How to Manage a Company in Down Times
Written by Patty Rasmussen Thursday, May 19 2011
Snapshot: Catherine Monson 
From an early age, Catherine Monson knew she wanted to run a company. That’s what she’s done for more than 30 years. She began her career in 1980, working first at Sir Speedy Printing & Marketing Services in a variety of upper-level management positions before moving to PIP Printing & Marketing Services in 1999 as the company’s president and COO.
She joined the printing and graphics giant FASTSIGNS as CEO in December 2008 and began working the following month, January 2009. FASTSIGNS, based in Dallas, Texas, has 530 locations worldwide. FASTSIGNS was recognized as a 2011 World-Class Franchise, presented by the Franchise Research Institute; results were based on a confidential survey of FASTSIGNS franchisees.
Womenetics: You’ve said that you wanted to run a company from an early age. Where do you think that desire or vision of your future came from?
Catherine Monson: Part of it is DNA. My mother was a very successful businesswoman. She was a natural born leader. When she walked in a room, people just followed. I believe my dad, and I don’t mean this in a negative way, always wanted a son for his first born. I always did the things a son does – hunting, fishing, and camping. I never, ever played with dolls, had no interest in learning to cook or sew, and always wanted to be in business. I wanted to be a leader. Business was something I found exciting, and I remain excited about it.
Womenetics: Have you found anything about being a woman that gives you an edge in business?
Monson: I started in a pretty male-dominated industry and had to fight hard to be respected, but I don’t regret any of that; it just makes you tougher and stronger. But I certainly think being a woman allows you to be a little more perceptive or intuitive about what customers and employees are feeling. I think it helps develop more nurturing relationships with employees as well as franchisees.
Franchising is unique in that your franchisees are both your customers and your business partners. A key component to success is positive franchisee/franchisor relationships. There is a side of being a woman that makes it easier to develop those kinds of personal friendships. For example, I’m a huge believer in personal, handwritten notes. Whenever I visit a franchisee at their location for the first time, I send a personal note afterward. I send birthday and anniversary cards. I’ve got over 500 franchisees. But my assistant has a huge database and creates the cards a month in advance so when I’m home, I’ll watch TV and write cards.
Womenetics: Having gone through so many different business cycles in the franchising industry, what do you think is the most important factor between franchisor and franchisee?
Monson: It’s critically important that a franchisor understand the franchisee’s unit level economics. How do they make money? Make sure you understand gross margin, all their expenses, and how they finance the business. Then consistently look for ways to improve their unit level economics, profitability, and cash flow. You do those things somewhat differently in growth cycles than in recessionary cycles, when you’re looking at ways to trim expenses. Part of what I love about franchising is the collaborative effort.
The Egg McMuffin was a franchisee’s idea, not a McDonald’s corporate idea. McDonald’s corporate saw itself as a lunch and dinner destination; it never thought of breakfast.
The Subway $5 footlong promotion was an idea from a Florida franchisee. Florida got hit by the recession first – and harder than just about any state. The franchisee was struggling to communicate a value proposition to penny-pinching consumers, and that was his idea.
Franchisees are on the front lines working with customers and prospects, and they’re going to come up with great ideas. In franchising you take the great ideas of the franchisees and the great ideas of the franchisors and you work together to perfect and refine them. That’s what makes a brand very strong.
Womenetics: You had to make some changes with FASTSIGNS during the recent recession.
Monson: That’s correct. I started with the company in January 2009. It was the first time the company had experienced same-store sales declines. It had been in a growth industry and market. They had experienced months of declines, after September 11, 2001, for example, but never had a year with negative growth. The last quarter of 2008 wiped out any growth for 2008, and they ended the year down a little over 2 percent.
In 2009 we ended the year down 17 percent. The franchisees had never had that kind of a shocking decline in sales. We spent a lot of time helping them trim expenses. If your franchisees have a 17-percent decline in revenue you can guarantee your corporate office is going to as well. I downsized our corporate office, which might seem counterintuitive because you have the same number of franchisees to support, but they pay us a flat percentage of their sales volume and if that’s down, we need to make changes to meet our requirements.
Womenetics: Were all tweaks made at the corporate level?
Monson: We have the blueprint for work flow process and the brand and how we market and advertise, but our best operators saw their sales decline and began asking, “Where can I cut expenses.”
Most didn’t, though, because they felt business would recover as quickly as it had in the past, but this was the deepest and longest recession since the Great Depression. It’s been a slow and lethargic recovery. There were some things we could do for them. We went to all our key vendors to negotiate prices for franchisees in order to lower their cost to goods sold. We looked for other areas of savings whether it was long distance or internet service and credit card processing.
We spent a lot of time reviewing their financial statements with our benchmark so we could counsel them on changes that they could make. We reached out to many of their landlords for rent reductions. Not all could do it, but we tried to make the case that their sales were down, you don’t want to lose a tenant, and try to keep them in business. We were successful for about 25 percent of our franchise partners to get reductions for a year to 18 months.
Womenetics: What philosophy do you use to lead in business?
Monson: I have a couple. The first is that success is a function of superb execution of the basic fundamentals. From a personal management style, I want to make a difference in someone’s life. I’m a huge fan of Zig Ziglar, and one of the things he always says is if you help other people be successful you’ll be successful.
Particularly in franchising, if we help franchisees become successful we will be successful, but I think also when it comes to your team members, when you help them achieve their goals and objectives, that helps the organization.
Womenetics: You were from California but moved to Texas for this job…
Monson: And I wasn’t looking for another job or to move to Texas. I was president of PIP Printing & Marketing Services, and because I’m visible in franchising – I’m on the board of directors of the International Franchise Association and speak at a lot of their conventions and seminars – I was fairly well known.
I got a call out of the blue from the chairman of the board of the firm that owned FASTSIGNS, and he said, “One of our founders is retiring, and we think you’d be perfect to run the company.” He told me where it was located, Dallas, and I laughed out loud. I told him there wasn’t a chance in hell I’d move to Dallas, but six months later I was in Dallas – the moral being never say “never.”
Womenetics: What drew you to job, especially at such a difficult time for the company?
Monson: Part of it comes from confidence. Good management has much more impact in down times than in good times; even average managers can succeed in good times. Part of it was the opportunity to lead an even bigger organization and have the opportunity to be CEO, which is very different from being president. It was the natural progression. While I was happy and satisfied where I was, once I started thinking about it and evaluated the opportunity it was an easy decision. I will admit that I just returned from a week’s vacation in southern California where I made sure I saw the ocean – breakfast, lunch, and dinner – every day.
Womenetics: Other than writing handwritten notes to franchisees, what do you do in your off time?
Monson: One of my passions is horseback riding though I’m without a horse now, and I’m not sure I’ll get one in Dallas because the summers are so hot, nor do I have time. I love international travel and travel for vacations, and I love hosting dinner parties.
I bought a big, beautiful home that’s made for entertaining. The kismet is that I bought my home from Zig Ziglar. After being a fan of his and reading just about every book he’s ever written, it turns out I bought his house, and he’s been here for dinner a couple times. I love running. I find if I can get outside and run three to five miles that is the ultimate release of a day’s stress. No matter how stressed I am, if I can just get in a nice run it’s like the world is a different place afterward.
Patty Rasmussen is an Atlanta-based freelance writer. She spent 12 years covering the Atlanta Braves for ChopTalk Magazine and has written for Major League Baseball publications, Georgia Trend magazine, WebMD, and Blue Ridge Country.
