Subway Franchisee Michael Rodriguez Talks Responsibe Growth

Daniel Blaser (00:05):

Hello, and welcome to On the Clock, presented by Workstream. If you care about hiring and retaining hourly employees, you're in the right place. I'm Daniel Blaser, and today I'm clocking in with Michael Rodriguez. Michael is the owner and franchisee of 11 subway locations in Central North Carolina, eight of which were added in the last 13 months. Michael and I talk all about the challenges he's faced with such rapid growth, how culture compliments compensation, and his appointment to the subway, FAF, national Advisory Board. Enjoy. You've been with Subway according to LinkedIn for like more than 14 years, so I just wanted to ask, what do you love about Subway?

Michael Rodriguez (00:46):

I originally got into this business through my uncle. He owned three locations here in North Carolina, in Melbourne actually. And, and I was doing federal law enforcement at the time, and I was looking for a change, and sure enough he had an opportunity and actually a need for some upper management help. And so while I did not know anything about subway or business he knew that he could trust me and rely on me. And so I, I moved out here and that's really how I started. After a few years of being a GM for those three locations I realized, okay I enjoy the business. I was pretty successful in my role running his locations, and so I began looking for opportunities for myself. And this first location I had was in Pittsburgh, North Carolina, a real small little rural town in just south of Chapel Hill. And, you know, in, in that time, you know, I've gone from one now to 11. I think I'm very high on, on subways pillars, which I believe are a quality product and an affordable price, right? And it's a very healthy option. And so I think that those are, those are pillars and those are anchors for a brand that I think are, are long lasting and, and good long term.

Daniel Blaser (02:04):

You kind of mentioned you've been really busy lately with growth. Maybe summarize kind of what, what the last 18 months have has looked like as far as all that stuff goes, and then what kind of drove that growth and what motivated you to do all of this?

Michael Rodriguez (02:19):

I had one store and I was a single unit owner for seven years. At which time I bought two other locations, which is right before covid. So great timing on that. And what I had found is once Covid had kind of ended the, the labor market was significantly different, right? Everywhere, which not only made employment difficult and finding employees difficult, but everyone had the same issues. And so everything cost infinitely more. And I do believe that it was a kind of perfect storm that facilitated a lot of these long tenured franchisees to kind of decide, you know, one or two locations is, is much more difficult to afford. And so I really believe that a lot of franchises are gonna go to a numbers game where franchisees are really gonna have to acquire locations in a, in a higher amount to, to deal with these rising food costs and these gas fees and all the things that are now associated in driving cost up.

(03:30):

And when you're in the business, I'm assuming for 25, 35, 40 years, and you've got a decision, you know, do I double down on my one or two stores and try and relearn all of the things that have kind of come from COVID and and adjust, or do I sell? And a lot of these older franchisees, they were already, I think, prepared for retirement. And I think this just kind of said, you know, with the, the technology updates that are now required with regards to online ordering, your third party delivering you know, minimum wage can be whatever it is you're paying 13, 14, $15 an hour for entry level positions everywhere. And so you really have to want it if you're gonna kind of stay in and make it work, you know, and, and juggle the, the changes and the differences roll with the punches and, and some of the struggles and, and have the endurance to really push.

(04:35):

And so I have found a number of mostly one or two unit franchisees who were prepared to just say, you know, they all said enough's enough, <laugh>. And thankfully between my energy and my team that I currently have it, it has, I believe, facilitated the rapid growth, which I have experienced. It's been eight stores in 13 months. I'm actually working on two more right now. Remodeled two other locations and <laugh>, it has been a whirlwind but I do believe long term it's gonna be have been the right move, no doubt about it.

Daniel Blaser (05:19):

Would you say that your, your rapid growth has it made those hiring challenges even harder or has there been some efficiencies to be gained because of that? You know, the growth combined with the hiring challenges?

Michael Rodriguez (05:33):

My experience has been I haven't built a single store. So in 11 stores, I have acquired existing locations for all 11. And I will say what I have found was there tends to be a vacuum. So when someone new comes in and, and typically when someone is on their way out, and this has not been the case for all of the acquisitions, but, but a handful of them we had franchisees that were really just hanging on and really frustrated and not very present. And what happens then is, you know, there, there's some managers and things like that who kind of run the business that they, the way that they want. And so when a very present business owner franchisee like myself starts showing up and says, you know, we're gonna have some accountability, but my intention is never to go in and have anyone lose their job.

(06:27):

I make sure everyone knows that day one I show up and I, you know, but there will probably be some things that are gonna be different. And, and I'm a big fan of a 90 day grace period where we're just gonna figure it out and work together. Anyone who is excited about the work or the possibility of it stays right and is relieved. They like having some oversight. They like having someone help when things break. They're like knowing that someone's gonna come and buy something or have someone come in and fix it. And so it alleviates a lot of the stress that the majority of the staff I believe in these acquisitions have had. And then those few who have kind of benefited from a lack of oversight they tend to see themselves out. And, and what I would say is and encourage people who have these acquisitions to remain calm and to allow that process to kind of happen and to not hang on to people because of simply the hours they're available or the amount that they work, you really want to make sure the people that stay are ones that you want.

(07:34):

And while the first 30 or 60 or 90 days at times are, are tough you really get to see those people who are there that you didn't know about at all, that you came into this new business who really want it and really want to do something. And they kind of, you know, the cream rises to the top, as they say. And so I, I'm really try to prepare for that first 90 day kind of difficulty and allow the course of things to really kind of play out to show me right who wants it, and to also kind of see where the deficiencies were and are and, and what we can do to attack it.

Daniel Blaser (08:18):

How do you kind of figure out if specific employees are providing the service that you want them to, and that you can kind of rely on them to continue to do that?

Michael Rodriguez (08:29):

One of the adages i I use quite often is you cannot, you can't teach character reliability. And in my experience, customer service I can teach, I can give a script and, and we give everyone a script. You know, there's a greeting that you should have. If a sandwich is toasted, I call it toaster talk, and you're gonna ask a, a pointed question or two, and then you're gonna tell 'em, thank you so much, come back and see us again. If you do that, I believe that that that's a great start. But if you're trying to really go the next mile, you know it really comes down to, I believe, personifying what I want in my employees myself, which is high energy, positive attitude, conversational. And if I'm that way, I have found that I attract and retain the employees, the managers, the staff that match my energy and match my feeling for the business.

(09:36):

And I think it's important that when you find them, you keep them. And it's an incredibly competitive labor market right now. It's you know, anyone's pretty much willing to throw any amount of money at anyone else to fill a shift, and it's really hard to compete with that. And so I believe that it also just comes down to, to company culture. And again, as, as a franchisee, as a business owner, it starts with me. So a lot of franchisees who I'll talk to that have, and, and in multiple QSR spaces, right? Not solely subway, but business owners, whether it's the, the restaurant business, whether it's an office manager, a hardware store, if you're grumpy and you know, you're frustrated and you're stressed out, and that comes into the, the, the workplace, you're bringing it to your staff, you're lamenting whatever it is that is bothering you today, whether it's someone not showing up or anything like that, it really just kind of facilitates and allows the rest of the staff to, to follow suit.

(10:46):

And so, I, I really believe that, you know, leading by example is first and foremost my job. And, you know, making sure that I am an example of what I hope all of my staff are doing right from management to the 15-year-old who it's their first day, you know, at the end of the day, you can smile, be happy, ask someone how their day was and be on your way. And so yeah, I, I, I think it starts at the top. And I also am a firm believer that my management should reflect my management style. So a lot of times early on when I promote a manager, I have them, you know, everyone texts now. So when you send a text message, I ask 'em to include me on it at first so that I can see how they interact so that I can, you know, my presence just in the message itself keeps everyone calm and makes everyone think a little more before they just start typing away things like that, right? I, I want the people who are the faces of my locations to reflect me, and, and I want them to reflect that to the customer and the staff. And I think if, I think that's a great start, right? It doesn't always work. It's not going to replicate itself every single time, but I do believe, again, it's a numbers game and you're giving yourself the highest odds to be successful in that way.

Daniel Blaser (12:14):

Is there anything else that you've done or that you're planning to do to try to just retain your employees? Like you mentioned, it's super competitive right now.

Michael Rodriguez (12:24):

Again, the, the differentiator for most is how much will you pay me? And I don't care how many restaurants I have, you know, there's only so much you're gonna be able to pay. And so I have con I have and I will continue to bank on culture being the, the differentiator, I think everywhere I, I read everywhere I, I turn, I'm seeing an article that discusses toxic work cultures, you know, what matters, especially to millennials people of my age, slightly older, slightly younger, and that is to be happy where they're at. And this is a tough, tough business. I have heard horror stories since the first day I entered into a subway and started managing a subway. I have always put faith in the fact that a positive company culture where we actually care about our people will be what keeps them.

(13:30):

I have pretty good retention and I truly believe it's because I know who my employees are. I know who my staff is, I know their families. I would recognize them on the street. They would recognize me and be willing to say hello. And, you know, I, I'm, I'm very conscious of when I enter a store, if I see a face that I do not recognize and they work for me, I'll ask, what's their name? How long have they worked for us? And how's work? How's work? How are you enjoying this? What's going on? Do you have any questions for me? Is there something that I can answer for you that matters? I, I think especially with your hourly employees who are not management, for them to say they know the, the business owner of the place that they work, I think that that's different too.

(14:17):

And so I, I would encourage business owners everywhere to really be active. You know, I bring my kids in after basketball games and we eat lunch, and I'll go make a couple sandwiches and help 'em out during the rush. And, you know, it's important I think, for them to, to realize, you know, they're not just working for Subway, they're not just working for McDonald's. You're working for individuals human beings. And if you care for your people, I believe that they'll care for you to, you know, enough and an extent that 25 or 50 cents an hour isn't gonna sweep them away, right? And, and hopefully you've got good enough communication and, and you're approachable enough that when people have questions and concerns, or there is that opportunity for more money, you can have an honest conversation about, you know, what it'll take to make more and, and you hope that it's worth it for them.

(15:07):

And you know, I always say, you know, your job should be to force me. You should be so irreplaceable that I'm willing to give you that raise that I'm not even gonna ask or think twice. You need something. Yes, you need help with something. Absolutely. Is there some way that I can make your job here in this location easier? Yes, I'll do it. Right? And, and that's, that's what I want for them. And so I've gotta reciprocate and be the same way, right? I've gotta to care and be present and, you know, to worry about them. Like, I want them to worry about, you know, my, my business.

Daniel Blaser (15:39):

You were recently appointed to the Subway, FAF, national Advisory Board. Can you talk about what, what does that even mean? What does that entail and why are you excited about that opportunity?

Michael Rodriguez (15:51):

Yeah, I, I am actually incredibly excited about it. So it's a national advisory board made up of eight franchisees through throughout the United States. And the main point is to be a voice for the franchisee throughout the United States, right? And so corporate, the marketing team, anyone and everybody who you know, is, is high up there within Subway making these decisions are gonna ask for opinions, right? And, and what I liked is this is the first year that they actually went out and kind of recruited or, or wanted to appoint franchisees as opposed to some kind of a, like a self election process. And in that, you know, conversation, it was, we want constructive criticism. We want to know the truth. What do you really think? What do you really want? What does this make sense? And, and if it does, great, why?

(16:43):

And if it doesn't, why do you feel that way? And I, I think I'm excited to be in the room to really help drive where I think Subway's already has done a phenomenal job here in the last year, year and a half. I'm really excited to kind of build on that momentum and, and get an understanding of where we're going and really trying to help shape where we're gonna go and, and what we're gonna do with the momentum, the, the momentum that we have built. And, and so to just be a a part of that is, is really flattering and incredibly exciting for me. I I'm very, very excited actually. It's great.

Daniel Blaser (17:20):

The listeners of this podcast, they're all trying to kind of level up their hiring, their recruiting efforts, retention. We've talked a little bit about that. What advice would you give to the listeners of this podcast given that kind of shared objective?

Michael Rodriguez (17:34):

Having your managers and really your best people recruit ha, has been pre and post covid. It, it still remains the top resource I have. My best people, my managers, they've got the right attitude. They've got the right work ethic, and so they're looking for people that look like them. They want hard workers, they want friendly people. You know, I've, I've had great employees come out of the line as customers, right? And then they're talking and they're conversational, and oh, they like Subway and, you know, would you consider maybe working here for us? And, and they turn out to be spectacular, right? And if your best people are referring people they know, it also comes down to their name and they're not going to refer anyone to me that you know, wouldn't last a day or a month or whatever it is, right?

(18:28):

And so I would encourage your best people to really get active in making their lives easier, right? Because what else they're doing is they're, the success that they find in recruitment helps them. So the better people that they get you know, the, the more trusted kind of networks that they, that they look to and that they have personally and professionally the better the quality's gonna be and the easier their lives are gonna be. So, so I really encourage them to do that. I will say, do not hire out of desperation. I think I touched on that when it comes to the acquisitions, hiring out of desperation just creates a cycle of turnover that just exacerbates the few employees that are good, right? I mean, they are training someone every single day who leaves after four days, and then they start over.

(19:25):

Do not hire out of desperation. Really hold your teams, your hiring managers, yourself accountable to hiring quality candidates who you would hire if you didn't need to. You've gotta re reward reward your loyal staff. If, if people are doing a great job, if they're on time, their effort is outstanding, they're always in a good mood, you've gotta reward them, right? You can't just say, oh, I'm glad that person's here. You've gotta say, I'm glad you're here and this is how I wanna reward you for being such a positive influence on my business. Right? You've got it. It can't just be good job. See you later. It really has to be, I appreciate you. I've, I've added that, that phrase to my vernacular here is, I appreciate you. I think it's important, whether it's my employees a vendor customers, right?

(20:19):

I appreciate you. You've, you need to do that. They need to feel that invest in your leadership. Always train leaders. I know a lot of times it's, it's tough to invest money in getting people the training and getting people to the leadership capacity when you don't necessarily have a place to go. But I can assure you, if you wanna go anywhere and you don't have the leadership, it, it's gonna be a tough road. And so, you know, I, I have hired and trained managers who have then sat in stores for three and four months while we wait for paperwork to go through on an acquisition. You know what? It's better than losing them and then looking for that person four months later, right? So don't, don't pinch pennies when it comes to leadership. You've really got to, and I don't mean you have to pay them crazy amounts of money.

(21:14):

I mean, you've got to be willing to invest even when you don't need them. Cut out the cancers on your team. Every restaurant, every business has an employee that no one wants to work with. But you know what? They work 45 hours a week and they always come, of course. And keeping them for what seems like a benefit, you know, and it saves a headache for everybody. It, it actually is going to crush you slowly from the inside. And so I, I believe I, I'm a firm believer, and, and that honestly, I think has been the toughest thing to teach my management is if we have a problematic employee, they've gotta go because, you know, everyone will work 10 more hours for the next three weeks, and then we're gonna hire someone that's gonna fit this company and this culture, and everyone's gonna be happy, as opposed to having a mass exodus because this one person has remained here and no one understands why.

(22:17):

And so I would encourage that too. You know, if your core team and management is happy if they're bought in your recruitment and your retention is easier and greater. And, and so again, I I just cannot emphasize enough the importance of business owners, CEOs, upper management to really reflect who you want your staff to be, regardless of what's going on. And, and if you do that, I think that you'll find nothing's gonna be perfect, but I I think you'll find that it's a bit easier. And, and some of these things can get figured out and wrinkled. These, these wrinkles can get ironed out. And you'll be all right.

Daniel Blaser (23:01):

Thank you so much, Michael. It's been great chatting with you.

Michael Rodriguez (23:04):

Yeah, absolutely. Anytime, Danielle, I appreciate it.

Daniel Blaser (23:12):

Thank you for listening to On the Clock. For more info, visit workstream.us/podcast. I've also included a link in the show notes to connect with Michael. Until next time, we're clocking out.