Mr. Goodcents' Great Idea: Hire a CEO Who Actually Knows the Business

When franchise companies need a new chief executive, most look to hire a "big gun" CEO -- someone from outside the company who's headed up another big franchise system, but doesn't know squat about their chain. Instead, De Soto, Kan., based Mr. Goodcents Subs & Pasta smartly plucked the man who would replace founder Joe Bisogno from the last place most franchisors would think of looking for a leader: The ranks of franchise owners at the growing company's 99 stores. As it happens, Mr. Goodcents got a double-bonus with its pick, David Goebel. He's been a Goodcents franchisee since fall 2008, and now operates five stores. But he also served as CEO of Applebee's International for nearly a year, while the company was being spruced up and sold in 2007 to IHOP Corp., now known as DineEquity (DIN). No doubt that brief experience heading another franchise company helped Goebel as well... but the fact that he'd run Goodcents stores was the clincher.

Here's another creative twist to the story of Geobel's selection -- Goebel says he plans to continue as a franchisee in addition to his new role as CEO at the parent company. While some franchisees with restaurants near his may feel at a bit of an unfair advantage with this unusual setup, the payoff in having a CEO with on-the-ground, current experience with the company's products and systems should be huge. Even if he gives up his stores in a year or two as the company grows, that he comes with that track record is invaluable.

Often, as the years wear on and a chain gets bigger, franchisors grow distant from the franchise owners who operate their stores. Corporate executives forget that they will only thrive if they make franchisees successful. New products are developed in a vacuum and flop, fees and royalties rise, or edicts to sell products at unprofitable prices come down. In the worst cases, an us-versus-them mentality develops and lawsuits fly, as with the long-running Quiznos franchisee class-action lawsuit saga which is now finally nearing a very expensive end.

It's unlikely Mr. Goodcents will be making the type of major mistakes that landed Quiznos in court with a franchise owner at the helm of the parent company. Goebel makes an approachable CEO for other franchisees because they'll know he's walked in their shoes and understands their problems.

Photo via Flickr user Nick Bastian