This is an interview with Mike O’Toole, Chief Growth Officer at Goodcents Deli Fresh Subs.
Tom Scarda: Today, we’re going to be talking with Mike O’Toole, who has 27 years of restaurant experience. So I’m going to learn a couple of things here myself. Mike is with Goodcents now for 15 years, been in the industry for 27 years. And he’s and father and he has four kids. Three boys. So we’ve got to sell a lot of franchises for Goodcents so Mike can feed those boys. And we have to also help out his little girl who’s only eight months old. So how exciting is that? Mike is very into sports and Kansas City Chiefs may be a possibility since Mike was born and raised out there. And he loves to sing and play guitar, which is something that I try to do, but I’m tone deaf. So I’ll never make the American Idol finals. So hey, Mike, are you there?
Mike O’Toole: I’m here. Good, glad to be here, Tom. I’ve had a chance to look into the stuff that you’re doing and man, I’m real impressed. Lots of education and it’s been nice reading up on your stuff. So it’s a pleasure to be here with you this morning.
Tom Scarda: Yeah, thank you so much. This is really an honor for me, somebody who’s been in the industry for so long is just so cool to me. So if you are located in the Midwest, especially around Kansas City, you might know Goodcents Deli Fresh Subs. They been around for 30 years, but really just in that Midwest area. And now they have a mega plan to expand nationwide. So it’s a really cool opportunity with a lot of open space for people to expand and build their dreams through a really, really great franchise. So Mike, how did you get involved with Goodcents?
Mike O’Toole: Well, I’ve been in the restaurant biz for a while and was pretty successful making other people money. So I decided I wanted to venture out and start my own business. I found that franchising was the perfect spot for me and I actually opened my own Goodcents out in Arizona, of all places, but just kind of born and raised here in Kansas City, but ended up on the west coast for a little while and got married and wanted to do something on my own. So I got into Goodcents as a franchisee. That’s how it all started for me.
Tom Scarda: Oh, wow. That’s awesome. You’ve been in the shoes. You’ve walked the walk.
Mike O’Toole: Oh yeah.
Tom Scarda: And that’s really, really important in my book. As you’re looking at franchises, you want leaders in the franchise that have been franchise owners, that have been in your shoes. There’s no better way to say it. It’s so important in my opinion.
Mike O’Toole: Yeah, for the franchisee-franchisor relationship is the most important in our business and I think that, gosh, if anybody knows what our franchisees are walking through, I’ve walked through it. I can guarantee that to all of our franchisees. So it gives me a unique perspective, for sure. And then as I lead our teams, it helps them understand, through my leadership, what our franchisees walk through every single day. So it’s definitely been a positive for me, having both the franchisee and the franchisor perspective.
Tom Scarda: Yeah. Amen to that. There’s nothing better, in my opinion, especially in the executive ranks. So Goodcents has been around for 30 years. What could possibly be new? What are you excited about right now?
Mike O’Toole: You know, there’s tradition and there’s tried and true things, you know? Goodcents has been around for 30 years. We do have new exciting things, but the thing that grounds us, the thing that is our foundation is just what differentiates us from our competition and that’s our unique, fresh baked, soft bread, every single day in the restaurants. And then we slice all of our meats fresh for the guest, just like at a deli. But you know, our bread is a soft bread. It’s unique. It’s not a hard French loaf bread. It’s not a typical Italian sub roll. It’s kind of a soft sub roll that is actually pretty addictive. So our raving fans, they can’t get enough of it. You start talking about our soft bread and that’s the buzz around our franchise for sure. But the new things are, I mean, we’ve gotten into this pre-made meal business. We call it Centsable Kitchen and it’s pre-packaged, pre-made meals. We make them fresh every day onsite. But these are the meals that the guest can come and buy four or five of them, put them in the refrigerators at work or at home and heat and eat just as you need them. So they’re perfect gap fillers.
Mike O’Toole: We have menu items like meatloaf and Alaskan salmon and different items, but this new extension into our brand has really provided a great profit model for the franchisees because the bills are already paid through the sandwich business. So you’ve added this new incremental business in the To Go space that’s really added onto the bottom line for these franchisees.
Tom Scarda: And that’s, I think, a big trend where grocery stores or supermarkets are doing a little bit of that because they realize that our culture, we’re so busy, you don’t have time to cook. So the fact that you guys, as a deli, are tapping into that is brilliant in my book.
Mike O’Toole: Well, we get a lot of credit for fresh food, made fresh every day, and our executive team and our chef, our R and D team, they’ve done an incredible job with these products that we can make some pretty creative, inventive menu items through this To Go space. Because, you know, people come in for our sandwiches, but these are kind of like those gap meals, or this is for dinner. Like a lot of our slicers, they love to ask the question, after they say “Hey, I’ll take my penny club on that soft white bread,” they’ll say “Hey, what are you having for dinner?” And it kind of makes them go “What? What do you mean dinner?” And then we introduce them to our Centsable Kitchen meal lineup and guests walk out with two, three, four of these meals and they’re perfect gap meals. So we’re really excited about that new part of Goodcents is Centsable Kitchen.
Tom Scarda: Centsable Kitchen is just brilliant. I have no other word. I love it because I was in that Grab and Go space a couple of years back and I know exactly what you guys are doing and the potential that that has for the unit owner, the franchisee, is just unbelievable.
Mike O’Toole: Yeah. And you see a lot of people playing in that space right now. There are some competitors out there in that Grab and Go business to where some of them are thriving and some of them are struggling a little bit. But the key to it with our business is that it’s under the same square footage. It’s under the same rent structure. It’s under the same overhead. And you’re just adding on incremental sales. So that allows us to be successful with it and see if this trend turns into something that’s going to be a wave of the future, which obviously we think is absolutely going to happen.
Tom Scarda: Mike, how many units do you guys have open?
Mike O’Toole: We’ve got 73 units open right now and two of them are corporate owned. We want to make sure that we’ve got our feet on the ground and we’re living that every single day. In fact, I’m usually in our corporate restaurants personally two, three times a week. It’s real important that we stay close to the actual operations of our business.
Tom Scarda: And that’s great. I love when companies do that, but do it that way, have only two and not half of it. When the corporate stores accounts for half of the inventory, sometimes that is not a great thing for the franchisee. It’s not like when they have some test kitchens out there, like you guys have.
Mike O’Toole: Absolutely.
Tom Scarda: It just makes it … Because otherwise the big corporate guys will take the best real estate and everything in the market and the franchisees get whatever’s left over and we don’t want to be involved with a system like that. Don’t like that at all. What else is new and exciting at Goodcents?
Mike O’Toole: Well, the buzz is technology. And that’s actually what’s allowed us to step into this growth model is technology, both through our customer acquisition strategies and also through our support strategies. So we’ve got a state of the art training program. It’s an online, self-driven training program where the franchisees can give this online school, basically online college or education system, to their employees and we can take them step by step through our entire system, from crew level, right up front making the sandwiches, all the way through management or area management. So our Goodcents university is what we call it is technology-driven. And one of the most exciting things that we have with that technology is this text club. Our director of training and development, Blake Ballinger, he’s connected with this Millennial generation, this young generation that’s what I call the kids that grew up with Sponge Bob Square Pants. It’s just quick, fast information. This is how they consume information now. This is how they watch it and view it.
Mike O’Toole: So we have every single one of our procedures in a 30 second, Buzzfeed style video that kind of goes through the procedure very quickly and all they have to do is text a keyword to a text club. So if I’m standing in the restaurant and I’m like “Man, how do I make onions?” I just text “onion” to our text club and it provides immediately a 30 second Buzzfeed style video on how to make onions. It’s incredible what he’s done and we’re excited about it.
Tom Scarda: Yeah. I’m excited about it. That’s so awesome. And this is something that I’ve been kind of beating the drum about in the franchise industry is that the franchise companies, many of them, like you guys, are on the cutting edge of this technology, where local mom and pops, they just can’t even afford it, let alone figure it out.
Mike O’Toole: Yeah.
Tom Scarda: And the bigger franchises have these kind of cool things. Are you guys delving into delivery services, or does each store have their own delivery person?
Mike O’Toole: Well, we’ve delivered for 30 years. So since our opening, Goodcents has delivered our sandwiches and our pastas and now our Centsable Kitchen meals. But you can’t ignore the delivery service providers that are out there. So one way that we can stay nimble, we’re a small company, but we own and operate our own POS system. So our point of sale systems are all ours. So we can integrate and we can move quickly with these DSP providers. So we’ve integrated with some of the major delivery service providers to where those orders come in right through our register and it’s all seamless and whether our franchisees want to manage a delivery driver and all the liability that comes along with that in-house, or if they want to use a delivery service provider, we have that now available to where we can deliver consistently and consistently on time and has really increased our delivery range, our delivery capability and sales are increasing as well because now we deliver all the time. If it’s snowing outside, we don’t have to worry about our driver calling out sick. Or it’s too busy, we can use these delivery service providers as a supplement to our in-house delivery. So we are absolutely on the cutting edge of technology and also integrating with these bigger companies as they come along, we can move pretty quick.
Tom Scarda: That’s awesome. And I think that those services are probably going to do better than your typical just Uber driver. And of course it’s different in different parts of the country. If you’re going to be near a college, as an example, you’ll probably do a lot better than being in a rural area, if you’re one of those drivers. But I think that if you have a restaurant, you can’t not do that. I mean, I’ve been just hearing crazy numbers coming out of some of the bigger restaurants you might know, like McDonald’s what they’re putting in their incremental revenue is just … My head is spinning when I’m hearing these numbers. And it reminds me of 20 or 30 years ago when drive-throughs became the really big thing and I know here locally, where I live, the local McDonald’s, the owner knocked down the building and moved it 20 feet so he could put in a drive-in because it will add 30 percent to their revenue stream.
Mike O’Toole: Yeah, we’re … We always want to be on the cutting edge of technology, we always want to be on the cusp of these things and because we are who we are, we can move quickly. And one thing we’re on the verge of doing is being able to, when we have a delivery, we can actually go out and ping all these different delivery service providers, we’ll find the closest one and the least expensive one for the franchisee and that’s the order that will come through. So I mean, our IT teams are just … They blow me away every single day. And once you can do that, because the future is convenience. The guests nowadays wants it fast, they want it quick and they don’t want to be burdened with technicalities and logistics and all those things. And online ordering, we are probably twice as much as industry average on our online ordering presence and our percent of sales in online ordering.
Mike O’Toole: Our marketing team, you know, I talked about training and that part of technology and how we engage with our team members and how we operate our business is in support our franchisees, but our customer acquisition strategies and our digital media team blow me away every day. In fact, we just made an endorsement deal with Patrick Mahomes of the Kansas City Chiefs and he’s … I don’t know, when you run through Google and you say who’s more popular now, he’s running up there with popularity nationally with the likes of Tom Brady and Peyton Manning. And we’ve actually … He’s ours. We’ve got him on commercials that just actually launched yesterday and I’m looking down at my phone as we’re talking here because my phone’s just blowing up. We’ve had over 100,000 views of our commercial in the last 24 hours.
Tom Scarda: No way.
Mike O’Toole: And that’s just a testament of our digital team and how that’s how we can market to customers. The old school of getting on network television and spending a ton of money and just throwing the net. We can pinpoint our marketing strategies and the results that these guys are getting just blow me away every single day. Digital media is at the forefront of franchise marketing right now.
Tom Scarda: Amazing. And I know I call it … As opposed to TV broadcasting, I call it narrow casting. I don’t know if I coined the phrase. I doubt it. I’m sure I read it somewhere. But it’s narrow casting. You’re going right to the people that want to hear from you and it’s much less expensive to do it that way. The world is changing minute by minute, right in front of our eyes, and of course everybody talks about that these days, but it’s absolutely amazing. It reminds me … You’re talking about the technology and the text club that you have for your Millennial employees, it just reminds me quickly that over the holidays, my kids were over. Now my kids are a little bit older than yours. My kids are 28 and 24. And my daughter wanted to show a video to my … My son wanted to show a video to my daughter, so he takes out his phone and he’s like “Oh, you’ve got to check this out. Some guy at Buzzfeed, silly thing.” And she looks … She holds the phone and she says “This video is a minute. I don’t have time for that.” And she was serious. I was like “Oh my God.” I’m the other room saying-
Mike O’Toole: You know, it’s interesting you bring that up. My marketing team, they … I’m an operations guy and there’s some famous person once said that you hire smart people to tell you what to do, not so you can tell smart people what to do. And man, I’ve got some smart people on our marketing team. And there’s this long form video and there’s short form and there’s different ways to use those things. And it could be kind of creepy, but if people watch that long form, if they get to a certain level of time watching that video, now you can actually re-target those people because they’re a little bit more involved. And the digital marketing thing just kind of blows me away with those long and short videos and what they can do nowadays.
Tom Scarda: I agree. And I do a lot of video and I have a lot of stuff on YouTube and it’s all about training to buy a franchise, for the most part. A lot of inspiration too. I’m very into that, motivation, inspiration. So I know exactly what you’re saying. I’ve been trying to teach myself all this stuff over the years and it’s proved to be successful for me. A lot of people will call me up out of the blue or email me and say “Hey, I saw your video and I have a question for you. I want to pick your brain.” And that’s what I want to do, is help people and let them pick my brain since I’ve been in businesses that were successful. I’ve also been in a business that failed. And the failure is what made me a franchise expert.
Mike O’Toole: Isn’t that what happens usually? Life is not perfect and, man, if you can learn from mistakes, it’s almost the people that have the more mistakes are the ones that ended up smarter and ended up more successful because you got to go through that stuff.
Tom Scarda: It’s so true. It’s the school of hard knocks is definitely the best school, and it’s not always the cheapest school. My mistake cost me about four Harvard education degrees, but that’s a whole other story. Talking about that, do you have a story that you would share about your worst entrepreneurial moment? [inaudible 00:21:14].
Mike O’Toole: Well, I was a self-employed entrepreneur during our great recession that they called it. It’s funny, is when we look back at the things that we learn or the experiences that we have, I would say probably the one that sticks out in my head, it was probably 2008, 2009, and I feel like I’m a guy of very high standards. I’m a guy that you can’t clock in until your uniform is crisp and perfect. And I kind of create that culture and cleanliness is a huge deal, perception is reality. I remember back in the day when I learned that perception was reality, it was like my aha moment of wow, this is real. It’s not two minutes of service. It’s does it look like it was two minutes. That’s more important in the service industry. It’s your attitude and how you carry yourself. But I count myself as somebody that has high standards.
Mike O’Toole: And I looked up one day and I remember, I was washing my hands. My wife’s a dietitian, so of course in my restaurants we had foot pedestal hand sinks so you didn’t have to touch handles, but I looked down and I’m looking at my feet and there’s this … People that are in the restaurant industry know what I’m talking about, but there’s this mop line to where if you’re just mopping the floor normal, you’re just going to … If you don’t care if it’s cleaned, you just kind of make this line and then the more and more you do it, it’s almost a black and white line between where if you were really going above and beyond, that was clean back there in the corners, but if you were just kind of mopping to mop, it kind of makes this line. I looked down. I was like “Oh my gosh. What happened? I have gotten lazy. I’ve gotten complacent.” And it woke me up and I found myself almost feeling sorry for myself, you know? Like sales were down and you keep doing the same thing and man, it really invigorated me and it was my … I felt like it was my worst moment because I looked down, I looked around, I realized that I had let circumstances kind of get me lazy.
Mike O’Toole: And in that moment, I said “I’ve got to pick myself up. I’ve got to … It’s not all going to happen for me. I’ve got serious responsibilities for my own business.” And sometimes in the franchise world, you kind of … When things don’t go 100 percent your way, you kind of look back at the franchise and go “Hey, what are you doing for me?” But man, the thing that I learned was I’ve got to bring it. I’ve got to bring it every single day and I’m responsible for my business. And that was kind of my worst moment. It’s not horrible, it’s not dramatic. But it was just the little things, you know? Just the little things.
Tom Scarda: You know, nobody ever stubbed their toe on a mountain.
Mike O’Toole: Yep. I’ve heard it say also “Nobody’s ever fallen to the top of a mountain.”
Tom Scarda: That’s right. That is so true, so true.
Mike O’Toole: Yep.
Tom Scarda: So I wanted to also ask on that same kind of line of thinking, is there like a moment that you’ve had that you could point to for your success?
Mike O’Toole: Yeah, it was when I first started in my career managing restaurants, and I kind of alluded to it earlier, it was that aha moment of realizing that perception is reality. It’s kind of hard to explain, but I realized one day that the environment that I put people in, it dictates their behavior. And one of … I used to call it immaculate culture, because I’m kind of a dramatic guy. So I call it immaculate culture. Who has ever been immaculate before? It’s kind of a word that you would here in the Bible or something. But immaculate culture, and I kind of wrote this article and it got published, but it was about creating an environment to where when people come in, they’re compelled to do something.
Mike O’Toole: I give an example of if you went over to a friend’s house and they had this kind of big, nice grand house and you walked in the front door and the carpet was white and the place was so clean that you couldn’t get over it and sparkling and you look down at your feet in the entryway of this house and there’s a line of shoes on the floor. What would you feel compelled to do? Without any prompting, you feel like taking your shoes off. That’s what you would have to do to enter this house. There’s no sign there that says “Hey, take off your shoes at the door.” There’s no somebody standing there to make sure you do it. It was just the environment.
Mike O’Toole: So I found that in the restaurant business, if you create that environment to where it’s almost like it’s an immaculate culture, I said it earlier, with you can’t clock in until your uniform’s on, some people think that’s just so hard. You don’t know the people that I have here. These people are a little rough and tumble. I can’t get them to do this. But it’s true. If you create an environment that is dirty and messy and unorganized, that’s how your people will behave. But if you create an environment that is clean and neat and organized, that’s how your people will behave. And when I realized that when I was a manager, that propelled my success in the industry. And I look back on the day when I was with KFC and I did that with five or six Kentucky Fried Chicken restaurants. I took kind of a greasy armpit kind of a restaurant, and I’m not saying that’s what KFC is nowadays, but it can get that way with fried chicken, and I turned it into an immaculate culture and turnover just dwindled almost down to nothing. I mean, I couldn’t get rid of people and people showed up to the door because exceptional people want to work for exceptional people. Once that clicked in my head, that was my catalyst to success, was perception is reality and culture drives behavior. So that’s it.
Tom Scarda: It comes from the top down. Those are some nuggets there, man. That’s something that we should highlight when I post this podcast, for sure. I will be doing that. That is so awesome. What’s one myth about either your business or franchising in general that you would like to bust?
Mike O’Toole: You know, it probably goes back to what I was saying earlier. It even ties into that moment where I realized that “Wow, what am I doing? What am I doing?” This myth of the franchise is going to do it all for you. And I would love to sit here and say, as the leader of a franchise, “Hey, we’re going to give you this and we’re going to make you successful.” But man, if you don’t bring the will and the heart and operate your business with ownership and with high standards and you execute, it’s not going to work. No business will work, no matter how good the franchise is, no matter how good the name is. If you don’t execute at the store level, it’s not going to work. So I think that a big myth is that “Well, I can go open Mike’s Subs and Pastas and do it myself. Or I can go to a franchise and it’s all going to be done for me.” True. We’ve got some systems in place that will help you become successful, but unless you execute it and unless you do it with a passion and you bring your will and your heart, it’s not going to work.
Mike O’Toole: And I think that that’s the big myth, that when I sit in front of a franchisee, a prospective franchisee and they’re about ready to sign up, I want to make sure that I say “We’re going to provide you the education that will help you become successful, but it’s business. It’s not easy. It takes hard work. It takes dedication.” And I maybe even should not say those kind of things, because I probably scare some people off, but it’s just the truth. It’s hard work, it’s your business. Take pride in it and we’re going to help you, absolutely, but execution is key.
Tom Scarda: Yeah, I totally agree, and I think if you listen to any of my podcasts or videos, you would hear me say that if you’re the kind of person that joins a gym and thinks that you’re going to get in shape just because you joined the gym, you shouldn’t buy a franchise. Because just because you buy a franchise does not mean you’re going to be successful or make money. You have to actually show up and work the equipment.
Mike O’Toole: Yeah. Absolutely.
Tom Scarda: I think the analogy works really well. Is there any books or resources that you would recommend to listeners, people that are out there and thinking about franchising or maybe you are a franchisee-
Mike O’Toole: I read a lot of books. I’m a Christian. I read a lot of Christian style books. One book that I’m reading right now is God is My CEO, but it’s just … I just like to kind of ground myself in that. And usually at the heart of that kind of education, as I read through books, is just the people part of it, is making a connection with people. Business is all about people and if you don’t have people around, you don’t invest into them and take the time to talk with them, that’s … You’re just going to lose. So I kind of read those books. But I think the biggest book that’s made the biggest impact on me is The Tipping Point, Malcolm Gladwell. We’re always looking for the thing that’s going to tip any business at the tipping point. What’s going to push us over the edge? And one of the things he talks about is something that I hold near and dear to my heart, which is he talks about the broken windows theory, which is similar to this immaculate culture that I talk about, is the culture drives behavior. I just love that book because it really spells a lot of things out. So that’s one of my favorite books.
Tom Scarda: I agree. I love all of Malcolm’s stuff and I often go and watch his … He has videos out there and all sorts of stuff. Yeah, just a really great guy. Love that. And I’ll add on that I like to read, but I’m not a great reader, so I’ll listen to audio books, but I also just found an app for the phone. It’s called Blinkist and what Blinkist does is it takes like every great book out there and … You know, there’s the 80/20 rule. So 20 percent of the book really matters, 80 percent of it a lot of the time it’s fluff. So what they do is they take a book in like a 10 minute audio recording they give you the 20 percent of what matters. I love it, just love it. It’s great. It’s our culture of more ADD stuff.
Mike O’Toole: Craig Groeschel got a leadership podcast that he does. He does some fun things and he says that he always reads the first two lines of every paragraph when he goes through a book because they’re probably going to say what they want to say in the first couple of lines of the paragraph and then he moves on and gets through books that way. I’m kind of with you, though. I’m not the reader type, but I understand the value and the importance of keeping your mind sharp and reading daily. So I’m with you though. I listen to a lot of books. Yeah.
Tom Scarda: That’s a good way to do it. If you’re commuting, there’s a lot of ways to do it. Just on the treadmill or if you’re running, whatever you’re doing, you could listen to that or you could just listen to the podcast.
Tom Scarda: So Mike, I want to end with a parting piece of guidance and also the best way people could get in touch with you and Goodcents as well. Anything you could share?
Mike O’Toole: Yeah, I would just say that I understand that there’s a lot of people listening to this podcast that are contemplating thinking of getting into the franchise business. I just think that there’s a lot of options out there. There’s just … There’s lots of them and what you want to dig into is what differentiates you from the other because there’s a lot of sandwiches out there. There’s almost a sandwich on every street corner and what it comes down to is quality. And I know you said at the top of the podcast about loving the food. I think you’ve got to love the food, but you also got to love the support and the tools that you’ll get from a franchisee that will help you become successful. And I think that that’s … My biggest advice would be to dig into how they’re going to help you and the education that’s provided and the support that comes with that franchise. I think that it’s critical to success.
Mike O’Toole: I’ve been on both sides of it. So I know that when you don’t get the support, when you don’t get that education, that it makes it harder. So I’ve got a heart for it. I think that that’s the best guidance I can give, is really dig in. You’ve got to love the food, they got to have a product that the guest is going to choose over the other. But also this is your commitment for a good amount of years of your life and your life savings for a lot of people. So you want to make sure that the franchise is going to be around for a while and they’re going to support you in your success.
Tom Scarda: That’s right. Yup. Great advice and what’s the way people can find out more about Goodcents?
Mike O’Toole: I think Goodcentssubs.com is the best way. You can check out of new lineup of Centsable Kitchen meals there. There’s some bios on that page. Myself, Mike O’Toole, you can catch me at email@example.com, that’s my email address. M-O-T-O-O-L-E at Goodcents Subs dot com and I’d love to hear from anybody.
Tom Scarda: Yeah, that’s great. And don’t hesitate to reach out to Mike on that and you could also reach me at Tom@thefranchiseacademy.com. I’m going to put the links for Mike’s information and Goodcents at the bottom of the podcast on thefranchiseacademypodcasat.com. And Mike, thanks a million. Love having you on here. We’ll do it again. Have a great one. Bye bye.