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Franchisees share—and profit

How do you share best practices across a chain and cut the need for management to be a problem solver? Get franchisees to share ideas in a secure, Web-based intranet community. Know many owners who'd gladly post their monthly P&L on the Web for peer review? Didn't think so. But at Wing Zone that's exactly what 90 percent of the chain's 75-plus franchisees do in the company's online "Sharing Community." It's part of a company intranet where franchisees exchange ideas and learn of how their business is doing by comparing their P&L with their peers'.

Know many restaurant owners who'd gladly post their monthly P&L on the Web for peer review? Didn't think so. But at Wing Zone, an Atlanta-based takeout and delivery chain, that's exactly what 90 percent of the chain's 75-plus franchisees do in the company's online "Sharing Community."

It's part of Wing Zone's company intranet, where franchisees exchange ideas and learn of how their business is doing by comparing their P&L with their peers'.

Stan Friedman, executive vice president, says the power of the Sharing Community has to do with psychology. Analogous in some ways to teenagers, he says, franchisees often listen more willingly to their peers than to management. It also enables franchisees to tap into the intellectual capital and experience of veteran Wing Zone operators. "We, management, no longer need to solve every problem," Friedman says.

Friedman tells the story of one operator who was having serious food cost issues. On reviewing his P&L, Wing Zone management said theft was clearly indicated. "But the guy got defensive, drew a line in the sand and insisted that his crew would not steal. [We] suggested he log into the Sharing Community, look at P&Ls posted and call up the guy with the lowest food-cost gap. That operator talked him through some scenarios ... and made him recognize exactly how his employees were, indeed, stealing from him. Coming from an experienced peer, he accepted it and took steps to solve the problem."

Another important benefit of the Sharing Community is the competition it fosters. "Seeing everyone's numbers posted is a great motivator. It allows them to benchmark themselves against the company's best operators," says Friedman. "We give out awards once a year at our national conference, and the award levels are named for our wing sauce levels—mild, hot, hotter and nuclear. Everyone wants to hit the nuclear level, and the [intranet] helps them get there."

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