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McDonald's Next Gen Transition - Tips from the Heriaud Family

Posted by Concannon Miller on Thu, Jun 2, 2016

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BLOG_-_Next_Gen_Tips_-_5-2016.jpgTiming is everything  such was the case with Lee and Travis Heriaud*, McDonald’s father-and-son Owner/Operators located in the Phoenix, Arizona area.

Although he was the son of an Owner/Operator, Travis had to complete the rigorous approval process set out by McDonald’s to become an approved franchisee while gleaning the insight that taking over your parents' business is different from working for traditional restaurant groups or starting your own organization from scratch.

Travis was drawn to the restaurant industry dating back to his childhood when he “rode the stores” with his Dad and seeing the pride Lee had in his restaurant business. At age 14, he began to work in the family restaurants while also teaching piano and guitar lessons.

During his college years at Creighton University while pursing his Bachelor’s degree in Marketing and after graduation, Travis went to work with several different full service restaurant concepts and found instant gratification in making the “food life” better for his clients. He also attended Le Cordon Bleu College of Culinary Arts in Scottsdale where he studied Hospitality Administration and Management.

Today, Travis is one of the Next Gen success stories of the Golden Arches. Not only does he run a strong organization but he also serves on several regional and national committees representing the franchisee community – most recently as the President of Opnad. 

McDonald's Next Gen Planning Guide Here are some great tips for building a family business from this successful father/son duo: 

For First Gens: (from Lee) 

  • Have a fluid plan for the family business. Lee has multiple children as well as a son-in-law interested in the family business. This requires making time for a lot of quality family communications and insuring the First Gen and Next Gen are all aligned around goals, roles, and responsibilities. 
  • Have a comprehensive buy–sell agreement that covers any and all future scenarios. Be sure all the parties are properly set up with life insurance, wills, powers-of attorneys, pre-nuptials and trust agreements as appropriate.
  • Create a vision for your family business and then convert this to a formal plan with expert consultants familiar with the McDonald’s system to include your accounting firm, your attorney, and the McDonald’s corporate team.
  • Be willing to turnover the reins to the Next Gen with a clear plan and a target date for each part of the transition. 

For Next Gens: (from Travis)

  • Lose your sense of entitlement. This business was built by your parents and you need to earn your way to ownership.
  • Communicate frequently and honestly through open conversations with family members about the business, your goals and vision; and understand theirs as well.
  • Do not allow yourself to be micro-managed by your parents. Earn the right to lead by showing your parents they can be confident in your skills.
  • Stay on top of managing your journey to ownership – changes in the McDonald’s leadership organization can delay or detour your path. Keep good records and monitor your own progress.
  • Check your ego at the door: Your parents are the Chairman/CEO of the organization – ultimately big decisions may lie in their hands, but don’t be afraid to add input and share ideas as a valued member of the Family Board of Directors.
  • Find Balance – regional and national committees are great experiences, but you still need to keep your eye on running the family business.

 

While not clients of Concannon Miller, the Heriauds have great tips on Next Gen transitions.

Topics: McDonald's management

Concannon Miller’s unique, holistic and intimate approach to financial health sets us apart from smaller CPA firms with more limited resources as well as mega firms where mid-sized clients struggle for attention. Contact us here to talk about improving your business.

This communication is designed to provide accurate and authoritative information in regard to the subject matter covered at the time it was published. However, the general information herein is not intended to be nor should it be treated as tax, legal, or accounting advice. Additional issues could exist that would affect the tax treatment of a specific transaction and, therefore, taxpayers should seek advice from an independent tax advisor based on their particular circumstances before acting on any information presented. This information is not intended to be nor can it be used by any taxpayer for the purposes of avoiding tax penalties.

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