Betsy Hamm, the Chief Executive Officer at Duck Donuts, joins us in today’s episode.
Betsy worked at Hershey Entertainment and Resorts for 15 years in various marketing roles. She came to Duck Donuts to build their marketing team in Mechanicsburg, PA, before being promoted to the position of Chief Operating Officer. Eventually, Betsy became the CEO of the company.
Betsy also outlines how Duck Donuts became one of the most famous donut shops in the United States by combining unique, superior quality products with exceptional customer service.
Duck Donuts hit 100 locations in February 2021 and is looking to accelerate growth by opening forty new locations next year. Betsy describes the franchising process, and what the company does to develop tools, expertise, training, and constant support for the franchisee.
Ken: Welcome to the Physical Product Movement, a podcast by Fiddle, we share stories of the world’s most ambitious and exciting physical product brands to help you capitalize on the monumental change in how, why and where consumers buy. I’m your host, Ken Ojuka.
Ken: Today. I had the opportunity of talking with Betsy Hamm, CEO of Duck Donuts. We talk about how she got her start in PR and marketing and worked her way from marketing to operations, and then now to the CEO role. We talked about the growth strategy behind franchising your business, and why it’s a huge opportunity. We also talk about what it takes to get a new location off the ground and tips on succeeding as a franchisee. Duck Donuts just hit the 100 store milestone. And in 2022 is looking to open up 40 new locations. They are growing fast and picking up momentum. This is a great interview on how to grow a brand, how to find and maintain healthy partnerships, and then also how to build business processes into your business so that customers have a consistently great experience. I think you’ll enjoy this interview.
Ken: All right. Good morning, Betsy. Thank you for joining me on the podcast today. How are you?
Betsy: Good. Thank you so much for having.
Ken: So, where are you calling in from?
Betsy: I am calling from Harrison, Pennsylvania.
Ken: Okay, great. I love Pennsylvania. I spent a couple of years out there, myself.
Ken: I was in the Philadelphia area.
Betsy: Not too far from here.
Ken: Yeah. So you’ve got the beautiful weather going on right now with the trees turning and, you know, just the, I guess the world-renowned, um, you know, the beauty of the forest and the fall and all that.
Betsy: Yes, it was to get into a little fall. I’m actually sitting out back and the trees are starting to turn.
Betsy: So sometimes it makes me a little sad that summer’s over, but it falls a great time to be in Pennsylvania for sure.
Ken: Yeah. Yeah. Love it. Well, um, we’re going to get into your background and then we’re also going to hear about Duck donuts, but, you know, before we get there, why don’t we start with a quote?
Ken: Is there, is there a quote that, you know, is impactful to you or meaningful to you?
Betsy: Yes. So, you know, I’m a big fan of posting and I get emails that have great quotes, just to kind of remind you of different items throughout the days or weeks. Um, but one that has been really relevant to me, I’d say probably like the last year or two, just given everything that has been going on professionally is from Tony Robbins.
Betsy: And it’s that being afraid of what could go wrong and start being excited of what could go right.
Betsy: Well, I’ve been, there’s been a lot of change, obviously, professionally, which we’ll talk about, of course, and even just of course in the world, um, the last year or two. So it’s really easy. I think to start questioning, you know, what am I doing? Is this the right thing? You know this, cause I can do this wrong and this can happen and this can be right.
Betsy: Um, and you start to doubt. So I think it’s really easy to do that. Um, and worry about all the things that maybe won’t work out, um, versus thinking about wait. Okay. There’s a lot of great opportunities . There’s change on the horizon and this could be really great.
Ken: Okay. Yeah, I like it. I like it. It’s definitely relevant in today’s world and just even just more globally what’s going on.
Ken: Right. Um, we can focus on everything that’s going wrong in the world. We can do the doom scrolling, I guess. That’s my new favorite term, you know, and focusing on everything that’s going bad. But if we look for those opportunities, I think we’ll definitely. Um, yeah, so tell us just a little bit about yourself.
Ken: You know, it looks like you, you worked at, um, at Hershey entertainment and resorts. And so I want to hear a little bit about that, but maybe even start before then, you know, where’d you go to school, where are you from? Sure.
Betsy: Um, so I spent my whole entire life in Pennsylvania. So I grew up in New York, Pennsylvania, um, went to Shippensburg university as a communications journalism major, um, wanted to do something PR actually was where my head was at in the beginning.
Betsy: Um, but ended up having an internship at Hershey and I came in resorts and marketing and realized that I. The marketing world. Um, so ended up with my first, well, actually my second job, I worked at a media agency right out of college. Um, but then I worked at Hershey entertainment and resorts for 15 years and various marketing roles.
Betsy: So, um, my job in all those roles was really to drive people to the town of Hershey, um, which is. They host arts and are home to Hershey park, which is an amusement park, a chocolate spa resort. Um, also did some marketing for the concert series that we would have during the summer, the Hershey bears, AFL hockey team.
Betsy: So, um, just various reasons to come to Hershey, was really my job. So. And like I said, 15 years of my career there and those various marketing roles, and obviously it’s an amazing brand. Um, certainly world renowned from a Hershey perspective. And of course, because of the target piece of that, and, you know, had a great job and loves my team and love the brand, but was always kind of keeping an eye out for what could be.
Betsy: And, one of my friends had said, Hey, you know, Duck donuts is opening up corporate headquarters in the Harrisburg area, looking for someone to come in and build their marketing team. You know, would you be interested in meeting with them? And I had never even heard of Duck donuts at the time. Um, so you know, I did some quick research and found out that people who went to the outer banks, which is in North Carolina, um, who go vacation there knew what Duck donuts were.
Betsy: And I found that my friends who go there loved it, Cult-like following, um, of these warm made to order donuts that at the time were really only available in the outer banks. So I met with the founder and CEO and realized, wow, okay, this is a great product. And he had this great vision of making this a household name and being able to provide.
Betsy: We’re made delicious, warm, and made to order donuts, um, throughout the country. So, um, it was a marketer’s dream of course, to take a brand that really needed to build a foundation of, you know, kind of updating the logo and what’s the brand strategy and creating a voice. And it’s just literally starting from scratch.
Betsy: Um, To Duck donuts. And that was five years ago. I’ve been with ducks on it for five years. Um, build out the marketing team the first year and a half. And then, Russ who is the founder. And CEO’s that I think need to oversee operations as well. You know, I’d like to promote you to see. Of course for a marketing person to oversee operations, it makes a lot of people Twitch.
Betsy: We all think very differently,
Ken: A little bit about, you know, um, were there any particular skills that he saw in you that made him think that you could do a good job at that? And obviously you have, and you’ve advanced since
Betsy: then? Yes, I think it was the, you know, growing up in the Hershey culture, we worked very collaboratively with operations, you know, marketing, wasn’t able to be in a silo.
Betsy: So I had the ability to think big picture, be able to connect. Understand where operations, you know, do have concerns and may get caught up in being a little black and white or in execution mode. So I understood that thought process. Um, but I think being, having an ability to be able to look at the big picture and understand where we’re trying to go and help the operations get there as well, um, was where his head was at, which worked out.
Betsy: So it was, you know, a good move for me. Um, so yeah, so did that job for about three years. And then, um, just in April Russ decided that he had taken the company, you know, as far as he could essentially on his own. So we had started the process of looking for, um, some, some capital infusion essentially, and somebody who had that expertise of franchising and really scaling a brand.
Betsy: Um, so we ended up bringing in a partner. Spraying to, um, own majority of the company now. And part of that deal is as Russ wanted to step back as CEO. So he is still on the board, you know, obviously still involved. Um, but at that time then, um, I was named CEO just six months ago. So it’s been quite the roller coaster ride.
Ken: Congratulations. You’re obviously doing something, right. So you mentioned that, you know, I want to dig into the brand a little bit, you know, and so obviously there’s a lot of donut shops. You know, all over the United States, all over the world, you know? Why do you think that Duck is, you know, so famous and kind of has this following, I mean, cult-like is probably the way to describe it.
Ken: Duck donuts, love Duck donuts, you know,
Betsy: What we really strive for is delivering a superior product with exceptional customer service. And when you walk in through a Duck donuts, there aren’t any donuts cases, um, everything is made to order. So you’d go up to the cash register if you’re in the store and, um, everything is a vanilla cake donut.
Betsy: So you choose your coding or toppings and drizzles. That means you could order, um, a vanilla. I saw Oreos or maybe maple with bacon. Um, and we customize it. And the great part is you get to watch the entire process. So you literally see your donuts in the fryer being dropped and then seeing them, tops as well.
Betsy: So everything happens in the front of the house, and then they hand you a box of warm donuts with a smile on their face. Um, so I think that having that experience and having that customer service is really what differentiates us. The product is amazing. And, you know, I think at the end of the day, I don’t know if Ross thought about this when he created the brand, what 13 years ago.
Betsy: Um, but I think the fact that we are duct on it is certainly different. I think it captures people’s attention the first time they hear about it, but like, That’s like, why are you called Dakotans? Do you eat duck fat? You know, what’s the deal. And, and of course it’s really because of one of the first locations opened in North Carolina.
Betsy: So that’s how I ended up with the name. So it ended up being something that is a little clever and different, um, that I think helps to kind of get people’s attention. And then once they’re in the store or once they even have a donut, maybe out at an event, um, it really is amazing.
Ken: Yeah. Yeah. Um, so obviously the investment the owner made to order is substantial.
Ken: Right? I think, you know, there’s an argument to be made. if you just, you know, you had pre-made donuts, you know, you could do it cheaper, you could serve more people, you know, why do you think that element of it is, is really important?
Betsy: Um, I think the fact that it’s fresh is number one, you know, you’re in the, you’re not going to walk in and short, maybe very rarely, especially nowadays we may be out of Oreo or something because of supply chain.
Betsy: But, um, you know, sometimes you walk into a bakery or another donut shop and they’re out of your favorite donuts, but that very rarely happens with us. I think it’s being able to deliver on the customer. Um, as well as with a fresh product, um, that, you know, was literally just made and the personalization piece of it, you know, people love to be able to make choices.
Betsy: So the fact that, you know, if you want to get creative and add a couple of different toppings, um, you’re really able to customize that doughnut and to make it anything that you want. Hmm.
Ken: Um, yeah. Yeah. I think that personalization aspect is amazing. Do you think that there are others, you know, and I’m sure there are, have you thought of any other businesses or any other sort of retail type experiences that could be transformed by doing something similar?
Betsy: Hmm, that’s a good question. I mean, of course I kind of compare us to, um, like some of the Brita shops, so, you know, take it like it’s polite, you get to choose how you build your burrito. Um, so I do think even when you look at the sandwich shops, I mean, sandwich shops are like during the Mexican. So well right now, and I think it does go back to that fact of the simplification of, you know, getting exactly what you want, um, and being able to build it from scratch.
Betsy: So that is an interesting question. Are there other brands out there that maybe now aren’t, um, that personalized or customized that could benefit from being that great.
Ken: Right. Um, and I’m sure there are trade-offs, you know, obviously do you mind maybe elaborating a little bit on the trade offs of making that decision of being so personalized?
Betsy: Yeah, absolutely. I mean, it’s timing and it’s this decision. So, um, you know, this is the first time you’ve walked into a Duck donuts. It can be very overwhelming because you can fill them. Um, we have gotten better with our point of sale information by having, um, some suggestions. So we will show you some dozen donuts that are already built.
Betsy: The point and say, oh yeah, that looks good. And that looks good. And that looks good. Um, we also offer seasonal assortments as well. So there’s a service that changes by the season. So of course now we’re in fall. So at the pumpkin donuts and apple donuts, Um, but it can be overwhelming for customers.
Betsy: It’s the first time that they’re in there. And then the other piece of that of course, is it just flows. It slows it down. So, um, we of course have continued to see our online sales build, especially over the last year and a half. Um, so having that experience online is also a little challenging for us when you’re building a donut, because the course is very visual.
Betsy: And right now our experience. Yeah, pick the donut out of the drizzle or add the coding as the juggle, any pathing. Um, so it does take a little bit longer and isn’t always the best user experience for sure. So I think that the one negative side of it is the ability to be as quick as we’d like to be.
Betsy: I mean, ideally it shouldn’t take. More than I would say five minutes for once you order for someone to hand you your box of Donuts. Um, but you know, there’s a couple of process steps into that from ordering from the doughnut being drafted and fried, and then of course the toppings and hand it to them.
Betsy: So, um, it is more of a cumbersome process versus if you walked in and we already had the donut sitting there, you know, case for you just to pick one and to grab it.
Ken: Sure. Sure. And you guys offer some, you know, um, pretty unique flavors. Um, there are pre-made and suggestions, like you said, um, you know, like a, like a bacon in the sun or a blueberry cake, you know what you don’t typically think of it as a donut, but yeah.
Ken: I guess, first of all, what’s your favorite or do you have a unique combination that you particularly like?
Betsy: Do and you know what, it’s actually the one that’s available right now. So it’s the apple pie doughnut. So it’s that warm vanilla cake donut with an apple pie filling that sits in the middle and you can even get fancy and add some truth to that or some vanilla drizzle.
Betsy: Um, but that’s my favorite doughnut. That’s only available for a limited time. Um, but that’s my go-to. So when it’s this time of year, I’m always excited to see that on the menu.
Ken: So I’m not a huge pumpkin guy, but apple pie. I have a major weakness, so that’s,
Betsy: And then if you want to get really fancy, you can get that with an ice cream sundae.
Betsy: And we do donuts. I paid a little scoop of ice cream on top of that, and it’s like, you know, apple pie, all the mode.
Ken: Wow. Well, um, yeah, so, so I guess let’s, um, let’s talk just a little bit about the growth of the company, right? So you guys were. We required it in April. Is that what happened? Okay. And so why don’t you tell the listeners a little bit about, you know, what led up to that and what that means for Dunk Donuts?
Betsy: Sure. So, as I mentioned, you know, Russ as being the founder and the entrepreneur who really started this knew that he could only take it so far. So we hit a hundred locations in February, which is a really great milestone. And actually we’ve learned that only a milestone at 16% of franchise brands make it to, um, so we’re really excited to have that happen.
Betsy: Um, so the best of intentions of bringing in a private equity partner with somebody, of course, from a capital standpoint, but then also, um, an expertise standpoint, For working with somebody who’s been there and done that and knew what sort of tools and resources we needed to scale. Um, so six months into the relationship, obviously we’re figuring out how we move forward together, but they have been awesome in terms of the resources and expertise standpoint.
Betsy: I’m very connected within the franchise industry. Um, one of the partners was a CEO for franchise brands, so he understands. You know, franchising is different, the different worlds as being a franchisor, it’s different with franchisees. Um, so him understanding that and being able to really help us, um, you know, make some of those decisions or realize maybe we’re missing some resources.
Betsy: Um, they’re able to bring that to the table and then have those conversations, um, to help us Crow, because while we’ve been opening about 20 locations a year on average, that shovel opens right around 20, um, we really want to accelerate growth at this point. So we’re looking to open 40. Next year. So that’s quite the jump of course, to be doubling what your output is and store opening, and that you have to be backed up into our franchise sales pipeline and how many we’re selling and where we’re selling them.
Betsy: Um, so just really focused on the growth piece of course, adding additional locations for time to get to that 300 location number here in the next three or four years. But the other piece of that is looking at our current franchisees and how to help support them better. Um, so we are very focused on growing our average unit volumes, not just, adding additional locations, but you know, what tools and resources and support do we need to give our franchisees who are small business owners, um, the pools to succeed.
Ken: Yeah. Um, so why don’t we, um, why don’t we step back just a little bit and maybe talk about how, you know, Duck Donuts, obviously wasn’t started as a franchise. You know, you have the one location, um, in North Carolina, um, you know, Why. Um, did you guys make the decision to franchise and maybe you could just give us even a, you know, franchise one-on-one, you know, why might a business like yours decide to start franchising, um, and expand in that way?
Betsy: So when Russ started Duck Donuts and the outer banks in 2007, it was really on a whim. He was an entrepreneur at heart, and he actually had a healthcare business that was doing very well and really had no intense sense of, you know, becoming a franchise company down the road. Um, so he opened the first two locations, because he saw a need.
Betsy: There was, you know, there wasn’t warm there wasn’t Donuts actually at the time in the outer bank. So he just. The need of being able to deliver Donuts that he remembered having at the boardwalk, um, when he was growing up at the beach. Um, so that’s how it started. And it started with two locations and, you know, the first couple of years they struggled and, you know, he said at one point it was sort of like, okay, this is go or no-go time.
Betsy: You know, if it doesn’t start to pick up. Third year, we’re going to have to think about, um, shutting down and suddenly the third year is where it really took off, you know, a lot of the same people come back to the outer banks year after year. So it really was able to build that loyalty. Um, so those two locations ended up doing really well and they ended up opening two additional locations in the outer banks and constantly people were asking them to bring.
Betsy: To their hometown, you know, they were disappointed that they could only get these amazing Donuts once a year. Um, so they had tried like flash freezing Donuts and sending them, you know, shipping them to people, in the off season, which I can’t imagine how that was, but they did it, that was before my time.
Betsy: Um, but you know, just, it was the constant noise of people saying, wow, you really should, you should franchise this, or you should have. Doors or whatever. And of course, as an entrepreneur, when you’re looking at trying to build up a brand, if you’re going to do corporate stories, it’s going to take a lot more of your own money and time, um, to build that out and, you know, not knowing the market outside of where you are and in this and that, there’s a lot of pieces that come into it.
Betsy: They had made the decision to try franchising, um, which they had received a lot of inquiries of people asking if they could, um, before they were even doing it. So, you know, then they went back to that list and ended up opening the first franchise location in Williamsburg, Virginia in 2013. Um, so I can’t imagine the work that went into, even from a legal perspective, that everything that needs to be done from franchising, but, you know, as the franchise or the benefit is we have this ability to build.
Betsy: He’ll buy our brands, quicker than, you know, we were doing on our own with the corporate stores. And, you know, we have, um, 105 locations in the U S I’d say about 75 franchisees. Um, but they know their market, they know quirks. And what makes those Donuts? I think also unique is the fact that our franchisees who are involved in their local community see the most success.
Betsy: So, you know, they’re the ones that they might not be making Donuts every day, but, you know, Cool, their churches, their businesses, um, fundraisers and local community members are going in. They can recognize the franchisee. They know that they’re the owner. Um, just having that ability to have that tied to the local community and really put a face, um, with the store, I think has been very important and why we have seen so much success with our franchise company.
Ken: So, um, you know, for a franchise, you know, what’s the typical model, you know, like, um, you know, let’s say that, that I wanted to open up Duck Donutshere in Provo, you know, what would that relationship look like with you? How much of that would I actually own? Are there, you know, fees that you pay back to the, um, you know, to the corporate, company, you know, how does that work for people who aren’t familiar with the franchise?
Betsy: The first one, I think that’s a great idea. We need more locations and
Betsy: I think that’s a great idea. Um, but typically what you would do is you would go to our website, you fill out a quick little free application, it goes for a development team. Um, they give you a call. They try to understand, you know, where are you looking to open? Obviously we have parameters of where we want to open, of course, based on demographics and based on household income, you know, are there other Duck Donuts in that area?
Betsy: Um, so all those things go into the decision of. It’s great to open an account. Um, so that as we go through that process, you know, we’re both getting to know each other. So we, this is a partnership, it’s like a marriage. I mean, this is a long-term relationship. You’re, you’re signing a ten-year agreement.
Betsy: Um, so having a conversation of where you want to be, how you’re going to operate it. Um, we typically do a discovery day. The potential franchisee comes in person. You know, we share about what the support is that we provide. So from a franchise perspective, we provide the support of, um, real estate, helping you find a location, you know, helping you negotiate the terms with the landlord and determining what is the best location.
Betsy: We help throughout the entire construction process. Um, it’s usually done on a local level. So just making sure from a project management standpoint, everything’s getting done that needs to be done. And then of course, there’s the training. So many of our franchisees don’t have food experience or franchising experience.
Betsy: So making sure our franchisees understand the business model, um, you know, how to handle their PNL, how to handle the training, staffing, understanding cost of goods, all of the things that go into. So, um, we have what we call Duck Donuts university. So our franchisees will come to that, probably about two months before they open and there’s in-class training.
Betsy: And then there’s also in-store training where of course you have to learn how to make a donut and how to make it look beautiful. And all of those pieces that go with just operating a business. And then once a location opens, we send a training team on site to assist with the opening, making sure. Staff that frontline staff, um, is up to speed and understands how to operate in their various roles.
Betsy: Um, and then from there we still have ongoing support. So it’s not that a franchisee just opens their doors and once they’re open, we’re like ya. Um, obviously we have an invested interest you’re representing our brand, so we want to make sure all of our locations are up to brand standards. Again, making sure that it doesn’t look right and taste right.
Betsy: And customer services there, and the stores are clean and they all look the same, um, from a consistency standpoint. So, we provide ongoing support in order to help you do that from an operational perspective, as well as marketing. So we handle marketing from a national perspective and a national approach.
Betsy: Um, and it’s really on the franchisees to handle on a local level. They know their market best. They have the ability to connect with the customers in their market. But we will give them all the tools and resources in order to do that to succeed so they can download coupons and flyers. You know, we have a site where all of that information and all those marketing pieces are created.
Betsy: Um, so yeah, our goal is to make our franchisees successful. And from a financial standpoint, you know, there’s a franchise fee upfront, depending on how much the fee varies. But if they’re buying one location, There is a $40,000 franchise fee. And then there’s the build-out cost of your, of the store, which is on the franchisee.
Betsy: And that can vary, um, you know, maybe somewhere from 200,000 to 350,000, um, but paying for the build out of the store, but also of course, the equipment piece of that. So the fryers and the hood and the point of sale system and everything that goes into. And then from an ongoing perspective, um, every franchise, but some has a world T as well as a marketing fee.
Betsy: So 5% royalty and 2% goes to a marketing fund, but then of course it goes back to support the stores, from a national perspective.
Ken: Yeah. Interesting. So the type of, um, you know, entrepreneur that would be a good candidate, you know, to, to franchise a Duck Donuts. Is there, are there any characteristics that you’re looking for or is there, I guess another way to ask is there anything in particular, um, that your current franchisees.
Ken: Um, you know, maybe a profile that they fit or something that they’re looking for or the type of business they want to run, you know, who is this for? Like, who’s a good,
Betsy: Yeah, that’s a great question. So, you know, at the end of the day, it’s somebody who wants to be a small business owner, but needs the support and resources of a bigger company or, you know, someone else to help them do that.
Betsy: So, you know, you really have to have that ability to operate independently. Stay within the system. Like I said, you know, it can’t be, you know, Ken’s donuts. It has to be Duck Donuts. So making sure that it had the ability to follow the system and structure and rules is probably a fair word to use. Um, but also the ability to operate independently and own the fact that they’re responsible for driving sales and they’re responsible for making sure that their staff is, um, you know, providing a quality product.
Betsy: Um, so those are some of the pieces that we sort of look for. We do a predictive assessment. Okay. Alright, predictive index assessment, and then we’re going through the interview process. So that really measures behavior. So we do have an, um, ideal profile based off of our most successful franchisees, you know, of what we’re looking for, um, which is very helpful.
Betsy: And that kind of helps us make the decision because our franchisee. Various backgrounds. I mean, we have, we might have accountants and teachers and salespeople and, um, someone who worked in marketing or whatever it is. So there’s varying backgrounds of franchisees that have been in our system. Um, but at the end of the day, I think anyone can be successful if they have the right drive and understand how to benefit from the tools and the resources of our franchise system.
Betsy: And of course, capital needed some capital to be able to do this as well.
Ken: Yeah, it seems like you, you get kind of benefits of both worlds. You get the support of a bigger business, a bigger brand, you know, nationwide brand. Um, you get to run it independently, locally. Um, and then also just the benefit of like a proven system and a proven product, you know?
Betsy: Yeah, it’s proven. And you know, there’s, of course there’s been mistakes that have been made for the year. So said if I already learn those mistakes, um, you know, it takes away that learning curve for a franchisee. And I always tell our franchisees, we have 75 other people doing exactly what you’re doing.
Betsy: So the willingness and the ability for our franchisees to be connected within their own system. I think it’s huge that, you know, if they have a question of, you know, how do you do weddings or how do you do portraits? You know, what’s the best way to keep my team engaged or whatever it is. Um, you know, there’s 75 other franchisees that they can pick up the phone and say, Hey, what’s best for you.
Betsy: You know, being able to share those best practices within the system, I think, is a huge benefit of being part of a franchise company.
Ken: And do you have any of your franchisees, um, you know, where you can, um, maybe highlight, you know, an area or, you know, somebody that’s doing particularly well, you know, and why you think that might be.
Betsy: Yes, absolutely. So we do try to highlight best practices. Um, from franchisees, everyone seems to have a little niche, you know, maybe it’s someone who does really well with weddings, um, or someone who does really well with fundraising. Cool. So we do highlight that stuff across the system. We have a weekly newsletter that goes out, um, or, you know, I was visiting with franchisees earlier this summer.
Betsy: And, the one franchisee in Florida was talking about how she wanted to do more with schools. I’m like, okay, great. And we know that we can, and like, let me connect you with this franchisee in North Carolina, you know, she can tell you what she’s been doing with school. So just being able to have that ability to sort of connect the dots ,and connect them with each other when we know what’s something that they’re focused on is super important.
Ken: Yeah. That’s interesting. So from your perspective, you know, as a CEO, how do you go about finding, you know, like what does the marketing and sales look like when you’re trying to find, you know, potential franchisees?
Betsy: So, okay. Good question. And the funny part is up until this year, we have. Been proactive in franchise sales.
Betsy: So every franchise that we have sold, it’s been because somebody went to a location, had a great experience and one is opening up Duck Donuts in their town. So, um, it’s amazing that we got to a hundred locations by being reactive to just what was coming in. So we actually, now this year, have started to spend a little bit of, um, advertising dollars to target franchisees.
Betsy: Um, and we actually just hired a new partner. Who’s gonna have it? Generate additional leads. So we’re finalizing that plan. A lot of it’s going to be debt coming down to, you know, sort of what we talked about. Like why do I want to be a franchise you know, what’s the benefit, um, who are we targeting?
Betsy: What are we saying to them? Um, and of course, most of that’s going to be done through digital advertising. Typically trade shows have been an area of opportunity for franchising. Of course, it’s been a little rough, the last. But hopefully I’ve traced those come back in, um, in 2020 to being able to attend those and have conversations with those people in person.
Betsy: And you know, now that we’ve heard that a hundred locations, mark, um, I think that we’ll have the ability to also go after that more sophisticated franchisee. By that I need somebody who already has other franchise brands. So, um, that’s something that we’re focused on in 2022. There’s a lot of groups or organizations who may own, you know, 10 or 15 locations, or there’s some who own hundreds of locations, but you know, some of the ones that are a little bit smaller who owned another brand, this has made a great second brand for them.
Betsy: That would be complementary to what they’re already doing. So that’ll be a focus for us moving forward.
Ken: Got it. Yeah. Let’s, let’s double click a little bit on, you know, the way COVID, um, has affected the business, you know? So, um, you know, obviously you guys are retail. You go there to pick up the Donuts, you know, how has, how have you guys weathered COVID and has it, you know, for a lot of businesses, it’s actually been good for them, you know?
Ken: And then maybe some broader changes in the industry that you see
Betsy: coming. Sure. So, you know, I think like everyone, the first couple months of, 20, 20 we’re rough, when COVID hits us, because you know, I, a lot of times. Product that people pick up when they’re on their way to somewhere else, grocery store, whatever.
Betsy: A lot of our traffic was morning traffic. So we call them our office. Here the people will come in and grab a dozen Donuts to take to the office. Obviously people aren’t going to the office. So, um, the first part, um, of really the middle part of like March through June, what was certainly a rough time for us, but we really saw our franchisees rally and we started talking about sprinkling happiness.
Betsy: Well, our local communities and that, you know, have to give the franchisees total credit for, because they started doing it on their own, you know, dropping Donuts off at frontline workers, essential workers, you know, firefighters, please, um, grocery stores, wherever, um, people were still working. Um, and that really.
Betsy: So we started to see our sales rebound by the end of the summer. Um, just because yes, things were really rough, but let’s be honest. People want a little happiness and even going, it makes people happy. Um, so started this year, sales improved through, um, the last half of 2020. Now that we’re in 2021. Um, our sales have been great.
Betsy: The good news is, we’re up same store sales over 2019 numbers. It was hard to always compare it to 40-20, but seeing our source sales up over 2019 has been great now. I think the other great piece is that we talked a lot about franchise sales and we’re also seeing a lot of interest in franchise sales because as everybody went through.
Betsy: Crazy pains that nobody anticipated. People start to question, you know, their corporate jobs or what they’re doing, or should they be doing something differently or maybe they lost their job. So I’m seen as changing just why or, or how people are coming to us based on what’s happened the last 18 months.
Betsy: Um, so yeah, we certainly had to make a lot of the changes. Um, um, like a lot of the other restaurant quick service brands, luckily most of our. Traffic is to go orders anyway. Um, but even changing how we were doing that from, you know, curbside pickup, luckily we had just launched an app and a loyalty program right before COVID hit.
Betsy: So, you know, seeing more traffic coming in through the app, through online sales, through third-party delivery and all those things have certainly seen an increase, which I don’t think we’re going to see go away. Um, so we’ll continue to be convenient as important before COVID, um, that I think that really has accelerated the importance of making sure we.
Betsy: The best user experience from a technology standpoint, when people aren’t coming into the store and ordering, and when they’re making those orders, you know, whether it’s on their app or on our website.
Ken: Yeah. I mean, we’ve seen a lot of, um, like CPG brands, um, you know, obviously pick up their online game.
Ken: Right? Like everybody had to figure out e-commerce, um, very quickly, um, you know, so for retail, you know, I’m thinking, you know, things like curbside delivery or even drive through, you know, um, doing things like launching an app website, all of those things to make it more convenient for customers. You know, in a lot of ways, just even make it possible for them to access your product, your services, you know?
Ken: Interesting. All right. So, you know, let’s talk just a little bit about, um, going forward, right? We’re at the tail end of 2021, you know, you guys sound like you’ve had a pretty successful year. You know what’s, what’s next for you guys? What are you, um, you know, what are you looking forward to?
Betsy: Um, really the last, I would say two or three months, we’ve been focused on setting ourselves up for this, um, growth. So, you know, looking at our structure, looking at our people, looking at our tools, resources, partners, um, so making sure we have all those puzzle pieces, um, right, so that when we really put the pedal down next year and open 40 locations, we have the team and the resources to support.
Betsy: So, um, what got us to a hundred stores, isn’t going to get us to 200 stores. Um, so really being focused on what we do need in order to achieve that has don’t we’re focused on so that our strategic plan for 20, actually that our strategic plan for the next three years, um, you know, and of course we talked about the number of people that have opening those 300 locations, but what are all the other pieces that come into that?
Betsy: And of course that goes into the customer experience that goes into training, marketing, the brand, um, what the store of the future looks like. You know, those are probably some of the biggest. Um, that as we continue to scale, we have to make sure we are, um, at the level that we need to follow those priorities.
Ken: Well, let’s, let’s switch gears. Let’s go to the quickfire round. I’ve just got four questions for you. Um, just tell me the first thing that comes to mind and then we can, we can wrap things up. Um, what is one tool or resource that you find ?
Betsy: Um, well, especially given what I just said about the strategic planning piece right now, what’s been really important is that, um, it’s a book called traction and it’s the entrepreneur operating system and how to set up really your company.
Betsy: Um, so even though we’ve been around just to make sure that our foundation is strong, that has been my tool of 2021, for sure.
Ken: gave something and I’m sure objection is actually a common name for a book. So there’s a few different ones. Um, what is a one book or resource that you could recommend to the audience?
Betsy: Um, I have to do that and it kind of tied together. One is what got you here. Won’t get you there by Marshall Goldsmith.
Betsy: And the other one is Jim Collins.
Ken: Okay. Yeah. Um, what’s one piece of advice that you’d give your 21 year old self
Betsy: There’s. So many things. Did you say one? Um, you know, I think to Jonathan noise, I think sometimes when, especially when you’re 21, you may be worried if, if things aren’t going the way that you think they are, but, you know, I think you could possibly determine what you want to do and figure out how you’re going to get there and drown out the noise with other people.
Ken: And then last, um, who’s somebody in your field of work that maybe you look up to, or, you know, a brand or company that you watch that you’d love to take to.
Betsy: Oh, there’s so many, you know, it’s great in a franchise company that is in the franchise system. There’s so many people who are willing to talk and have great conversations. I have made a lot of friends and totally appreciate that to people who I haven’t talked to.
Betsy: I give you two answers to everything that you asked for one.
Betsy: One is because I just read the book. Um, and it’s kind of funny. It’s the Dunkin Donuts look that came out and Bob Rosenberg, he is the son of the founder of Dunkin Donuts. And I just read his book a couple of months ago and it just, it was, it’s so relevant and relatable to where we are right now. Um, so I would love to sit down and be able to pick his brain because he’s been there and done that.
Betsy: And I think that would be great. And then the other one is the CEO of. ’cause they have just had amazing growth over the last several years. And, you know, they’re, they remind me of Duck Donuts, obviously a sandwich brand, but just sort of have that kind of beachy feel, being involved in the community is really important.
Betsy: Um, so we’ll love to hear how he’s gotten to where they are with.
Ken: Nice. Alright. And conclusion. Um, what, um, you know, I guess first of all, if somebody wanted to get a hold of you, um, or connect with you or somebody was interested in a franchise, what, um, you know, what’s the best way to move forward to connect?
Betsy: But as on LinkedIn, you can certainly find me on LinkedIn. And then if you’re interested in a franchise and opportunities, visiting duckdonuts.com and those tranquilizing page, where you can get a lot more information than what I talked about, and we’ll connect you with our development team.
Ken: Awesome. And then, you know, just lastly, some parting words for, you know, other, fellow food entrepreneurs out there.
Ken: Um, you know, there are people who’ve just started either a CPG brand or a food business of some kind, um, that are just trying to try to make it. So they’re in the grind right now. What advice would you give them?
Betsy: Yeah, I would say the biggest thing is to make sure that you have a solid foundation and make sure you have the right people on your team to help you get there.
Betsy: That’s one thing that Russ was really great at early on is he knew what he was great at and he knew what he needed other people, um, to help him do and, not to get caught behind. So making sure you have the right team and resources is key to be able to grow.
Ken: Awesome. Well, Betsy, I appreciate you taking the time today.
Ken: This has been a great interview and I’m sure people are going to take a lot from this. So thank you for doing this.
Betsy: Thank you so much for having me. Ken: All right. See ya. The Physical Product Movement podcast is brought to you by Fiddle to find out more about Fiddle and how our industry leading inventory ops platform is giving modern brands and manufacturers all visibility into their inventory and operations. Visit fiddle.io, and then make sure to search for physical Product Movement and Apple Podcasts, Spotify, Google Podcasts, or anywhere else. Podcasts are found. Make sure to click Subscribe. So you don’t miss any future episodes on behalf of the team here at fiddle. Thanks for listening.