, service and marketing operations for their businesses, they were generally feeling disengaged. Despite being one of this country’s earliest QSRs (quick service restaurants) entering the local market 25 years ago, Baskin-Robbins had lost its brand affinity with Australian consumers.
Six months into the JV occurring, Baskin-Robbins recruited David Jordan to the role of Australian General Manager, an experienced franchise manager with a strong understanding of brand. The extensive business turnaround he is leading has led to, among other achievements, the successful opening of 14 stores last year… and the company is set to quickly expand further, all the while focusing on ensuring sustainability of the business.
The company also won ‘best brand transformation’ at the QSR Media Awards this year.
In this interview with Michelle Herbison, Jordan describes how focusing on listening to franchisors’ needs, he has successfully built a three-year strategy, refreshed the brand experience for both franchisors and customers and boosted the number of franchisors claiming pride in being a part of the brand from 40% to 93%.
Marketing: You came on board in February of last year. What insight can you give me into the state of the business at that point?
David Jordan: With any JV or with any business that has had a long period of, I won’t say instability, but our franchise partners were probably challenged and that’s the feedback they’ve given us with regards to their expectations of support. Hence when the JV occurred it came at the right time for our franchise partners. I think the brand had been stagnating for quite some time within the marketplace without clear direction and so that was a perfect opportunity for us as a JV company to be able to stop and then start the brand transformation process again and rebuild the brand from the ground up.
M: Where was the brand sitting from the customer’s point of view? What was the public’s perception?
DJ: Prior to joining the brand I’d only been to Baskins once as a guest or as a consumer so I didn’t have a brand affinity; there was no real brand equity or loyalty that I’d established. I saw Baskins probably in a very similar light to many Australians, which was more of a brand for convenience – if I feel like an ice-cream or dessert and near to Baskins, then there’s an association of product with brand and it was an option for me to take. In terms of an in-store guest experience, in the first month in my role I visited over 30 of our stores, which is more than 30% of our network, and I was unknown to the majority of our franchise partners and in particular to all of our team members in our stores, so it was a perfect window of opportunity for me to really look at our guest experience from our customers’ eyes. And the guest experience was exactly as you would expect from an organisation that had limited engagement, probably I would say disengaged, franchise partner community. There were clearly no operational initiatives or training initiatives that had occurred with any robust nature, and the culture within the organisation was very systemic, and it gave me the guest experience that I would anticipate reflects the same culture. That’s not a negative on our franchise partners, I think that’s an outcome of what we as a brand had allowed the engagement levels and the culture to be.
M: And I imagine each of the stores would have had their own disparate ways of doing things as well if there was not so much engagement from the top?
DJ: Definitely, I would suggest that there was at that time around 70 stores nationally and I would absolutely agree with you and suggest that most of those stores would have small components, brand standards or system ways of operations that need to be conducted, many small areas of the business were being done according to the franchise partners’ perceptions or thoughts, and that’s from a lack of top-down leadership.
M: So talk me through some of the changes.
DJ: The first thought process I had coming into this role was regardless of the fact that it’d been established for 25 years within the marketplace and a JV had been in place for more than six months, it was really important that I came on board and viewed it as a startup business. Second to that was we had to stop and ask the appropriate questions and listen. The first real critical juncture for us as a business turnaround strategy was to undertake a meeting with all of our franchise partners across the country, we had four of them, and it was really important for us to not deliver any messages other than ‘I’m there to listen’ and ‘I couldn’t control the past’ and ‘I can’t empathise enough with what may or may not have occurred’ but what we had to do was move forward together, and the only way we were going to do that was to build an alignment with our strategies.
For a long time our franchise partners had told us they felt that they didn’t have an ability to influence strategy, so that was really important for us to take a step back. Through those meetings that we held nationally it really gave us a platform to not only learn more about the business from a different perspective but also more importantly to be able to understand the opportunities our franchise partners saw for us as a brand.
Then by doing that we created a three-year business plan. Our franchise partners have had significant input and ability to influence the outcome of that, and that’s created engagement and buy-in, and it’s ensured that we’ve started to build credit 18 months ago. We didn’t have a lot of credit in the credit bank and it was very very difficult to learn because through a long time of broken promises and challenging situations, we had to ensure that everything we did was by over-delivering and under promising.
From stopping and listening we were able to generate a list of over 15 pages of amazing initiatives our franchise partners have identified. Some of those initiatives of course were already identified by the leadership team here, and it was great to see the synergies and the alignment between their thoughts and ours.
M: Can you tell me some of the specifics of some of the big changes that you’ve made both internally and also to improve the customer experience in-store as well?
DJ: I’ll break it into a couple of areas for you. Internally, we had to build systems; a framework to work within and for myself as a leader it was very much about giving my team an ability to have freedom within that framework, to work autonomously. It was about getting the right people for the right roles, and then with any change management process or business transformation process, sometimes that’s a challenging position to be faced with. But we had to make the right decisions for the business, and we did that.
Then we had to start to build values and beliefs within our organisation. Previously it was quite a siloed organisation so we had to ensure ongoing communication was in place. We set up some drivers that we call our communication style of how we’d like to communicate with individuals and how we’d like to be communicated to, and then in turn, what that did was enable us to start to build a basis for what we thought our culture should be as a business.
Probably one of the most important things we did as an internal process was to create a ‘why’ statement for us, which forms the basis of everything we do as a brand now. It’s not a mission statement; it’s not ‘to increase profitability for our shareholders’. It’s at the core heart of everything we do which is ‘to make people happy’ by creating amazing memories and unforgettable experiences. We just happen to sell the world’s best ice-cream. Every team member that works in our business knows that.
Then for our franchise partners we had to really make sure that our focus was on building knowledge but also ensuring we understand their business models effectively and so we implemented an enormous amount of systems. The core one called Project 31 initially was just designed about creating a good guest experience aesthetically in-stores; a great booklet with pictures and a how-to about best practice, but then that really morphed into a ‘Serve Me 31’ which was about the five steps to guest service and creating a great guest experience, and then we’ve morphed it into ‘Train Me 31’ which is about a one-minute-31-second training videos. We have a lot of millennials working in our business model, and their attention span is well-publicised, so for us it was so important to be able to give our franchise partners better tools. We’ve now launched a whole video series, which is one minute 31 per video, and the idea is that a team-member can watch it at the beginning of their shift. From the moment a guest exits their vehicle, until the moment they leave us, we have a project that is in place to try to build the best guest experience possible. What they see, how they’re greeted, what they taste and how they leave us.
Then to continue the education process we introduced monthly webinars with guest speakers on a variety of topics for franchise partners enhance their skills in their business. From there we’ve created a common drive, which has got over 500 files such as template information or any documentation such as LSM (local store marketing) tools where previously there was nothing.
Then once we had the basics in place with regard to knowledge and operations, it was really about getting down into every business model, and building within the business plan a 30-60-90 day business plan. We’ve introduced an online LSM portal, so our franchise partners can now hop online and pick a category, and within that category there can be upwards of 50 to 60 different LSM tools that they can download and use for themselves in-store, whether it be fliers or promotional materials or anything else that other franchise partners have done.
We have another initiative called ‘Benchmark 31’ which is every two months we share best practice stories, effectively a case study, of five stores from franchise partners that have implemented a low-cost initiative that can be implemented by another franchise partner in a how-to guide. We’re really trying to ensure that again we share the learnings, we share the experiences and the successes, so that franchise partners can grab something they engage with and there’s a how-to step process to be able to implement.
Then the final stage was changing our stores, and we’ve really had to work hard. Our stores were very clinical by nature and the market in Australia is very authentic and people are looking for value and experience. Our new store designs from the last couple of years, which we received from America, were slightly clinical, and very good, but just a little cold, so we’ve really worked hard at changing that to try to bring in more community-based material – we’ve got community walls; we’ve redesigned our cake section; we have iPad technology for our cakes instead of booklets; we’ve introduced kid zones into our stores; we’ve also introduced topping stations, which allow you to have a variety of add-ons to your ice-cream.
Probably the gauge for our success was that from our franchise partners survey, 93% of our franchise partners advise us they enjoy being part of the brand.
M: Did you do a survey similar to that prior to the changes?
DJ: Just before I commenced in the role a survey was done, and we did another survey 12 months after that. There was an enormous improvement across engagement levels in every single area of the survey. 93% enjoy being part of the brand versus less than 40% previously. Our franchise partners are our core stakeholder, and so we’ve still got 7% to get to, and that’s our goal, is we need to ensure all of our stakeholders are happy and really excited by what we’re doing as a brand. We feel like we’ve made a lot of progress, but at the same time, we’re only just at the beginning of this journey.
M: So what’s the strategy moving forward? You said you had a three-year plan, which you’d be in the middle of. What are the goals for the near future?
DJ: I think the most exciting part for us is we’ve really just built the platform over the past 15 months and now we’ve got some amazing initiatives that we’re really excited about launching. We’ve got a range of guest experience initiatives we’re launching, more training initiatives, more franchise partner engagement initiatives to really try to ensure that we give our teams in-store and our franchise partners as much support and knowledge as we can to enhance the guest experience. Leading into Q1 and Q2 next year, we’ve got a new phone app loyalty system that we’ll be launching, that will be really exciting for our brand.
M: Will that be a consistent app across all stores?
DJ: Correct, it will absolutely roll out nationally. In addition to that we’re also rolling out nationally in Q2 an online cake ordering platform. Guests will be able to hop online, design a cake or view a cake, order it, pay for it, and choose a store, and then collect it. We’ve seen some amazing results in America with our partnership there and what they’ve been able to achieve. They’ve had just on 100% growth in that category in launching within 12 months.
And then internally for our franchise partners we’ve got a variety of incentive programs as well to be able to help them drive ticket value in-store and also drive guest satisfaction. We’ll be giving them credits for the online portal that we have to be able to go and spent on LSM initiatives.
Then we’ve got some really exciting menu innovations, product innovations, and some further additional design changes for our stores. All in all the next 15 months is looking very exciting.
M: You mentioned America; how much are you looking to America for ideas or are you trying to do things in the way that works for Australia?
DJ: It’s a great question. We’re very fortunate; we have almost 7500 stores worldwide now, and we’ve got some amazing innovators within the marketplace. Korea has absolutely by far beyond any other country the best cake ranges and some of the most amazing flavour ranges of ice-cream and their focus on guest service is second to none. The United States is a market that is tried and tested, and is probably more similar to our demographic. We do everything we can to take the learnings, the successes and the failures from all of our partners, and that’s the beauty of being in such an international brand. But at the same time we have full support to ensure that whatever we do within the marketplace is tailor-made to the Australian market. What’s also really exciting is we have the ability to adjust and to adapt and be as specific to our market needs and conditions as we need to be, but knowing that we still have the full support and leverage of an international brand behind us.
M: Interesting. Well it sounds like you’re doing pretty well and lots of exciting things to come in the future – good luck with it.
DJ: Thank you very much. Is is really exciting – I go back to the adage that’s really simple: as long as you build a great team and create a strategy that everybody can engage with, I think it really gives you a good platform for every chance of success.